Refund of Excess Duty paid - No appeal against assessed Bill of Entry

PJ/Case Laws/2011-12/1527

Refund of Excess Duty paid - No appeal against assessed Bill of Entry - whether permissible

Case: - AMAN MEDICAL PRODUCTS LTD VS COMMISSIONER OF CUSTOMS, DELHI

Citation: - 2009-TIOL-566-HC-DEL-CUS

Issue-cum-Brief Facts:- Whether an assessee who is entitled for concessional rate of duty pays the higher duty by inadvertence is not entitled to grant of refund of excess duty paid unless he had filed an appeal against the order by which he had deposited the duty on filing of the bill of entry?

Whether non-filing of appeal against the assessed Bill of Entry in which there was no lis between the importer and the revenue at the time of payment of duty will deprive the importer of his right to file refund claim under section 27 of the Customs Act, 1962?

Appellant’s Contention:- The Assessee contend that in the present case no ‘order’ has been passed because the assessee simply filed the bill of entry and paid the custom duty in mistake without taking the benefit of the notification No. 6/2002 dated 1.03.2002 due to ignorance. The Customs Excise and Service Tax Appellate Tribunal (CESTAT) has passed an order holding that in pursuance to an order of assessment necessarily implies that a payment of duty must be pursuant to an assessment order before a refund in appeal can be asked for under section 27 of the Customs Act, 1962 (hereinafter referred to as ‘the Act’)

Respondent’s Contention:- The Tribunal has referred to the cases of CCE, Ltd. [2000(120) ELT 285] = (2002-TI0L-208-SC-CX) and Priya Blue Industries Ltd. Vs. Commissioner of Customs (Preventive) 2004 (TIOL-78-SC-CUS] . In both these cases, referred to by the Tribunal there was an assessment order which was passed and consequently it was held that where an adjudicating authority passed an order which is appealable and party did not chose to exercise the statutory right of appeal, it is not open to party to question the correctness of the order of the adjucating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing his order. These judgements will therefore not apply when there is no assessment order on dispute/contest, like as is in the facts of the present case.

Reasoning of Judgment:- The High Court referred to the language of Section 27 and noted that it is more than clear that the duty which is paid is not necessarily pursuant to order of assessment but can also be borne by him? Clause (i) & (ii) of Sub Section (1) of Section are clearly in the alternative as the expression or is found in between clauses (i) and (ii). The object of Section 27(1) (ii) is to cover those classes of case where the duty is paid by a person without an order of assessment, i.e. in a case like the present where the assessee pay the duty in ignorance of a notification which allows him concessional rate of duty merely after filing a Bill of Entry. In fact such a case is the present case in which there is no assessment order for being challenged in the appeal which is passed under Section 27 (1) (i) of the Act because there is no contest or lis and hence no adversial assessment order. The Delhi High Court concluded that the refund claim of the appellant was maintainable under Section 27 of the Custom Act and the non-filing of the appeal against the assessed bill of entry does not deprive the appellant to file its claim for refund under section 27 of the Customs Act,1962 and which claim was fall under clause (ii) of sub section (1) of Section 27. The High Court accordingly set aside the impugned order dated 3.4.2008 of the CESTAT and uphold the order of the Commissioner of Customs Appeal dated 28.01.2005 and remand of the matter to the original authority viz Deputy Commissioner of Customs (Refund) to examine the merit of the matter in accordance with law after providing due opportunity to the appellant

Decision:- Appeal allowed.

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PJ/Case Laws/2011-12/1527

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