In a recent ruling, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter of LG Electronics’ incomplete application submission for a customs refund claim citing justice over procedural deficiencies.
LG Electronics India Pvt. Ltd., the appellate imported LCD panels for monitors and LCD televisions, paying Rs. 4,03,75,333 in customs duties under an incorrect tariff classification. The goods were initially classified under tariff item 9013 8010, but the authorities reassessed them under a higher tariff item 8529 9090, which resulted in differential duty payments.
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LG Electronics contested this higher classification and argued to postpone the appeal as a related classification dispute was pending before the Supreme Court. They referenced section 27A of the Customs Act, 1962, which requires refund claims to be disposed of within three months.
Despite the appellant’s request to keep the refund claim pending until the final Supreme Court judgment, the authority rejected the claim on December 17, 2011, due to failure to address documentary deficiencies and failure to challenge the assessment directly.
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The customs authorities also contended that the refund claim could not be entertained because the assessments were not challenged.
Aggrieved by the decision, the company appealed before the Mumbai Bench of CESTAT, that the assessment was unjustified, and a “speaking order” was not issued as required by section 17(5) of the Customs Act, 1962.
The appellate counsel relied on the Videocon Industries case, where the Tribunal had ruled in favor of the importer under a similar tariff classification dispute. Based on this, the counsel requested a reassessment of their bills of entry.
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The two-member bench comprising C J Mathew (Technical Member), and Ajay Sharma (Judicial Member) observed that the customs authority had rejected the refund claim on procedural grounds (missing documents) without adequately considering the merits of the case.
The tribunal noted that despite the unresolved dispute about classification, customs did not wait for the final court ruling before rejecting the claim, which the tribunal found inappropriate.
The tribunal emphasized that, in the interest of fairness and justice, the appellant’s claim should not be dismissed solely on procedural deficiencies.
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Therefore, the tribunal restored the refund application to the original authority, allowing the appellate to resubmit the necessary documents and have their refund claim re-examined according to the correct tariff classification and legal precedent.
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