2008 (8) TMI 261 - AT - Customs

Refund claim of duty paid in excess by mistake - apex court s ruling rendered in Flock (India) case and Priya Blue Industries case is to the effect that, where duty was paid as assessed, its refund cannot be claimed by the assessee without the assessment order being set aside in a statutory appeal and that an assessment order cannot be challenged by way of a refund claim. This ruling is squarely applicable to the instant case - therefore, original authority rightly rejected the claim on the ground that the order of assessment had not been modified in appeal

Summary

Issues:
Claim for refund of duty rejection due to inclusion of previously cleared goods in a new Bill of Entry for green channel clearance.

Analysis:
1. The appellant filed an appeal against the rejection of a claim for refund of duty amounting to Rs. 4,03,683. The duty was paid on 50 pieces of "Electroplated Grinding Wheel" covered by a Bill of Entry. The issue arose when 30 pieces were physically available for clearance, while the remaining 20 pieces had already been cleared earlier. The appellant mistakenly included the 20 pieces in the new Bill of Entry for green channel clearance, leading to the excess duty payment. The refund claim was rejected by the original authority citing non-modification of the assessment order in appeal.

2. The appellant, in the appeal, acknowledged that challenging the assessment was necessary for a valid refund claim. However, they contended that the delay in processing the refund application deprived them of the opportunity to challenge the assessment. The appellant sought a refund based on equity and cited a Tribunal decision allowing a refund in a similar case. The respondent argued that the cited decision was not relevant to the current issue. The green channel facility, which allows clearance without physical examination, was also explained by the respondent.

3. The Tribunal found that the appellant opted for the green channel facility, leading to clearance without physical examination. The assessing officer trusted the declarations made by the appellant in the Bill of Entry, resulting in the duty payment and clearance of goods. The appellant failed to rectify the error or challenge the assessment promptly, making the assessment final and binding. The Tribunal referenced apex court rulings stating that a refund claim cannot be made without setting aside the assessment order through a statutory appeal. As the appellant did not follow the proper procedures, the Tribunal upheld the rejection of the refund claim.

4. Consequently, the Tribunal upheld the impugned order, dismissing the appeal. The operative part of the order was pronounced in open court on 11-8-2008.