Telangana HC Directs Customs Commissioner to Amend BOE so as to Enable Importer to Take Refund of Excess CVD Paid

Amendment of Bill of Entry -

The Hon'ble Supreme Court in an important decision has dismissed the SLP filed by the CBIC against decision of Hon'ble Telangana High Court in the case of Sony India.

Hon'ble Telangana High Court had held that the Section 149 of the Customs Act, 1962 does not prescribe any time limit for seeking amendment of Bills of Entry hence an importer can seek amendment at any point of time.

In M/s. Sony India (P) Ltd. v. Union of India [Writ petition no. 4793 of 2021 dated August 12, 2021] the Hon’ble Telangana High Court directed the Custom Commissioner to amend the Bill of Entry (BOE) so as to enable the Importer to claim refund of excess Countervailing Duty (CVD) paid.

Facts: M/s Sony India (P) Ltd. (“the Petitioner”) is engaged in the business of manufacture and marketing of different types of electronic goods and consumer electronics including mobile phones. During the period August 04, 2014 to January 29, 2015 it imported mobile phones in India for trading purposes.

On import of the said mobile phones under the BOE, it paid CVD at the rate of 6%. However such mobile phones were chargeable to concessional rate of 1% subject to the condition that no credit should have been availed on the inputs or capital goods used in the manufacture of mobile phones.

The Petitioner contends that this reduced rate was not availed as the Commissioner (“the Respondent”) had taken a stand that such exemption is available only when the assessee has not taken credit in respect of the inputs and capitals goods under the CENVAT Credit Rules, 2004 for the manufacture of mobile phones. Since the inputs and capital goods in the present case were procured and utilized outside India, the Respondent was of the view that the reduced rate would not be available to the Petitioner and during the above period, the EDI system did not permit availment of the lower rate of tax.

The Petitioner contended that they were also eligible to avail of the benefit of the reduced rate of 1% in terms of Supreme Court judgement in M/s. SRF Limited v. Commissioner of Customs [2015 (318) ELT 603], wherein it was held that where lower rate of Excise Duty has been provided with condition of non-availment of CENVAT Credit, CVD shall also be applicable at lower rate as an importer-trader cannot avail CENVAT Credit in any case, and that the condition attached to the lower rate is deemed to be fulfilled.

But the EDI System used for filing the BOE was not updated to make available the benefit of the exemption to imported goods; the benefit of the exemption was not extended to Petitioner, despite it seeking the same; and due to deficiency in the system, the benefit of exemption otherwise eligible was deprived to it and it was forced to pay CVD at merit rate.

Held: The Hon’ble Telangana High Court in Writ petition no. 4793 of 2021 dated August 12, 2021 held as under:

I. In terms of the decision of the Hon’ble Supreme Court in M/s. SRF Limited supra lower rate of CVD shall also be applicable to importer-trader who cannot avail CENVAT Credit in any case.

II. Section 149 of the Customs Act, 1961 does not prescribe any time limit for amending the BOE filed and assessed. The power to amend BOE is a discretionary power vested with the authority. Since, it is due to incorrect determination of duty by the assessing authority initially, the Petitioner is compelled to seek amendment of BOE.

III. Hence, directed the Respondents to amend the BOE so that the Petitioner can claim refund of excess CVD paid.