2011 (4) TMI 1140 - AT - Customs

Refund of certain excess amounts of duty paid by them, without the bar of unjust enrichment Held that - in the case of Priya Blue Industries Ltd. (2004 - TMI - 47045 - SUPREME COURT OF INDIA) held a refund claim to be not maintainable in the absence of successful challenge to the assessment on the basis of which the duty was paid by the assessee, without successful challenge to assessment of goods, the assessee cannot claim refund of any amount of duty which is claimed to have been paid wrongly, appeals are dismissed

Summary

Issues:
Refund of excess duty paid under protest without challenging assessments.

Analysis:
The appellant filed appeals against a common order of the Commissioner seeking a refund of excess duty paid without the bar of unjust enrichment. The duty was enhanced by the assessing authority for imported second-hand machinery. The refund claims were rejected on the grounds that assessments were not challenged. The appellant argued that duty paid under protest should be considered a challenge to the assessments. The assessing authority was requested to pass speaking orders under Section 17 of the Customs Act. However, the Revenue contended that a refund claim is not maintainable unless the assessment order is challenged and modified/set aside, citing a Tribunal's Larger Bench decision. The Tribunal held that without a successful challenge to the assessment, the assessee cannot claim a refund of wrongly paid duty.

The Tribunal noted that no copy of the show-cause notice was available to ascertain the grounds for rejecting the refund claim. The original authority justified the enhancement of value and rejected the refund claims based on the lack of challenges to assessment orders. The Tribunal found no evidence of a departmental practice requiring speaking orders by the assessing authority. Although assessed bills of entry are appealable, the absence of a successful challenge to the assessment, as per Supreme Court rulings, renders refund claims not maintainable. The Tribunal dismissed the appeals, stating that there was no scope to direct the assessing authority or unsettle final assessments.

In conclusion, the Tribunal upheld the decision to dismiss the appeals, emphasizing the necessity of challenging assessment orders to claim a refund of wrongly paid duty, as established by legal precedents and the Customs Act. The absence of challenges to assessments rendered the refund claims not maintainable, despite the duty being paid under protest.