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Judgment
The present appeal is directed against the impugned order dated 19.03.2020 passed by the Commissioner of Customs (Appeals) whereby the appeal
of the appellant is rejected.
Briefly the facts of the present case are that the appellant is engaged in import and repacking/trading of industrial enzymes falling under CTH 3507
and has been importing goods at Bangalore ICD, ACC, and Chennai Sea Port regularly. The appellant has inadvertently paid the amount twice
towards certain bill of entries covered by the Order-in-Original and Order-in-Appeal due to ICEGATE/EDI problem and had claimed refund of the
excess payment. The appellant filed refund application with the Deputy/Assistant Commissioner of Customs (Refund), ICD, Bengaluru for refund of
an amount of Rs.92,07,343/- on account of excess payment due to EDI/ICEGATE problem which resulted in double payment towards Customs duty,
along with refund application, the appellant had submitted confirmation from PAO, New Delhi which confirmed double payment towards certain bill of
entries. The Assistant Commissioner of Customs (Refund) ICD, Bangalore had passed the Order-in-Original dated 28.11.2018 sanctioning refund of
Rs.81,56,506/- but rejected the refund of Rs.10,49,491/- on the ground that the payment towards two bills of entry fall under the jurisdiction of ACC,
Bangalore as the imports were made from ACC, Bangalore in respect of two said bills of entry. As per the Assistant Commissioner, the appellant
should file the refund claim before the ACC, Bangalore. Thereafter, vide letter dated 31.12.2018, the appellant requested the Deputy Commissioner of
Customs (Refund) ACC, Bangalore for grant of refund of rejected portion. Pursuant to the said request, the adjudicating authority sought clarification
on the refund and the appellant submitted before the authority that the amount claimed is not a refund of duty and is only a refund of double amount
paid. Thereafter, the original authority rejected the refund claim on the ground that the claim is time barred. Aggrieved by the said order, the appellant
filed appeal before the Commissioner (Appeals) and the Commissioner (Appeals) has also rejected the appeal of the appellant. Hence, the present
appeal.
Heard both the parties and perused the records of the case.
Learned Counsel for the appellant submitted that the impugned order denying the refund on the time bar is not sustainable in law as the same has
been denied without appreciating the facts, circumstances and the law laid down by the various Courts. He further submitted that the refund has been
claimed towards excess deposit of the amount which was never appropriated towards any bill of entry. He further submitted that the double payments
were made towards clearance of goods and due to ICEGATE problem, the appellant was asked to pay the duty twice with respect of Bill of Entry
No.7887737 dated 20.12.2016 and 7888334 dated 20.12.2016. He further submitted that the factum of double payment has been admitted by the
original authority but the original authority wrongly rejected the refund with regard to these two bills of entry on the ground that he is not the
competent authority to grant the refund and the appellant should file the refund before ACC, Bangalore. He further submitted that the bills of entry
with reference to which the amounts have been paid twice were provisionally assessed during the relevant point of time due to pendency of SVB
proceedings. He further submitted that these two bills of entry were finally assessed by closure of Provisional Duty Bond by ACC, Bangalore in 2019
and was communicated to the appellant vide letter dated 04.01.2019. He further submitted that as per Section 27(1B) of the Customs Act 1962 which
provides that “the period of limitation of one year shall be computed in the following mannerâ€. Section 27(1B)(c) of the Act reads as below:
“(c) where any duty is paid provisionally under Section 18, the limitation of one year shall be computed from the date of adjustment of
duty after the final assessment thereof or in case of re-assessment, from the date of such re-assessment.â€
4.1. Learned Counsel further submitted that in the present case, duty has been appropriated to particular bill of entry on closure of Bond which was
communicated to the appellant on 04.01.2019 and from this date even if it is treated as duty then the refund claim cannot be held to be time barred. He
further submitted that both the authorities have relied upon Regulation 2(1) of Customs Refund Application (Form) Regulations, 1995 for denying the
refund on time bar. He further submitted that as per Regulation 2 (3) of the Customs Refund Application (Form) Regulations, 1995, proper officer is
required to issue a Deficiency Memo whereas in the present case, the original authority did not issue any Deficiency Memo on the ground of
jurisdiction. He further submitted that it is not in dispute that the first claim filed before the Assistant Commissioner, ICD, Bangalore, was in time and
if he had no jurisdiction then it was incumbent upon him to send the application to the concerned officer who had jurisdiction and he relied upon the
decision in the case of Singh International Vs CC (General), 2014-TIOL2369-CESTAT-MUM wherein it was held by the Tribunal that “since the
original application for refund was filed within time, though before wrong authority, it cannot be said that the application was barred by limitation
Appeals allowed: CESTATâ€
4.2. He further submitted that it has been consistently held that the amount unless appropriated as duty, does not take colour of duty but the learned
Commissioner (Appeals) has distinguished merely on the ground that the facts of the cases are completely different. Learned Counsel also relied upon
the decisions of CESTAT, Bangalore in the case of Bangalore Metro Rail Corporation Ltd., 2015 (326) ELT 336 wherein it has been categorically
held that for the double payment due to system error, the Customs Department has to support the importer for paying the double payment.
