2009 (6) TMI 829 - AT - Customs

Refund - Excess duty paid erroneously - Held that - The appellants shall be entitled to refund of the excess duty paid on correction of the error in assessment subject to the scrutiny from the angle of unjust enrichment.

Summary

Issues:
1. Whether a refund claim for excess duty paid can be entertained without challenging the assessment order?
2. Whether the provisions of Section 154 of the Customs Act, 1962 apply to rectify clerical errors made by importers in the Bill of Entry?
3. Whether the importer is entitled to a refund of excess duty paid due to a clerical error even if the assessment order was not challenged through the appeal process?

Issue 1 - Refund Claim and Challenging Assessment Order:
The case involved an excess payment of duty by M/s. Symrise Pvt. Ltd. (SPL) due to an error in the invoice amount. The Deputy Commissioner informed SPL that a refund claim was not maintainable as the assessment order had become final and suggested filing an appeal. The Commissioner (Appeals) upheld this decision citing legal precedents. However, the Tribunal considered SPL's reliance on CBEC Circular and previous judgments to support the argument that without challenging the assessment order, a refund claim could be pursued. The Tribunal agreed with SPL, emphasizing that the absence of a challenge during assessment did not preclude the right to claim a refund.

Issue 2 - Section 154 of Customs Act for Clerical Errors:
The Tribunal analyzed the applicability of Section 154 of the Customs Act, 1962 in rectifying clerical errors. The Commissioner (Appeals) had held that Section 154 only applied to errors by departmental officers, not importers. However, the Tribunal referred to previous cases where importers could claim refunds due to clerical errors under Section 154 even without filing a refund claim under Section 27. The Tribunal clarified that importers could seek correction of errors through Section 154, irrespective of whether the assessment order was challenged or not.

Issue 3 - Entitlement to Refund for Clerical Error:
The Tribunal addressed whether the importer was entitled to a refund of excess duty paid due to a clerical error, even if the assessment order was not challenged. Relying on precedents and the provisions of Section 154, the Tribunal concluded that the importer had the right to claim a refund for excess duty paid as a consequence of a clerical error, regardless of the finality of the assessment order. The Tribunal allowed SPL's appeal, granting them the refund of excess duty paid, subject to scrutiny for unjust enrichment.

In summary, the Tribunal ruled in favor of M/s. Symrise Pvt. Ltd., allowing their appeal for a refund of excess duty paid due to a clerical error in the assessment, emphasizing the applicability of Section 154 of the Customs Act for rectifying such errors by importers, irrespective of challenging the assessment order.