High Court of KeralaSingle Judge2014-09-17Writ petition disposed of

Malabar Extrusions Pvt. Ltd. v. Union of India

Case / Petition Number:WP(C).No. 16331 of 2014 (N)

Neutral Citation::null

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. R. Ramachandra Menon
Judgment Date: 2014-09-17
Court Decision / Holding: The impugned orders are set aside and the 3rd respondent is directed to reconsider the refund claim in accordance with law, with an opportunity for hearing for the petitioner. The matter must be finalized within two months from the receipt of a copy of the judgment.
Final Disposition: Writ petition disposed of

Parties to the Case

Appellants / Petitioners

Malabar Extrusions Pvt. Ltd., St. Martin Compound, Peppathy, Veliyanad u P.O., Arakkunnam, Ernakulam, PIN - 682 319 represented by its Executive Director Joji Augustine

Respondents

Union of India represented by the Secretary, Ministry of Finance, New Delhi
The Commissioner of Customs, Customs House, Willington Island, Kochi-682 009
The Commissioner of Customs (Appeals), Customs House, Willington Island, Kochi-682 009
The Assistant Commissioner (Imports) Customs House, Willington Island, Kochi – 682 009
The Assistant Commissioner of Customs (Refunds) Customs House, Willington Island, Kochi-682009

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Sri. Manuel Thomas

Counsels for Respondents

• Adv. Sri. Thomas Mathew Nellimoottil, SC

Case Synopsis & Summary

This petition challenges the refund denial on an import transaction where Malabar Extrusions Pvt. Ltd. deposited Rs. 10,31,659 as customs duty under Ext. P1 for Bill of Entry No. 6286579 (dated 19.3.2012). The petitioner later discovered the goods were not exigible to duty and therefore filed Ext. P5 for refund on 29.3.2012. The refund was repudiated by the Assistant Commissioner (Refunds) by Ext. P6 on 11.4.2012, holding that since the assessment order stands, a refund cannot be entertained unless the order is modified by a procedure known to law. The petitioner then filed Ext. P7 under Section 128 of the Customs Act, seeking relief by way of an appeal, which was not numbered and ultimately rejected by Ext. P9 (01.06.2012) on the ground that Section 128 was not applicable. The petitioner submitted further representations (Exts. P10–P11) including a clarification (Ext. P11) that appeals are possible only against orders passed by ADC/JC/DC/AC; an extended delay was claimed for the appeal. The court examined the law, noting that Section 128 confers power to render justice by allowing timely reconsideration. It held the refund claim was within time and capable of merit-based adjudication, set aside the extant orders, and directed the 3rd respondent to reconsider with hearing within two months. The writ petition was disposed of on these terms.

Provisions of Law Cited

Section 128 of the Customs Act, 1962

Submissions & Arguments

Contentions of Appellants / Petitioners

Petitioner contends that the refund claim under the Customs Act is a legitimate remedy when the Bill of Entry results in excess deposit and the goods are not exigible to duty; it asserts that the refund mechanism should be entertained and that the process of modifying an assessment order can be pursued by the competent authority. The petitioner contends that it was never afforded a hearing before Ext. P9 and that the 60-day time frame under Section 128 should not bar consideration of the refund on merits; the remedy lies in a reasoned reconsideration by the appropriate authority.

