2010 (9) TMI 267 - AT - Customs

Refund - endorsement in Bill of Entry - refund claim which has been rejected on the ground that the appellant had not challenged the final assessment order passed by endorsement in the bill of entry - Held that - the original adjudicating authority while adjudicating the show cause notice, has also followed the correct procedure prescribed under Section 18, which provides that when there is a shortfall, the assessee shall pay deficient or amount in excess is refunded - even in the cases of provisional assessment finalization, refund claims are required to be filed under Section 27 and are required to be examined, the order of the original adjudicating authority - Therefore, rejection of refund claim on the ground that the endorsement in bill of entry was not challenged by way of appeal, cannot be justified

Summary

Issues:
1. Liability to pay coal cess at a specific rate.
2. Validity of show cause notice and final assessment.
3. Rejection of refund claim based on non-challenge of final assessment.

Analysis:
1. The appellant filed a Bill of Entry that was provisionally assessed, and the final assessment was made later. A show cause notice was issued demanding differential coal cess. The original adjudicating authority dropped the demand and ordered a refund claim. The appellant's refund claim was rejected for not challenging the final assessment order. The tribunal noted that the finalization resulted in short payment, and a show cause notice was issued on the same day. The tribunal held that the final assessment was only completed upon the adjudication order, not at the time of endorsement in the bill of entry. Thus, the appellant's action in filing a refund claim was deemed appropriate as per the law.

2. The tribunal emphasized that the department should have issued a show cause notice before finalizing the assessment in case of a shortfall in payment. The tribunal found no reason for the importer to challenge the final assessment when a show cause notice was already issued for the shortfall. The original adjudicating authority followed the correct procedure under Section 18 for provisional assessment finalization. Refund claims are required to be filed under Section 27 even in cases of provisional assessment finalization. Therefore, the rejection of the refund claim based on not challenging the endorsement in the bill of entry through an appeal was deemed unjustified.

3. Considering the above analysis, the tribunal allowed the appeal and granted consequential relief to the appellant. The decision highlighted the importance of following proper procedures in finalizing assessments and emphasized the legality of filing refund claims in such cases.