Order Date – 10 February 2023

Parties: Principal Commissioner of Customs Vs M/s Lava International Limited

Facts – 

• The Respondent, M/s Lava International Limited, imported parts and accessories of mobile phones during February 2014 to July 2014. Additional duty of customs leviable @ of 6% under Serial No. 263A of the Notification No. 12/2012-CE dated 17.03.2012 was paid by the respondent. Under the said Notification a manufacturer is also given an option to pay excise duty at the rate of 1% on mobile phones subject to the fulfillment of the condition that CENVAT credit on inputs and capital goods is not claimed .
• The above benefits were not availed by the respondent at the time of import as it was under an impression that it did not satisfy the condition set out in the Notification. 
• After favourable judgment of Supreme Court in SRF, the respondent filed letters dated 16.05.2015 and 05.06.2015 for re-assessment of the Bills of Entry and also claimed refund of differential CVD. The Bills of Entry were initially re-assessed in March 2018 by the Deputy Commissioner and consequently, the respondent applied for refund of differential CVD. 
• These six refund applications were rejected by a common order dated 25.11.2019 by the Assistant Commissioner for the reason that they were time barred and for the reason that the Supreme Court in ITC Ltd. vs. Commissioner of Central Excise, Kolkata-IV and others had held that an assessment order can be challenged in an appeal filed under section 128 of the Customs Act.
• However, the Commissioner (Appeals), allowed the refund.

Issue –

• Whether refund could have been claimed by the respondent as the Bills of Entry were amended under section 149 of the Customs Act and whether the refund claims filed by the respondent were barred by time.

Order – 

• The Tribunal observed that in view of the decisions of the Bombay High Court in Dimension Data India and the Telangana High Court in Sony India, the respondent could take recourse to appropriate proceedings, including the provisions of sections 149 or 154 of the Customs Act for either seeking amendment of the Bills of Entry. These two decisions have placed reliance on the decision of the Supreme Court in ITC.
• In the present case, the order carrying out an amendment in the Bills of Entry under section 149 of the Customs Act attained finality, as the department did not challenge these orders in appeal.
• Hence, department cannot contest the claim of the respondent while seeking refund filed as a consequence of the re-assessment of the Bills of Entry or amendment in the Bills of Entry. The Commissioner (Appeals), therefore, committed no illegality in taking a view that refund has to be granted to the respondent as the order for amendment in the Bills of Entry had attained finality.
• Further, the refund claim is not time barred as the question of refund would arise only when the assessment order is rectified.