Contentions of Respondents

Refers to the proposition that refund applications are not substitutes for appeals; the Bill of Entry can be treated as a self-assessment order and may be modified by the assessing authority or Commissioner; after expiry of the period for filing an appeal, the department cannot entertain the refund claim in isolation; relies on existing Supreme Court precedents (Priya Blue Industries; Flock India) to support the non-entitlement of refunds as substitute for appeals; argues that the appeal must be maintained under the prescribed time limits.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive)	(2005) 10 SCC 433	Positive	Cited to support the proposition that a refund claim cannot substitute for an appeal, guiding the legal framework for time limits under Section 128.
Collector of Central Excise, Kanpur v. Flock (India) Pvt. Ltd., Kanpur	AIR 2000 SC 2484	Positive	Used to reinforce the view that refunds are not a substitute for appeal and that modifications to orders must be processed within established procedures.
Singh Enterprises v. Commissioner of Central Excise, Jamshedpur & Others	(2008) 3 SCC 70	Mentioned Only	Cited in the context of a second aspect of the argument; not directly controlling the outcome but referenced in the discussion.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON** **WEDNESDAY, THE 17TH DAY OF SEPTEMBER 2014/26TH BHADRA, 1936** ## **WP(C).No. 16331 of 2014 (N)** **----------------------------** ## **PETITIONER :** - **--------------------** **MALABAR EXTRUSIONS PVT. LTD., ST.MARTIN COMPOUND, PEPPATHY, VELIYANADU P.O., ARAKKUNNAM ERNAKULAM, PIN - 682 319 REPRESENTED BY ITS EXECUTIVE DIRECTOR JOJI AUGUSTINE** ## **BY ADV. SRI.MANUEL THOMAS** **RESPONDENT(S) :** **----------------------------** **1. UNION OF INDIA REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE NEW DELHI, PIN – 110 001.** **2. THE COMMISSIONER OF CUSTOMS CUSTOMS HOUSE, WILLINGTON ISLAND,** **KOCHI-682 009.** **3. THE COMMISSIONER OF CUSTOMS (APPEALS) CUSTOMS HOUSE, WILLINGTON ISLAND,** **KOCHI-682 009.** **4. THE ASSISTANT COMMISSIONER (IMPORTS) CUSTOMS HOUSE, WILLINGTON ISLAND,** **KOCHI – 682 009.** **5. THE ASSISTANT COMMISSIONER OF CUSTOMS (REFUNDS) CUSTOMS HOUSE, WILLINGTON ISLAND, KOCHI-682009.** ## **R1 TO R5 BY ADV. SRI.THOMAS MATHEW NELLIMOOTTIL, SC** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17-09-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Mn** **...2/-** ## **WP(C).No. 16331 of 2014 (N) ----------------------------------------** ## **APPENDIX** ## **PETITIONERS' EXHIBITS :** ## **-------------------------------------** |**EXT.P-1:**|**TRUE COPY OF BILL OF ENTRY BE NO.6286579 DATED 19.3.2012.**| |---|---| |**EXT.P-2:**|**TRUE COPY OF CHELAN NO.2003266944 DATED 23.3.2012 REMITTING**| ||**OF RS.10,31,659/- BY THE PETITIONER AS PER EXT.P-1.**| |**EXT.P-3:**|**TRUE COPY OF RELEVANT PARTS OF NOTIFICATION NO.21/2008**| ||**CUSTOMS DATED 1.3.2008 ISSUED BY IST RESPONDENT.**| |**EXT.P-4:**|**TRUE COPY OF RELEVANT PARTS OF NOTIFICATION NO.12/2012**| ||**DATED 17.3.2012 ISSUED BY IST RESPONDENT.**| |**EXT.P-5:**|**TRUE COPY OF REFUND CLAIM DATED 29.3.2012 SUBMITTED BEFORE**| ||**THE 2ND RESPONDENT.**| |**EXT.P-6:**|**TRUE COPY OF ORDER REJECTING CLAIM FOR REFUND DATED**| ||**11.4.2012 OF THE 5TH RESPONDENT.**| |**EXT.P-7:**|**TRUE COPY OF APPEAL DATED 8.5.2012 FILED BY THE PETITIONER**| ||**BEFORE THE 3RD RESPONDENT.**| |**EXT.P-8:**|**TRUE COPY OF LETTER DATED 8.5.2012 SUBMITTED BEFORE THE**| ||**3RD RESPONDENT.**| |**EXT.P-9:**|**TRUE COPY OF ORDER DATED 1.6.2012 PASSED BY THE 3RD**| ||**RESPONDENT.**| |**EXT.P-10:**|**TRUE COPY OF LETTER DATED 22.6.2012 SUBMITTED BY THE**| ||**PETITIONER BEFORE THE 3RD RESPONDENT.**| |**EXT.P-11:**|**TRUE COPY OF LETTER DATED 11.9.2013 SUBMITTED BY THE**| ||**PETITIONER BEFORE 3RD RESPONDENT AND ORDER DATED**| ||**11.9.2013 PASSED BY THE 3RD RESPONDENT.**| |**EXT.P-12:**|**TRUE COPY OF REFUND CLAIM DATED 26.6.2012 BEFORE THE**| ||**ASSISTANT/DEPUTY COMMISSIONER OF CUSTOMS/APPRAISING**| ||**(IMPORTS) REFUNDS WILLINGTON ISLAND, KOCHI - 682 009 WITH A**| ||**COVERING LETTER DATED 26.6.2012.**| |**EXT.P-13:**|**TRUE COPY OF REPRESENTATION DATED 31.1.2014 SUBMITTED BY**| ||**THE PETITIONER BEFORE THE 3RD RESPONDENT.**| |**EXT.P-14:**|**TRUE COPY OF LETTER DATED 3.2.2014 SUBMITTED BY THE**| ||**PETITIONER BEFORE THE 3RD RESPONDENT TO RECONSIDER**| ||**EXT.P-7 APPEAL.**| **(Contd...)** **WP(C).No. 16331 of 2014 (N)** ## **EXT.P-15: TRUE COPY OF ORDER DATED 13.3.2014 PASSED BY THE 3RD RESPONDENT.** ## **EXT.P-16: TRUE COPY OF THE CALCULATION SHEET OF CUSTOM DUTY.** **RESPONDENT(S)' EXHIBITS : NIL** **-------------------------------------------------------------** **//TRUE COPY//** **P.A. TO JUDGE** **Mn** ## **P.R. RAMACHANDRA MENON, J.** ======================== ## W.P.(C). No. 16331 of 2014 -------------------------------------------Dated this the 17[th] day of September, 2014 ## **JUDGMENT** Rejection of the refund claim put forth by the petitioner, for excess deposit of customs duty pursuant to Ext.P1, is under challenge in this writ petition. 2. Undisputed facts disclose that, the petitioner, on import of goods, submitted Ext.P1 Bill of Entry and duty was satisfied accordingly, effecting total deposit of 10,31,659/- under various₹ heads. Subsequently, the petitioner realized that the commodity imported by the petitioner was not exigible to customs duty and accordingly, a refund application was preferred before the concerned authority vide Ext.P5 dated 29.3.2012. This was turned down by the Assistant Commissioner Customs (Refund) as per Ext.P6 dated 11.04.2012 holding that, in so far as the assessment order stands, for not having it modified by a procedure known to law, the claim of the petitioner for effecting the refund was not liable to be entertained. 