Case law

Kerala High Court · 8 Nov 2024

Commissioner Of Customs vs M/S. Hadeed Steels Pvt.Ltd

Legal principle

Where imported goods are never cleared for home consumption but are re-exported in their entirety, the taxable event for the levy of import duty does not materialise and the Customs Department has no justification to retain the duty paid.

Court decision

The Kerala High Court (Dr. A.K. Jayasankaran Nambiar and K.V. Jayakumar, JJ.) dismissed the revenue's appeal by judgment dated 08.11.2024, answering all three questions of law against the appellant/Revenue and in favour of the respondent importer, thereby upholding the Tribunal's direction to refund the import duty of Rs.2,28,027/- (with interest under Section 27A as directed by the Tribunal).

Facts

M/s Hadeed Steels Pvt. Ltd. filed a Bill of Entry dated 26.10.2010 for clearance of 84 metric tons of light melting scrap and paid import duty of Rs.2,28,027/- without waiting for the 'out of customs charge' endorsement. Inspection at the port revealed that all four containers held hazardous waste prohibited for import under the Hazardous Waste (Management, Handling and Trans boundary Movement) Rules, 2008, i.e., a misdeclaration. On the importer's request, the department permitted re-export of the entire cargo subject to a redemption fine of Rs.1,50,000/- and a penalty of Rs.75,000/-, both of which were paid, and the goods were re-exported without ever being cleared for home consumption or leaving the customs area. The importer's refund claim for Rs.2,28,027/-, filed within the time permitted under the Customs Act, was rejected by the original authority and the First Appellate Authority, but CESTAT, Bangalore, allowed the importer's appeal and directed refund of the duty with interest under Section 27A. The Commissioner of Customs, Kochi, appealed to the Kerala High Court against the Tribunal's order dated 19.10.2017.

Key provisions