Case law

Custom, Excise & Service Tax Tribunal · 19 Oct 2017

M/S. Hadeed Steels Pvt. Limited vs The Commissioner Of Customs

Legal principle

Section 26A of the Customs Act, 1962 bars refund only where goods have been cleared for home consumption and are later identified and exported as illegally imported goods; duty paid on goods never cleared for home consumption is refundable under Section 27 without unjust enrichment, with interest under Section 27A after three months from the refund application.

Court decision

The Tribunal allowed the appellant's appeal and set aside the impugned order, holding that Section 26A did not apply because the goods were not cleared for home consumption, that the appellant was entitled to refund of the duty, that unjust enrichment was not attracted, and that the appellant was entitled to interest under Section 27A after expiry of three months from the date of filing the refund application (25.3.2011), per Ranbaxy Laboratories Ltd. vs. UOI.

Facts

M/s Hadeed Steels Pvt. Ltd. filed a Bill of Entry dated 26.10.2010 for clearance of 84 MT of Light Melting Scrap under CTH 7204 4900 and paid import duty of Rs.2,28,027/-, assessed under RMS. On examination, all four containers were found to contain pressed bundles of cans, plastic covers, plastic bottles and hazardous waste prohibited under the Hazardous Wastes Management, Handling and Transboundary Movement Rules, 2008, i.e., mis-declared hazardous waste in the guise of LMS. The mis-declared goods were confiscated, ordered re-exported at the importer's risk and cost on payment of redemption fine of Rs.1,50,000/- and penalty of Rs.75,000/- under Section 112(A) of the Customs Act, and were subsequently re-exported. The importer's refund claim of Rs.2,28,027/- was rejected by the adjudicating authority (Order-in-Original No.234/2011 dated 10.8.2011) on the ground that it was an offence case, making refund untenable under Section 26A of the Customs Act, 1962, and the Commissioner (Appeals) upheld the rejection.

Key provisions