3. It was in the said circumstance, that the petitioner W.P.C. No. 16331 of 2014 -2- approached the 3[rd] respondent by submitting Ext.P7 appeal under Section 128 of the Customs Act, 1962. The appeal was not numbered and the same was rejected as per Ext.P9 proceedings dated 01.06.2012, holding that, Section 128 of the Customs Act was not liable to be invoked for claiming refund. The petitioner made a further representation by way of Ext.P10 dated 22.6.2012 before the Commissioner, pointing out the facts and figures and also alerting him that, no opportunity of hearing was given to the petitioner before passing Ext.P9 order. This was followed by Ext.P11 dated 11.09.2013, wherein an endorsement was made by the 3[rd] respondent/Commissioner in the form of a clarification, to the effect that, appeal would be possible only against an order passed by ADC/JC/DC/AC and for want of any such order, the appeal was not maintainable under Section 128 of the Customs Act. 4. The petitioner moved the 3[rd] respondent further by way of Ext.P13, followed by Ext.P14 representation referring to the sequence of events, which was rejected by the said respondent as per Ext.P15, stating that the appeal was belated, having been preferred after the stipulated period of 60 days. This in turn is W.P.C. No. 16331 of 2014 -3- under challenge in this writ petition. 5. Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents. 6. The learned Standing Counsel appearing for the respondents submits that the refund application is not a substitute for appeal and since the law stands well settled that, the Bill of Entry itself could be treated as a self assessment order, the same could have been modified on approaching the concerned authorities, either the assessing authority or the Commissioner, without which the refund application could not have been entertained. It is also pointed out that, once the stipulated period for filing the appeal is over, it is not liable to be entertained by the Departmental authorities, in view of the law declared on this point as well. The learned counsel sought to rely on the decisions rendered by the Supreme Court in **Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive)** (2005) 10 SCC 433 and **Collector of Central Excise, Kanpur v. Flock (India) Pvt. Ltd., Kanpur (** AIR 2000 (SC) 2484) with regard to the first aspect and with regard to the second aspect, the decision in **Singh Enterprises v. Commissioner of Central** W.P.C. No. 16331 of 2014 -4- ## **Excise, Jamshedpur & Others** (2008) 3 SCC 70 is relied on. 7. After hearing both the sides, this Court finds that there is no dispute with regard to the liability, which stands already declared by the Apex Court and by this Court on many an occasion. The basic aspect to be considered is whether the petitioner had actually approached the competent authority for getting the assessment order/Bill of Entry modified and what transpired thereafter. It was pursuant to Ext.P6 that the petitioner filed Ext.P7 appeal before the 3[rd] respondent. In Ext.P7, the date of service of the impugned order has been clearly mentioned by the petitioner against 'column No. 4', that the same was served to the petitioner on 23.03.2012. The appeal was preferred on 8.5.2012, which is well within the time prescribed under the statute. The same was rejected by the appellate authority stating that Section 128 was not attracted. 8. Section 128 of the Customs Act reads as follows: “Sec.128. Appeals to Commissioner (Appeals) (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a Commissioner of Customs may appeal to the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or W.P.C. No. 16331 of 2014 -5- order. Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days. (1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf.” Subsequently, the representation preferred by the petitioner was rejected as per the endorsement made in Ext.P11 in the following terms: “It is clarified that an appeal is possible only against an order passed by ADC/JC/DC/AC. Without that, the appeal has no validity under Section 128 of the Customs Act.” The rejection lastly, is for the reason that the appeal was not preferred within 60 days as given in Ext.P15. The reasons given by the concerned authorities at different points of time do not reconcile with each other and the fact remains that the petitioner W.P.C. No. 16331 of 2014 -6- was never given an opportunity of hearing before passing Ext.P9 order. 9. After hearing both the sides and on going through the provisions of law, particularly the mandate under Section 128 of the Act, power is vested with the competent authority to deal with the situation so as to render justice, passing appropriate orders. The appeal preferred by the petitioner against Ext.P1 is well within time and as such, it ought to have been considered, passing appropriate orders on merits. 10. In the said circumstance, the impugned orders are set aside and the 3[rd] respondent is directed to reconsider the matter with regard to the claim for refund preferred by the petitioner passing appropriate orders in accordance with law. This shall be done after giving an opportunity of hearing to the petitioner. The matter shall be finalized at the earliest, at any rate, within 'two months' from the date of receipt of a copy of this judgment. The writ petition stands disposed of. ## **P.R. RAMACHANDRA MENON, JUDGE.** kp/-