2012 (10) TMI 386 - AT - Customs

Refund claim of duty paid under protest rejected on ground that if the assessment is not challenged by filing any appeal, the refund claim made u/s 27 would not be maintainable - assessee imported Coking coal classifiable under heading 27011910 and claimed benefit of exemption Notification No.21/2002 - provisional assessment under Heading 27011910 @5% BCD - Held that - The basic philosophy denying refund without challenging an Assessment Order, as held by the Apex Court in case of PRIYA BLUE INDUSTRIES LTD (2004 (9) TMI 105 - SUPREME COURT OF INDIA), rests on the principle that the proceedings of refund and filing of appeal against an assessment order are two separate proceedings and the scheme under the Act meticulously provides relief to the assessee, when the assessment order is not acceptable to him. It provides that when an assessee is aggrieved by the assessment order, the recourse open to him is to file an appeal before the appellate forum instead of asking for refund directly by short-circuiting the process of appeal prescribed to be followed under the Act, before the appropriate authority. Appeal filed by the Appellant is dismissed.

Issues Involved:
1. Classification of imported goods.
2. Provisional assessment and final assessment of Bill of Entry.
3. Refund claim under Section 27 of the Customs Act, 1962.
4. Applicability of the Supreme Court's decision in Priya Blue Industries Ltd.
5. Authority of the Superintendent of Customs in assessment matters.
6. Requirement of filing an appeal against the assessment order for refund claim.

Detailed Analysis:

1. Classification of Imported Goods:
The Appellant imported 48592 MT of Century PCI Coal and classified it under Chapter Heading 27011910, claiming the benefit of exemption Notification No.21/2002-Cus. The Customs Authorities, however, reclassified the PCI Coal under Chapter Heading 27011990, changing the duty liability from nil to 5%.

2. Provisional Assessment and Final Assessment of Bill of Entry:
The Bill of Entry was initially assessed provisionally under Chapter Heading 27011910 with applicable duties amounting to Rs.3,48,57,562/-, which the Appellant paid under protest. The final assessment was communicated on 10.03.2010, and the Appellant subsequently submitted a refund application on 02.04.2010.

3. Refund Claim under Section 27 of the Customs Act, 1962:
The lower authority rejected the refund claim, citing the Supreme Court's decision in Priya Blue Industries Ltd., which held that if the assessment is not challenged by filing an appeal, the refund claim under Section 27 is not maintainable. The Appellant's contention that they bore the incidence of duty and did not pass it on to any other party was not accepted.

4. Applicability of the Supreme Court's Decision in Priya Blue Industries Ltd.:
The Tribunal upheld the lower authority's decision, stating that the principle laid down in Priya Blue Industries Ltd. applies, which mandates that an assessment order must be challenged through an appeal for a refund claim to be valid. The Tribunal noted that the Appellant did not file an appeal against either the provisional or final assessment.

5. Authority of the Superintendent of Customs in Assessment Matters:
The Appellant argued that the Superintendent of Customs is not an officer of Customs and thus not authorized to perform assessment functions. The Tribunal, however, did not find merit in this argument, noting that the assessment includes provisional assessment as per Section 2(2) of the Customs Act, 1962.

6. Requirement of Filing an Appeal Against the Assessment Order for Refund Claim:
The Tribunal emphasized that the Appellant should have filed an appeal against the provisional assessment, as indicated in their letter dated 03.11.2008. The Tribunal referred to the Bombay High Court's decision in Karan Associates, which held that even in the absence of a speaking order, an assessed Bill of Entry is appealable, and failure to appeal renders a refund claim non-maintainable.

Conclusion:
The Tribunal dismissed the Appeal, upholding the lower authority's decision and reinforcing the principle that a refund claim under Section 27 of the Customs Act is not maintainable unless the assessment order is challenged through an appeal. The Tribunal found no reason to interfere with the Order passed by the Commissioner (Appeals).

Pronounced on 05.07.2012

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