High Court of KeralaSingle Judge2023-07-21Writ petition dismissed

MRF Limited v. The Assistant Commissioner of Customs (Refunds), Cochin; The Commissioner of Customs, Cochin

Case / Petition Number:WP(C) No. 36583 of 2018

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Dinesh Kumar Singh
Judgment Date: 2023-07-21
Court Decision / Holding: Writ petition dismissed.
Final Disposition: Writ petition dismissed

Parties to the Case

Appellants / Petitioners

M/S. MRF Limited, rep by its Deputy General Manager Materials, Abu Skaria Kandathil

Respondents

The Assistant Commissioner of Customs (Refunds), Custom House, Cochin-682 009, Kerala
The Commissioner of Customs, Custom House, Cochin-682 009, Kerala

Legal Representation & Advocates

Counsels for Petitioners

• E.V. Moly by Ramkumar

Counsels for Respondents

• Sreejith, SC, Central Board of Excise and Customs; Harishankar, SC

Case Synopsis & Summary

MRF Limited, a Chennai-based importer of rubber antioxidant, challenged a refund of excess basic customs duty paid under Customs Notification 52/2011. The petitioner paid 10% basic duty instead of 5% and sought refund of the excess amount. The refund claim was rejected by the Assistant Commissioner of Customs on the ground that refunds could not be processed without modification of the original assessment. The appellate authorities and the CESTAT affirmed the denial on the same basis. On a Division Bench appeal, the Court, by a remand order dated 19.12.2017, set aside the Tribunal’s order and directed a fresh determination after considering the petitioner’s contentions and the reasons for its conclusion. On remand, the Tribunal again allowed the refund, relying on earlier decisions (Bennet Coleman & Co.; Aman Medical Products; Hero Cycles; Micromax) and held that denial of refund for not challenging the assessment order was unsustainable in view of those judgments. The Revenue challenged before the Supreme Court. The Supreme Court in ITC Ltd. v. CCE, Kolkata (IV) held that a refund claim cannot be maintained without challenging the assessment order, reversing the earlier High Court/Tribunal positions. The petitioner argued for adherence to Tribunal directions; the Revenue argued for following the Supreme Court. The High Court ultimately held that the original authority was bound to follow the Supreme Court and not the Tribunal’s erroneous view, and dismissed the writ petition. The petition is thus dismissed.

Provisions of Law Cited

Customs Notification No. 52/2011 dated 25.06.2011

Submissions & Arguments

Contentions of Appellants / Petitioners

Petitioner contends that the Tribunal’s remand directions and the High Court’s directions should be given effect to, and that the law declared by the Tribunal and High Courts should not be overridden by subsequent Supreme Court decisions. It relies on prior judgments (e.g., R. Unnikrishnan; RBF RIG Corporation) and the Tribunal’s remand order to argue that refund could be processed without challenging the assessment order.

Contentions of Respondents

Revenue argues that the Supreme Court’s decision in ITC Ltd. v. CCE, Kolkata (IV) controls and requires challenge to the assessment order for a refund; it asserts that the original authority was bound to follow the law declared by the Supreme Court, even if the Tribunal directed otherwise and even if earlier High Court/Tribunal opinions existed.

Cited Precedents (7)

Case Name	Citation	Treatment	Explanation
Bennet Coleman & Co. v. Custom Commissioner, Bangalore	2008-TIOL-1341-CESTAT-BANG	Overruled	Cited by Tribunal; later Supreme Court ITC decision overruled the view that refunds could follow without challenging the assessment order.
Aman Medical Products Ltd. v. Custom Commissioner, Delhi	2009-TIOL-566-HC-DEL-CUS	Overruled	Earlier position relied upon by Tribunal; ITC case later disapproved this view.
Hero Cycles Ltd. v. UOI	2009-TIOL-317-HC-MUM-CUS	Overruled	Part of the line of cases rejected by ITC’s reversal.
Micromax Informatics Ltd.	2017-TIOL-1302-HC-MAD-CUS	Overruled	Routed through the same trajectory of High Court decisions rejected by ITC.
ITC Ltd. v. Commissioner of Central Excise Kolkata IV	[(2019) 17 SCC 46]	Positive	Supreme Court decision relied upon to hold refunds require challenge to the assessment order; followed by the High Court/Tribunal in the present case.
R. Unnikrishnan and another v. V.K. Mahadevan and others	—	Mentioned Only	Cited by petitioner; not analyzed as controlling law in the judgment.
RBF RIG Corporation, Mumbai v. The Commissioner of Customs (Imports)	[2011 (264) ELT 486 (SC)]	Mentioned Only	Cited by petitioner; not treated as binding in the present decision.

