Revenue Dept Estopped from Re-opening Issue After Finality Attained: CESTAT Dismisses Customs Appeal against Export Duty Refund [Read Order]

In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad, has dismissed an appeal filed by the Revenue, holding that the Department is estopped from re-opening an issue that has attained finality up to the Supreme Court and has been implemented.

The case involved M/s Vibhuthigadda Mines Pvt Ltd., which exported iron ore fines and paid export duty. The Department sought to enhance the declared value of the goods, leading the respondent to pay differential duty under protest and file a refund claim.

The adjudicating authority rejected the claim, but the Commissioner (Appeals) allowed it. The Department challenged this before CESTAT and subsequently the Supreme Court (in Commissioner vs Muneer Enterprises), but both appeals were dismissed. Following the Supreme Court's dismissal, the Assistant Commissioner reassessed the shipping bill and sanctioned the refund of excess duty but did not grant interest. The Commissioner (Appeals) later directed the payment of interest.

The Revenue filed the present appeal, challenging the order directing the payment of interest and confirming the refund entitlement.

Counsel for the Respondent argued that the Department had already accepted the adjudication order for re-assessment and refunded the excess duty. Consequently, the order had attained finality.

They contended that once an order is not appealed against or is implemented, the Department cannot take a contrary stand and re-open the same issue. Reliance was placed on Marsons Fan Industries vs CCE and Nokia India Sales Pvt Ltd.

On the other hand, the Department sought to challenge the order on the grounds of the valuation and the applicability of the refund.

The bench of Mr. A.K. Jyotishi (Technical) and Mr. Angad Prasad (Judicial) observed that the dismissal of the Civil Appeal by the Supreme Court leads to the finality of the issues. The Tribunal noted that after the Supreme Court's dismissal, a reassessment was carried out, the refund was sanctioned, and the interest was granted, and both orders were accepted and implemented by the Department.

The Tribunal observed:

“The dismissal of Civil Appeal by Hon’ble Supreme Court leads finality of issues. Thereafter, reassessment was carried out, the refund was sanctioned. Interest was also granted and both the orders were accepted and implemented by the Department.”

Relying on the Supreme Court’s decision in Priya Blue Industries Ltd. vs Commissioner, the Tribunal held that once an assessment order attains finality, refund proceedings cannot be used as a means to reopen or question it. It reiterated the principle that the Revenue cannot approbate and reprobate. The Tribunal also noted that documents supported the transaction value and there was no allegation of extra consideration or suppression.

In view of this, the CESTAT held that the Department was estopped from taking a contrary stand. As the Department sought to challenge an order that was already adjudicated, final, and implemented, the appeal was dismissed as devoid of merit.

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