2014 (1) TMI 429 - AT - Customs

Denial of refund claim - Non provisional assessment of Bill of Entry - Duty under protest not paid - Reassessment of refund claim - Held that - where there was no lis between the two parties at the time of assessment of the Bill of Entry or at the time of clearance of the goods from the warehouse because it appears that the fact that a notification was issued on the date of clearance was not known to either side. Therefore, it cannot be said that the assessment finalized a dispute which was existing between the two parties - There is nothing in the order which would suggest that a patent mistake which was not adjudicated upon could not be rectified through the refund mechanism under section 27 of the Customs Act In fact in that case the assessee s refund claim was rejected on the ground that the claim was filed beyond the time limit prescribed and not for the reason that the order was not challenged under section 128. Duty was paid under protest which implies that there was a dispute between the department and the importer initially. In the facts of the present case there was no dispute between the appellant and the Department at the time of import but an assessment was done based apparently on wrong figures which both sides did not notice. By processing the refund claim there is no review of an adjudication done earlier because no dispute was adjudicated by the assessment order. The fact that the appellant could have challenged the assessment under section 128 of the Customs Act cannot be a reason to deny processing of a refund claim if filed within the four corners of the provisions under section 27 of Customs Act - if there was a dispute between the two parties at the time of import where there are inadvertent errors, the remedy under Section 27 can be resorted to without challenging the so called assessment order on the Bill of Entry - matter is remitted to the adjudicating authority for examining the refund claim to see whether the requirement under section 27(1A) of the Customs Act has been complied with and then decide the claim - Decided in favour of assessee.

Summary

Issues Involved:
1. Determination of the applicable tariff value for imported goods.
2. Legality of the refund claim without challenging the original assessment.
3. Consideration of unjust enrichment in the refund claim.

Issue-wise Detailed Analysis:

1. Determination of the applicable tariff value for imported goods:
The appellant imported RBD Palmolein and filed a Bill of Entry for warehousing the goods, later filing an ex-bond Bill of Entry for clearance. The goods were assessed based on the tariff value notified under Section 14(2) of the Customs Act, 1962. The Bill of Entry was assessed on 24.9.2001 at a tariff value of USD 372 per MT. However, the appellant paid the duty and removed the goods on 9.10.2001, the same date when a new notification reduced the tariff value to USD 302 per MT. As per Section 15(1)(b) of the Customs Act, the tariff value applicable should be the one prevailing on the date of removal from the warehouse. Hence, the appellant argued that the tariff value of USD 302 per MT should have been adopted.

2. Legality of the refund claim without challenging the original assessment:
The appellant filed a refund claim for the excess duty paid, which was rejected by the Department on the grounds that the Bill of Entry was not assessed provisionally, and the duty was not paid under protest. The adjudicating authority cited decisions from the Hon'ble Supreme Court in the cases of M/s. Super Cassette Industries and M/s. Priya Blue Industries, stating that re-assessment cannot be done in a refund claim without challenging the original assessment. The appellant contended that there was no dispute at the time of assessment regarding the tariff value, and the new tariff value was not known to either party at the time of clearance. The appellant relied on the Delhi High Court's decision in Aman Medical Products Ltd., which held that if excess duty was paid due to ignorance, a refund claim could be sought under Section 27 of the Customs Act without challenging the assessment order.

3. Consideration of unjust enrichment in the refund claim:
The Tribunal noted that there was no dispute between the appellant and the Department at the time of assessment, and the assessment was based on incomplete information. The Tribunal distinguished this case from the decisions in Flock India Pvt. Ltd. and Priya Blue Industries, where there were disputes at the time of assessment. The Tribunal held that the refund claim could be processed under Section 27 of the Customs Act if filed within the prescribed time limit, and there was no need to challenge the assessment order under Section 128. However, the Tribunal remitted the matter to the adjudicating authority to examine the issue of unjust enrichment under Section 27(1A) of the Customs Act before deciding the refund claim.

Conclusion:
The appeal was disposed of with the direction to the adjudicating authority to examine the refund claim for compliance with the requirements under Section 27(1A) of the Customs Act concerning unjust enrichment and then decide the claim accordingly.