2009 (7) TMI 107 - HC - Customs

Refund Claim Assessment Short landing of imported goods held that - it was the responsibility of the assessing/proper officer to re-assess (in view of provisions of sub-section (4) of Section 17) and correctly determine the duty leviable in accordance with law before clearing the goods for home consumption. He having failed to do so, had caused great injustice to the appellant / importer and it was open for the importer/assessee to file an application for refund under Section 27 of the Act without taking recourse to filing of an appeal - orders passed in appeal by the Commissioner (Appeals) and the learned Tribunal are thus not sustainable - the claim of refund of excess duty paid by the appellant-importer/assessee in the facts of the case is allowed.

Issues Involved:

1. Refund claim on excess duty paid.
2. Finality of assessment orders.
3. Competence of the Assistant Commissioner to decide the refund matter.
4. Interpretation of Sections 17, 27, and 149 of the Customs Act, 1962.
5. Applicability of Supreme Court judgments in similar cases.

Detailed Analysis:

1. Refund claim on excess duty paid:

The appellant-importer/assessee imported heavy melting scrap and paid duty based on the declared weight in the Bills of Entry. Upon physical examination, the actual weight was found to be less, leading to the filing of refund claims for the excess duty paid. The Assistant Commissioner of Customs allowed these refund claims, as the material received was less than declared and no unjust enrichment was involved. However, the Commissioner (Appeals) and the Tribunal later reversed this decision, stating that the assessment orders had attained finality and could not be revisited for refund purposes.

2. Finality of assessment orders:

The Commissioner (Appeals) held that since the assessment orders were not challenged, reviewed, or modified in appeal, they had attained finality. Therefore, the Assistant Commissioner could not decide on the refund matter arising from his own assessment order. This view was upheld by the Tribunal, which relied on the Supreme Court decisions in *Collector of Central Excise, Kanpur v. Flock (India) Pvt. Ltd.* and *Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive)*.

3. Competence of the Assistant Commissioner to decide the refund matter:

The appellant argued that the Assistant Commissioner, who assessed the duty and found the weight discrepancy, was competent to reassess and refund the excess duty under Section 17(4) and Section 27 of the Act. The High Court agreed, stating that the Assistant Commissioner had the authority to reassess the duty based on the physical examination report and to amend the Bill of Entry under Section 149 of the Act. The High Court found that the Assistant Commissioner was the proper officer to handle the refund application, and his initial order allowing the refund was correct.

4. Interpretation of Sections 17, 27, and 149 of the Customs Act, 1962:

- Section 17: The proper officer is required to examine and assess the duty on imported goods. If discrepancies are found, the goods can be reassessed.
- Section 27: Allows any person to claim a refund of excess duty paid within six months from the date of payment. The Assistant Commissioner can order a refund if satisfied that the duty was indeed overpaid and not passed on to another person.
- Section 149: Permits the amendment of documents, including the Bill of Entry, based on existing documentary evidence at the time of clearance.

The High Court emphasized that the duty must be assessed and collected according to law and on the actual goods imported. The Assistant Commissioner, having found the weight discrepancy, was responsible for reassessing the duty and processing the refund.

5. Applicability of Supreme Court judgments in similar cases:

The High Court distinguished the present case from the Supreme Court judgments in *Flock (India)* and *Priya Blue*. In those cases, the disputes involved the rate of duty and classification, requiring adjudication. In contrast, the present case involved a factual discrepancy in weight, not a legal dispute over duty rates. Therefore, the High Court held that the ratio of those cases did not apply here.

Conclusion:

The High Court allowed the appeal, setting aside the orders of the Commissioner (Appeals) and the Tribunal. It restored the Assistant Commissioner's order, sanctioning the refund of excess duty paid by the appellant-importer/assessee. The High Court held that the refund claim was maintainable and rightly sanctioned, as the Assistant Commissioner was competent to reassess the duty and process the refund based on the physical examination report.

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