2016 (9) TMI 878 - HC - Customs

Refund claims under Section 27 of Customs Act 1962 - petitioner filing return admitting liability at 20 percent assessment finalized by competent authority - notification no. 103/2004-Customs dated 30.09.2004 of Union of India reduced custom duty to 15 percent w.e.f. 01.10.2004 - whether authority considering refund claim can sit in appeal over an assessment made by a competent officer for the purpose of refund when such assessment is not modified by an order of competent authority in appropriate proceeding? - Held that - the decision in the case of Priya Blue Industries Ltd. Vs Commissioner of Customs (Preventive) 2004 (9) TMI 105 - SUPREME COURT OF INDIA would apply. Since assessment has not been modified in accordance with procedure prescribed in statute therefore in the garb of refund officer concerned cannot take a different view so as to refund an amount paid as per assessment order. Hence so long as assessment as such continue no refund is admissible to petitioner. The petitioner may utilize alternative legal remedy if available - petition dismissed - decided against petitioner.

Summary

Issues:
- Mandamus to pass suitable order on refund claims under Section 27 of Customs Act, 1962.
- Authority's power to sit in appeal over an assessment for the purpose of refund.

Analysis:
The judgment revolves around a petition seeking a mandamus to direct the respondent authorities to decide on refund claims under Section 27 of the Customs Act, 1962. The petitioner initially admitted a liability of 20 percent, which was accepted by the competent authority through an Assessment Order marked as 'Assessed.' Subsequently, the petitioner discovered a reduction in custom duty to 15 percent via a government notification and filed a refund application accordingly. However, the assessment made by the competent authority remained unchanged without any modification, correction, or alteration through any formal process.

The crux of the matter lies in determining whether an authority handling refund claims can override an assessment made by a competent officer without any modification or alteration through the appropriate legal channels. The judgment references the case of Priya Blue Industries Ltd. Vs Commissioner of Customs (Preventive) to emphasize that once an assessment order is passed, the duty remains payable as per that order unless it is reviewed or modified through an appeal or under Section 28 of the Act. The court clarifies that a refund claim is distinct from an appeal proceeding, and an officer processing a refund claim does not have the authority to review or alter an assessment order independently.

In light of the legal principles outlined in the referenced case, the court concludes that in the absence of any modification to the assessment order as per the statutory procedure, the officer handling the refund claim cannot deviate from the original assessment to grant a refund. Therefore, as long as the assessment remains unchanged, no refund is deemed admissible to the petitioner. Consequently, the writ petition seeking a mandamus for a refund is dismissed for lacking merit. However, the judgment clarifies that the dismissal does not preclude the petitioner from pursuing any other legal remedies available to seek relief in this matter.