The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), confirmed the customs duty exemption and reiterated that there can be no recovery by Customs authorities when amount claimed is not duty.
The appeal was preferred by the Revenue to assail the order passed by the Commissioner of Customs (Appeals), whereby the refund to the respondent, M/s Telecare Network (India) Pvt Ltd, was sanctioned. The respondent is a Private Limited Company which imports and sells mobile phones in India.
The additional duty of customs is levied at rates applicable to similar goods manufactured in India as per the Central Excise Tariff. If there is any exemption notification under the central excise such notification also applies to the additional duty of customs.
Notification No. 12/2012-CE dated 17.03.2012 as amended exempts mobile sets from excise duty in excess of 1% ad valorem subject to the condition that no Cenvat credit was availed on the inputs used in the manufacture of such goods. The respondent’s claim of the exemption notification was denied by the appellant on the ground that the exemption notification will not apply to imported goods.
The Counsel for the Revenue submitted that the application was filed beyond the period of one year and, therefore, was time-barred and should not have been sanctioned and that the Commissioner (Appeals) erred in holding that the refund claim does not attract the condition of unjust enrichment as the refund claimed is not duty as the importer themselves had filed application under Section 27 indicating the amount paid as duty.
The counsel for the respondent submits that the impugned order is correct and proper and calls for no interference at all. The Delhi High Court in Mafatlal Industries Limited has held that the amount claimed was not duty and should not have been recovered by the Customs authorities in the first instance, therefore, the Revenue cannot resist a legitimate refund claim.
The Coram consisting of PV Subba Rao, Technical Member and Binu Tamta, Judicial Member observed that “The issue was already decided by the High Court and the Assistant Commissioner and Commissioner (Appeals) were bound to have followed the order of the High Court as they did. “
Confirming the customs duty exemption the Tribunal said, “We are surprised as to how Revenue has filed this appeal faulting Commissioner (Appeals) and Assistant Commissioner for following judicial discipline and obeying the orders of the Delhi High Court and asserting that they should have defied the Delhi High Court’s order”.
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