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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 DINESH KUMAR SINGH** **FRIDAY, THE 21[ST] DAY OF JULY 2023 / 30TH ASHADHA, 1945** ## **WP(C) NO. 36583 OF 2018** ## **PETITIONER/PETITIONER:** M/S. MRF LIMITED, REP BY ITS DEPUTY GENERAL MANAGER MATERIALS, MR ABU SKARIA KANDATHIL, NO. 114 GREAMS ROAD, CHENNAI-600 006. BY ADV E.V.MOLY BY RAMKUMAR ## **RESPONDENT/RESPONDENTS:** - 1 THE ASSISTANT COMMISSIONER OF CUSTOMS (REFUNDS), CUSTOM HOUSE, COCHIN-682 009, KERALA. - 2 THE COMMISSIONER OF CUSTOMS CUSTOM HOUSE, COCHIN-682 009, KERALA. - BY ADV SRI.P.R.SREEJITH, SC, CENTRAL BOARD OF EXCISE AND CUSTOMS R.HARISHANKAR-SC ## **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C). NO. 36583 OF 2018 **2** ## **JUDGMENT** ## **Dated this the 21[st] day of July, 2023.** 1. Heard Sri. Ramkumar, learned counsel for the petitioner and Sri. Sreejith, learned Standing Counsel. 2. Petitioner company imported Rubber anti-oxidant through Cochin Customs and paid 10% basic customs duty as against 5% basic customs duty in terms of customs notification No.52/2011 dated 25.06.2011. The petitioner filed refund claim before the Assistant Commissioner of Customs, Cochin for refund of the excess amount of duty paid. The said claim for refund was rejected by the order in O.No.470/2012 on the ground that without modifying the original assessment, refund could not be processed and sanctioned. The appellate authority and the Tribunal has also rejected the appeals on the same ground. 3. Being aggrieved by the said order, petitioner filed an appeal before a Division Bench of this Court being Customs W.P.(C). NO. 36583 OF 2018 **3** Appeal No.16/2017. This Court vide order dated 19.12.2017, set aside the order passed by the Tribunal and remanded the matter to the Tribunal with direction to pass a fresh order by adverting to the contentions of the petitioner and reasons for its conclusion. 4. The Tribunal on remand, vide the order dated 06.04.2018 set aside the order denying refund of excess amount paid by the petitioner. The Tribunal by placing reliance on the decisions passed in the cases of _Bennet Coleman & Co. v. Custom Commissioner Banglore_ [2008-TIOL-1341-CESTAT-BANG], _Aman Medical products Ltd. v. Custom Commissioner, Delh_ i [2009-TIOL-566-HC-DEL-CUS], _Hero Cycles Ltd. v. UOI_ [2009-TIOL-317-HC-MUM-CUS] and _Micromax Informatics Ltd._ [2017-TIOL-1302-HC-MAD-CUS] etc, held that the order denying the refund on the ground that the assessee has not challenged the assessment order, which is final is not sustainable in law in view of the judgments of the various High Courts and the Tribunal. W.P.(C). NO. 36583 OF 2018 5. The Tribunal had remanded the case back to the original authority to consider the claim for refund after considering the law declared by the several High Courts and the Tribunal which were relied on by the Tribunal in its order of remand. 6. On remand, the claim of the petitioner has again been denied on the ground that the Supreme Court in the case of _ITC ltd. v. Commissioner of Central Excise Kolkata_ IV [(2019) 17 SCC 46] held that the claim of refund of the excess amount of the tax paid by the assessee, is not maintainable without challenge to the assessment order. 7. Learned counsel for the petitioner submits that the original authority was bound to follow the directions issued by the Tribunal. He submits that the law declared by the Supreme Court should have been ignored by the original authority, and it should have processed the claim for refund of tax amount paid by the petitioner as per the direction issued by the Tribunal. 8. In support of this contention, Learned counsel for the W.P.