2015 (5) TMI 879 - HC - Customs

Denial of refund claim - Where and admittedly there is a nil assessment order, whether the assessee is entitled to claim refund without making a challenge to such assessment order - Held that - As the provisional assessment as well as the final assessment in respect of all the bills of entry were nil assessment, the question of raising a challenge to the said orders before the Appellate Authority would not arise at all. The appellant cannot be said to be aggrieved by the said orders and consequently, the question of filing any appeal would not arise. The judgment of the Apex Court relied upon by the authorities which levied duties, would not be applicable to the present case. In the cases before the Apex Court, there was an assessment order levying duty which was not challenged. This is not the situation in the present case. In the present case, the assessment order was a nil assessment and no duties were levied and as such, the appellant cannot be said to be aggrieved by such order. In such circumstances, we find that the reliance by the Commissioner (Appeals) and CESTATE on the judgment of the Apex Court in the case of Priya Blue Industries Ltd. (2004 (9) TMI 105 - SUPREME COURT OF INDIA) is not justified in the present case. - appellant cannot be said to be aggrieved with the correctness of the order of nil assessment. The order sanctioning refund passed by the Assistant Commissioner dated 14/12/2007 is accordingly justified. Consequently, the orders passed by the Commissioner (Appeals) and the order passed by the CESTAT cannot be sustained and deserve to be quashed and set aside - Decided in favour of assessee.

Summary

Issues Involved:
Whether an assessee is entitled to claim a refund without challenging a nil assessment order.

Analysis:
The judgment by the Bombay High Court involved a dispute where the appellant sought a refund without challenging nil assessment orders. The key issue was whether the appellant, who had paid certain amounts under protest, was entitled to claim a refund without challenging the nil assessment orders. The appellant argued that since the assessment orders were nil assessments and no duties were levied, there was no need to challenge them. The respondent contended that without challenging the assessment orders, the appellant could not seek a refund.

The court analyzed the provisions of Section 17(5) of the Customs Act, which required the proper officer to pass a speaking order giving reasons in case of reassessment contrary to self-assessment. The court noted that in the present case, the assessment orders were nil assessments, and hence, the appellant was not required to challenge them. The court rejected the respondent's contention that the appellant should have sought reasons for the assessment orders, as the law did not mandate it in cases of nil assessments.

Moreover, the court referred to a judgment of the Delhi High Court in a similar case, where it was held that if a party is not aggrieved by an assessment order, there is no need to file an appeal challenging it. The court agreed with this view and concluded that since the appellant was not aggrieved by the nil assessment orders, the orders passed by the Commissioner and CESTAT were not justified. Therefore, the court allowed the appeal, quashed the orders passed by the Commissioner and CESTAT, and upheld the appellant's right to claim a refund without challenging the nil assessment orders.

In conclusion, the court ruled in favor of the appellant, emphasizing that in cases of nil assessment orders where no duties were levied, the appellant was entitled to claim a refund without challenging the assessment orders. The judgment highlighted the importance of considering the specific circumstances of each case, especially when determining the need to challenge assessment orders before seeking a refund.