Rejection of refund claim for importing Anhydrous Ammonia of Malaysian origin as the certificate is not as per format under exemption notification not justified: CESTAT [Read Order]

The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CSTAT) held that the rejection of refund claim for importing Anhydrous Ammonia of Malaysian Origin just because the certificate was not according to the format prescribed in the exemption notification was not justifiable and allowed the appeal by Paradeep Phosphates Limited (The Appellant) against The Commissioner of Central Excise, Customs & Service Tax (The Respondent).

The appellant imported Anhydrous Ammonia and filed a refund claim application as that the import of Anhydrous Ammonia of Malaysian Origin is liable to a preferential rate of Basic Customs Duty @ 2% under Notification No.53/2011-Cus as amended, whereas they have paid duty @ 5% on such goods, which was refundable but show-cause notices were issued to the appellant on the ground that the Bills of Entry have been finally assessed in the EDI System the appellant has not challenged the assessment of duty done through RMS in EDI and paid duty so assessed through TR-6 Challan and the appellant had not challenged the assessment order, the claim for refund of duty would not be admissible as held by the decision of the Apex Court in the case of Priya Blue Industries Limited Vs. Commissioner of Customs (2004).

While adjudicating the show cause notice, the adjudicating authority held that the certificate submitted by the appellant, was issued by the manufacturer of the goods in question and the appellant was required to submit the certificate of origin issued by the Issuing Authority designed by the Government of Malaysia as per the format as set out in Annexure IV to the Customs Tariff (Determination of Origin of Goods under preferential Trade Agreement between the Government of Republic of India and Malysia) Rules, 2011. Therefore, the refund claims are not maintainable. This was challenged before the Commissioner (Appeals), but the orders of the adjudicating authority rejecting refund claims were confirmed.

The counsel who appeared on behalf of the appellant submitted that they had produced the Certificate of Origin issued by the manufacturer of the goods but the Department did not challenge the Certificate and the appellant had complied with the substantial condition of the Notification. Therefore, the benefit of the same cannot be denied. The counsel also submitted that after producing the Certificate of Origin, the clearance was allowed and the benefit of the exemption Notification was granted, therefore the notification should be granted and the refund should be allowed.

The counsel further submitted that the Bills of Entry were to be filed physically, but during the impugned period, the appellant filed the Bill of Entry under the EDI System and approval for assessment of Bills of Entry was granted under the Risk Management System. Therefore, the decision of Priya Blue Industries Ltd is not applicable in the present case, to support this the counsel relied on the decision Delhi High Court in the case of Micromax Informatics Limited Vs. Union of India (2016)

The counsel who appeared on behalf of the revenue supported the impugned orders and submitted that the appellant had not produced the Certificate of Country of Origin issued by the Malysia Chamber of Commerce so the condition in the notification was satisfied. The counsel further submitted that as per the decision of the Supreme Court in the case of ITC Limited Vs. Commissioner of Central Excise, Kolkata-IV (2019), or challenging the adjudication order for the assessment of the Bill of Entry, the refund claim cannot be entertained.

The two-member bench consisting of Ashok Jindal (Judicial Member) and Rajeev Tandon (Technical Member) after hearing both sides held that “In view of the circumstances, the benefit of Notification No.53/2011-Cus dated 01.07.2011, cannot be denied to the appellant as the appellant has complied the subsequent condition of the Notification” and the appeal was allowed.

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