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Judgment
Sanjib Banerjee, J.—The Court : The stand taken on behalf of the customs authorities is inexplicable and completely without basis.
The petitioner imported spinal needles for medical use. The assessed bill of entry permitted exemption of the additional duty (equivalent to sales tax) under Notification No. 21/2012 as would be evident from the bill of entry for home consumption. However, though the petitioner claimed the benefit under Notification No. 12/2012 pertaining to the countervailing duty, the concerned Assistant Commissioner at the initial stage declined to allow the exemption under Notification No. 12/2012. The petitioner paid all the charges and duties as demanded for the release of the goods before preferring an appeal. In the relevant appeal under Section 128 of the Customs Act, 1962, the reliefs claimed were as follows :
"a. The assessment made by the Assistant Commissioner of Customs in respect of Bill of Entry No. 4965515, dated 21st March, 2014 be set aside.
b. Exemption claimed by the appellant on the imported goods be allowed under Notification No. 12/2012 Sl. No. 309(I).
c. Enhanced duty of Rs. 9,01,878/- on account of denial of exemption be set aside and said amount be paid by the appellant under protest be refunded along with interest."
The appellate order of August 5, 2014 discussed the matter and noticed that before final assessment, the assessing authority had certain queries which were responded to by the assessee by claiming, inter alia, the benefit under Notification No. 12/2012 [serial no. 309(i)]. Since the appeal pertained to the refund of the sum of Rs. 9,01,878/-, which was the aggregate of all the duty obtained in derogation of Notification No. 12/2012, the appellate authority discussed only such aspect of the matter and noted, inter alia, as follows :
"The assessing authority assessed the bill of entry no.4965515 dated 21-3-2014 rejecting the benefit under Notification No. 12/2012 C.Ex., dated 17-3-2012 without passing a speaking order resulting excess duty of Rs. 9,01,878/- had to pay by the appellant (sic.). Hence, this appeal."
After referring to the submission made on behalf of the assessee in course of the appeal, the appellate authority found that the only issue before him was as follows :
"The issue that is to be decided in this appeal is whether the Exemption Notification No. 12/2012, dated 17-3-2012 to be extendable to the impugned imported goods or not."
(Paragraph 6)
The adjudication in the appeal followed thereafter with the observation that the spinal needle that had been imported by the assessee was a part of the spinal fluid manometer and "neither an accessory nor a complete instrument." It was also held that there was no ambiguity regarding the classification of the goods and, "so the exemption benefit under Notification No. 12/2012 [serial no. 309(i)] should be granted."
In the final paragraph before the ordering portion of the appellate order, it was held that in the absence of any cogent grounds for denial of the benefit claimed under Notification No. 12 of 2012, the order of assessment was not sustainable in such regard. However, the following order was passed by the appellate authority on August 5, 2014 :
"The assessment order under bill of entry 4965515, dated 21-3-2014 is set aside and the appeal is allowed with consequential relief to the appellant."
Since the scope of the appeal was the denial of the benefit of exemption under Notification No. 12 of 2012 dated March 17, 2012, the appellate order does not reveal any discussion beyond such aspect of the assessed bill of entry. In such circumstances, the real purport of the appellate order is that the demand for duty made in derogation of Notification No. 12 of 2012 was incorrect. To give effect to such appellate order, the consequential relief that the petitioner was entitled to was the refund of the duty obtained from the petitioner by not giving the petitioner the benefit under the relevant notification. There may not be any serious dispute that the principal amount liable to be refunded ought to be Rs. 9,01,878/-, but given the quality of the submission made on behalf of the Customs, nothing should be taken for granted.
The immediate grievance of the petitioner is that notwithstanding the clear finding in the appellate order of August 5, 2014, the appraising authority has purported to revisit the entire issue and demand the additional duty which had earlier been exempted under Notification No. 21 of 2012 in the assessed bill of entry at the time that the goods arrived at the port. Indeed, it appears from the table appearing at page 95 of the petition, which is a part of the impugned order-in-original of May 17, 2016, that against the originally assessed duty of nil on account of "SAD", a reassessed duty of Rs. 6,01,605.61/- has been sought to be imposed.
It is not the Customs'' case that the exemption under Notification No. 21 of 2012 was not initially allowed. It is also not the Customs'' case that any appeal was preferred by the department against the initial or tentative assessment made as reflected in the assessed bill of entry in such regard. Once the appellate order dealt with only the refusal to grant the exemption under Notification No. 12 of 2012 and allowed the appeal with the affirmative finding that the exemption demanded had been wrongfully denied, the only exercise left was to refund such amount and not seek to revisit the matter pertaining to the exemption granted under Notification No. 21 of 2012.
The order-in-original dated May 17, 2016 noticed that an appeal had been preferred against the order of August 5, 2014 before the Tribunal, but the stay petition had been dismissed by the Customs, Excise and Service Tax Appellate Tribunal.
In view of such position and the appellate order of August 5, 2014 governing the field, the appraising refund section could not have reopened the assessment initially made and demanded the additional duty in derogation of Notification No. 12 of 2012 despite the same having been allowed earlier.
WP No. 502 of 2016 is allowed by setting aside the order impugned dated May 17, 2016 insofar as it imposes a duty of Rs. 6,01,605.61/- on the petitioner. Accordingly, the petitioner will be refunded the appropriate amount due to the petitioner, along with applicable interest in accordance with law, by disregarding the department''s claim of Rs. 6,01,605.61/-. Such refund should be made within four weeks from date.
The Customs will also pay costs assessed at Rs. 10,000/- to the petitioner.
Urgent certified website copies of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.