On the other hand, learned AR defended the impugned order.
After considering the submissions of both the parties and perusal of the material on record, I find that it is not in dispute that the appellant has made
payment twice on account of the technical problem in ICEGATE and the fact of double payment was also confirmed from PAO, New Delhi which
confirms double payment towards certain bills of entry for which the refund was filed. Further, I find that the refund application was filed with the
ICD, Bangalore which has partly allowed the refund but rejected the refund of Rs.10,49,491/- on the ground that the payment towards two bills of
entry fall under the jurisdiction of ACC, Bangalore as the imports were made from ACC, Bangalore. Further, I find that when the application for
refund was made before the Assistant Commissioner of Customs, ICD, Bangalore, the same was within time and as per Customs Refund Application
(Form) Regulations, 1995, if there was a defect of jurisdiction then it was incumbent upon the Assistant Commissioner to raise a Deficiency Memo
and should have returned those bills of entry to the appellant so that the appellant could have filed the refund clam before the correct jurisdictional
authority but that Deficiency Memo was not issued and finally when the Order-in-Original dated 28.11.2019 was issued then the refund of
Rs.10,49,491/- was not granted. Further, I find that subsequent adjudication authority rejected the refund only on account of time bar without
appreciating that originally refund was filed in time before the Assistant Commissioner of Customs, ICD, Bangalore. Both the authorities have failed to
consider the decision rendered in the case of Singh International Vs CC (General) (supra) wherein it has been held by the Tribunal that if the original
application for refund was filed within time, though, before wrong authority, it cannot be said that the application was barred by limitation. Further, I
also find that in the additional submissions filed by the appellant, the appellant has also submitted that the bills of entry with reference to which the
amounts have been paid twice were provisionally assessed during the relevant point of time due to pendency of SVB proceedings and those bills of
entry were finally assessed by closure of provisional duty Bond by ACC, Bangalore in 2019 and communicated to the appellant on 04.01.2019 and has
also submitted the documentary proof of final assessment of the said bill of entry and as per Section 27(1B)(c) (supra) where any duty is paid
provisionally under Section 18, the limitation of one year shall be computed from the date of assessment of duty after the final assessment. If the
Department consider the same as duty even then the period of one year will start from 04.01.2019 and the refund filed by the appellant is found to be
within time. Further, I find that the CESTAT, Bangalore in the case of Bangalore Metro Rail Corporation Ltd. (supra) has categorically held that if
double payment is made due to system error then the Department should refund the double payment to the importer. It is pertinent to reproduce the
findings of CESTAT which is contained in Para 5 as under:
“5. After hearing both sides and considering the records and documents, we find that this is a matter which should not have travelled to
this Tribunal at all. The original adjudicating authority had acted correctly. It has to be noted that refund claim has been made immediately
and refund received within the financial year and therefore, question of showing it as expenditure would not arise at all. It cannot also be
shown as receivable since the original adjudicating authority sanctioned the refund on 14-12-2012. The importation took place on 7-9-
2012. The second payment was made on the advice of department and because of the helplessness of the department to connect payment
earlier made to the Bill of entry and make the computer system facilitate clearance of goods. In such a situation, requiring the appellant to
prove unjust enrichment is against the spirit of law. Learned Commissioner (Appeals) observed that the assessee has to prove that there was
no unjust enrichment beyond any doubt. Even in murder cases, an offence is required to be proved only beyond reasonable doubt when a
person can be hanged for the offence committed. Here the Commissioner is requiring an importer to prove beyond any doubt that there is
no unjust enrichment when there is a clear case of double payment and the problem that has arisen in the computerized system of the
department and inability of the department to help an importer not to make second payment. No importer would be happy to make the
second payment and claim refund. For three months, more than Rs. 80 lakhs have been with the Government for which no interest is
payable. We find absolutely no justification to uphold the impugned order. The appeal is allowed with consequential relief, if any, to the
appellant even though the matter has been placed before us only for considering the application for waiver of pre-deposit and stay against
recovery. This is because litigation should not have been there in this case after the original authority sanctioned the refund.â€
In view of my discussion above and by relying upon the ratio of the decision in the case of Singh International (supra) and Bangalore Metro Rail
Corporation Ltd. (supra), I am of the considered view that the impugned order rejecting the refund on time bar is not sustainable in law and I set aside
the same by allowing the appeal of the appellant with consequential relief, if any.
(Order pronounced in Open Court on 17/06/2021)