Date – 22 August 2022

Facts

• The appellant, M/s Huhatamaki PPL Ltd., has been denied a refund of ₹ 16,98,720 claimed on 28 December 2016 for being beyond the threshold of limitation prescribed in section 27 of the Customs Act, 1962 because the liability of ₹ 3,01,64,821 had been discharged between 1st August 2014 and 28th May 2015 in seven tranches as intended for adjustment towards certain duty foregone along with interest and penalty.
• The liability to penalty, reduced to 15% of the amount payable under section 114A of Customs Act, 1962 by the newly incorporated clause (5) in section 28 of Customs Act, 1962.
• A show cause notice was issued dated 14th September 2009 under section 28 of Customs Act, 1962 to recover duty foregone on imports effected by recourse to benefit of notification no. 104/2009-Cus. for which the appellant was ineligible for the same. 
• Appellant challenged the rejection of the claim but Commissioner of Customs (Appeals), Mumbai-II upheld the order of the original authority.
• Aggrieved, the Appellant filed for an appeal before the Tribunal.

 Issue

• Whether the claim for a refund due to the reduction of penalty in section 28 sustainable?

Order

• The authorities observed that duty and interest liability were made good before the issue of show cause notice despite which proceedings under section 28 of Customs Act, 1962 were initiated and penalty under section 114A of Customs Act. 1962 was invokable. However, under the new incorporation in section 28 of the Customs Act, 1962, the facility of reduced penalty was made available.
• The recovery was required to be completed by issue of adjudication order; however, under the new incorporation in section 28 of Customs Act, 1962, facility of reduced penalty was made available and the appellant opted for the benefit bringing the proceedings to a conclusion on their own which, even without a speaking adjudication order, is closure and not dropping of proceedings.
• The authorities held that though there was a reduction in penalty, the appellant cannot opt himself for the benefit by concluding the proceedings. Revisit of such concluded proceedings is possible only through the appellate process and if an excess is paid then it is accessible only by consequential relief.
• The authorities held that the claim for refund is not maintainable and the appeal is dismissed.