(C). NO. 36583 OF 2018 **5** petitioner has placed reliance on the judgment of the Supreme Court in the case of _R. Unnikrishnan and another v. V.K. Mahadevan and others_ , besides the judgment in the case of _RBF RIG Corporation, Mumbai v. The Commissioner of Customs (Imports)_ [2011 (264) ELT 486 (SC)]. 9. Learned Counsel appearing for the Revenue Department submits that the Revenue Department did not challenge the order passed by the Tribunal, whereby the matter was remanded to the original authority. The Revenue Department had already challenged the decisions relied on by the Tribunal before the Supreme Court. When the matter was pending before the Supreme Court, the claim of the petitioner had been rejected. It is further submitted that before the claim for refund could be finalised, the Supreme Court reversed the view of the High Courts and the Tribunal and held categorically that without challenge to the assessment order, an assessee cannot claim refund of the excess amount paid by him even by mistake. W.P.(C). NO. 36583 OF 2018 **6** 10. Learned counsel for the Revenue Department further submits that the Supreme Court has reversed the law enunciated by several High Courts and the Tribunal, and the original authority was bound to follow the law declared by the Supreme Court. 11. I have considered the submissions advanced by the learned counsel for the parties. 12. The judgments which were relied on by the Tribunal in its judgment dated 06.04.2018, were challenged before the Supreme Court by the Revenue Department and the challenge was pending when the order was passed by the Tribunal on 06.04.2018. Therefore, it cannot be said that the view taken by the High Court had attained finality before the Tribunal passed the order on 06.04.2018. Further, I am of the view that if direction issued by the Tribunal or view taken by the Tribunal or High Court, is found to be incorrect by the Supreme Court, on remand, by the Tribunal on the erroneous view, the assessing ## W.P.(C). NO. 36583 OF 2018 **7** authority would be required to follow the law declared by the superior court and not erroneous view of the Tribunal. The assessing authority cannot ignore the law declared by the supreme Court only on the ground that the Tribunal had given the direction to process the claim as per the directions issued by the Tribunal and the view of the Tribunal has been held to be erroneous by the Supreme Court. 13. Therefore, I do not find any substance in the submission of the learned counsel for the petitioner that the original authority was bound to process the claim of the petitioner for refund in accordance with the direction issued by the Tribunal though the Supreme Court has taken a different view in the matter. In view there of, the writ petition fails and is hereby, dismissed. Sd/- rps/ **DINESH KUMAR SINGH, JUDGE** W.P.(C). NO. 36583 OF 2018 **8** ## **APPENDIX OF WP(C) 36583/2018** PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF CUSTOMS NOTIFICATION 52/2011 DATED 25.6.2011. EXHIBIT P2 TRUE COPY OF REFUND OF CLAIM DATED 1.6.2012. EXHIBIT P3 TRUE COPY OF ORDER-IN-ORIGINAL NO.470/12 DATED 6.9.2012. EXHIBIT P4 TRUE COPY OF ORDER IN APPEAL NO.COC-CUSTM-000-APP-23814-15 DATED 16.7.2014. EXHIBIT P5 TRUE COPY OF FINAL ORDER NO.20379/17 DATED 16.3.2017. EXHIBIT P6 TRUE COPY OF HIGH COURT CUSTOMS APPEAL NO.16/17 DATED 19.12.2017. EXHIBIT P7 TRUE COPY OF TRIBUNAL FINAL ORDER NO.20549/18 DATED 6.4.2018. EXHIBIT P8 TRUE COPY OF ORDER-IN-ORIGINAL NO.590/18 DATED 7.9.2018 PASSED BY THE IST RESPONDENT. EXHIBIT P9 TRUE COPY OF BOARD CIRCULAR 24.2.2003 AND CIRCULAR DATED 26.6.2014. EXHIBIT P10 TRUE COPY OF DHIREN CHEMICALS INDUSTRIES REPORTED IN 2002 TIOL-83-SC-CX-CB. EXHIBIT P11 TRUE COPY OF PN 65 ISSUED BY CHENNAI CUSTOMS ON REFUNDS.