2018 (9) TMI 762 - AT - Customs

Refund claim - excess payment of duty consequent upon rebate discount given by the Supplier - refund claim was rejected mainly on the ground that the assessment made by the appellant in the Bill of Entry reached its finality, which they have not challenged - Held that - Tribunal in the case of Commissioner of Customs (Export) New Delhi Vs. Lalit Kumar 2017 (1) TMI 7 - CESTAT NEW DELHI after considering the decision of Priya Blue Industries Limited 2004 (9) TMI 105 - SUPREME COURT OF INDIA , dismissed the appeal filed by the Revenue, and held that since the Bill of Entry was assessed by the Customs Department and the assessed duty was paid by the respondent, it cannot be said that the duty was paid by the respondent in pursuance of an order of assessment. The case of the respondent falls under the second category i.e. borne by him contained in Section 27 ibid, according to which, since the duty incidence has been borne by the respondent, claiming of refund of such excess duty in terms of Section 27 ibid, in our view is in conformity with the statutory provisions. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on finality of assessment; Interpretation of Section 27 for claiming refund of Customs Duty; Distinction between duty paid in pursuance of an order of assessment and duty borne by the importer.

Analysis:
The appeal was filed against the Order-in-Appeal rejecting a refund claim on excess payment of Excise duty due to a rebate discount by the Supplier. The Commissioner (Appeals) upheld the rejection based on the finality of the assessment made by the appellant in the Bill of Entry, which was not challenged. The Tribunal analyzed a similar case and held that the cause of action for filing an appeal arises when the refund application is not considered at the time of assessment, allowing the appeal before the Commissioner (Appeals) within the limitation period.

The Tribunal further interpreted Section 27 of the Customs Act, which allows claiming refund of duty paid in pursuance of an order of assessment or borne by the importer. In this case, since the duty incidence was borne by the importer, the Tribunal found the refund claim to be in conformity with statutory provisions. The judgment distinguished a Supreme Court case where duty was paid in pursuance of an assessment order, emphasizing that in this case, the duty was borne by the importer, allowing for a refund claim under Section 27.

Additionally, the Tribunal referred to a High Court case where it was held that duty borne by the importer can claim a refund under Section 27. The Tribunal emphasized that in cases where there is no assessment order under dispute, as in this situation, the party can file a refund claim even without challenging an assessment order. Therefore, the impugned Order was set aside, and the appeal was allowed based on the interpretation of Section 27 and the distinction between duty paid in pursuance of an assessment order and duty borne by the importer.