Lower Conversion Factor Applicable For Timber Imports Before 11.5.2012: Kerala High Court Allows Refund Of Additional Customs Duty
The Kerala High Court has held that a lower conversion factor is applicable for timber imports made before 11.05.2012. Justice Ziyad Rahman A.A. examined the issue regarding the refund of additional customs duty paid for the import of timber from Myanmar and other foreign countries. The centre of controversy was the conversion factor to be applied for converting the Hoppus Ton,...
The Kerala High Court has held that a lower conversion factor is applicable for timber imports made before 11.05.2012.
Justice Ziyad Rahman A.A. examined the issue regarding the refund of additional customs duty paid for the import of timber from Myanmar and other foreign countries.
The centre of controversy was the conversion factor to be applied for converting the Hoppus Ton, which is the traditional unit of volume applied in Myanmar for the measurement of logs, to the metric system, followed in India, i.e, the cubic meter.
The petitioners/assessee have imported the goods by declaring the conversion factor by treating it as one 1 Hoppus ton is equal to 1.416 cubic meters, whereas the conversion factor applied by the Department was 1 Hoppus ton is equal to 1.8027 cubic meters.
The assessees have imported goods from Myanmar, and in the documents furnished by the assessee for the purpose of customs duty, the quantity was declared in terms of the conversion factor calculated @ 1 Hoppus ton is equal to 1.416 cubic meters.
Later, when the assessees sought for refund of the additional customs duty paid by them in the light of the Notification No.102/2007 Customs dated 14.9.2007, the entire refund was not granted in view of the fact that, as per the standards adopted by the Department, the conversion factor to be applied is 1 Hoppus ton is equal to 1.8027 cubic meter.
Thus, only a portion of the refund was allowed, and to release the goods, a provisional duty bond was directed to be furnished by the assessees.
The assessee referred to the common order passed by the CESTAT in a batch of appeals consisting of 136 cases, where the refund based on the conversion factor based on public notice No.21/2012 dated 11.5.2012 was sought.
The bench opined that since the CESTAT has passed an order, after taking note of the public notice No.21/2012 dated 11.5.2012 and the interim order passed by this Court, the benefit granted to the parties therein is to be extended to the assessees as well.
The bench agreed with the CESTAT that the public notice dated 11.5.2012, where the conversion factor fixed as 1 Hoppus ton is equal to 1.8027 cubic meter, was found to be applicable, only in respect of imports made after 11.5.2012. Evidently, in all these cases, the imports which are the subject matter of the dispute are made before the said date.
In light of the aforesaid CESTAT order, where the application of the conversion factor relied on by the assessee was upheld, and benefits were extended to the parties therein, the bench found no reason to interfere CESTAT order.
In view of the above, the bench allowed the petition and directed the authorities concerned to grant refunds by applying the conversion factor as 1 Hoppus ton is equal to 1.416 cubic meters.
Case Title: M/S National Timbers v. Union of India
Case Number: WP(C) NO. 15946 OF 2011
Citation: 2025 LiveLaw (Ker) 803
Counsel for Petitioner/Assessee: T.M. Abdul Latiff
Counsel for Respondent/Department: P.R. Sreejith and Sreelal Warrier