2008 (12) TMI 554 - AT - Customs

Summary

Issues involved: Whether the requirement of filing a refund claim under Section 27 of the Customs Act for the refund of a specific amount after final assessment is correct or not.

In the case, 14 bills of entries assessed between September 1991 to May 1996 were finally assessed by the Asst. Commissioner in 2006 after multiple rounds of litigation. The issue of levy of SED and the correctness of the duty rate remained pending with the Asst. Commissioner. The main question in this appeal was regarding the Asst. Commissioner's action in demanding the appellants to file a refund claim under Section 27 of the Customs Act for the refund of Rs. 26,53,440/- determined to be admissible to them post final assessment.

The appellant argued that Section 27 was not applicable, and the refund amount should have been granted automatically after finalization of the refund claim. The appellant also cited previous Tribunal decisions to support their stance. On the contrary, the Departmental Representative contended that the principle of unjust enrichment applies to all cases, necessitating the appellants to file a refund claim under Section 27.

After hearing both sides, it was noted that the requirement of filing a refund claim under Section 27 was introduced in Section 18 only on 13-7-2006. Prior to this, Section 18(2) of the Customs Act stipulated that the importer/exporter shall pay the deficiency or be entitled to the refund after final assessment. Therefore, the Asst. Commissioner, upon confirming the appellants' eligibility for the refund, should have proceeded to sanction the refund instead of mandating the filing of a refund claim. The issue of whether a refund claim must be filed post finalization of provisional assessment was settled, and it was determined that the refund should be sanctioned without any claim suo motu, citing relevant decisions.

The decisions supporting this view included cases such as M/s. Mafatlal Industries Ltd., M/s. Hindustan Lever Ltd., M/s. Sreeram Pistons & Rings Ltd., and M/s. TVS Suzuki Ltd. Based on the above position, the appeal was allowed, and it was ordered that the amount deemed admissible as a refund be paid to the appellants.