2019 (9) TMI 1115 - HC - Customs

Refund of Excess Customs Duty - time limitation - main contention of the petitioner, as advanced in the writ petition, is that, in the absence of an appealable order, the petitioner was unable to appeal against the assessment of the Bs/E filed by it and that, therefore, the observation, of the part of the AC, in the impugned letter dated 8th September, 2019, that the petitioner ought to have appealed against the assessment of the Bs/E filed by it, was without merit - HELD THAT - We are not called upon to express any opinion on any appeal which the petitioner may, if so advised, choose to prefer, against the assessment of the three Bs/E filed by it, either on the aspect of limitation, or on merits. Any such appeal, preferred, would, needless to say, have to be decided, by the competent appellate authority, in accordance with law. Learned counsel appearing for the petitioner submits, candidly, that he would be satisfied if this writ petition is disposed of by permitting the petitioner to prefer an appeal against the assessment of the Bill of Entry with the direction to the respondents to decide the same in accordance with law. It is directed that, as and when appeal is preferred by this petitioner against the assessment of the Bills of Entry filed by it, the same will be decided by the respondents in accordance with law - petition disposed off.

Issues Involved:
1. Entitlement to exemption under Notification 46/2011-Cus.
2. Claim for refund of excess duty paid.
3. Requirement of a speaking order for assessment.
4. Maintainability of refund claims without appealing the assessment order.
5. Legal precedents affecting the refund claim process.
6. Petitioner's remedy in light of recent Supreme Court judgment.

Detailed Analysis:

Entitlement to Exemption under Notification 46/2011-Cus:
The petitioner, an importer of raw cotton fiber from Indonesia, classified the fiber under Tariff Heading 14049090, attracting a 30% ad valorem duty. The petitioner claimed partial exemption under S. No. 5 of Notification 46/2011-Cus, which was denied by customs authorities, leading to the payment of excess duty under protest.

Claim for Refund of Excess Duty Paid:
The petitioner paid an excess duty of ?10,93,425/- and sought a refund through three claims dated 2nd April 2013, corresponding to the three Bills of Entry. The refund claims were for ?3,85,079/-, ?3,92,835/-, and ?3,15,511/- respectively.

Requirement of a Speaking Order for Assessment:
The petitioner requested a speaking order under Section 17(5) of the Customs Act, 1962, which was not responded to, prompting the petitioner to seek information under the Right to Information Act, 2005. The response indicated that relevant papers had been destroyed in a fire.

Maintainability of Refund Claims Without Appealing the Assessment Order:
The Assistant Commissioner of Customs informed the petitioner that the assessment was accepted without protest and no request for a speaking order was received within the prescribed time. The petitioner was advised that the assessment order itself was appealable, and the refund claim could not be entertained without appealing the assessment.

Legal Precedents Affecting the Refund Claim Process:
The petitioner relied on the judgments in Aman Medical Products Ltd. v. Commissioner of Customs, Delhi, and UOI v. Micromax Informatics Ltd., which allowed refund claims without appealing the assessment order. However, the Supreme Court's recent judgment in ITC Ltd. v. Commissioner of Central Excise, Kolkata IV clarified that without challenging the assessment order, a refund claim is not maintainable. The Supreme Court reiterated the principles from Flock India Ltd. and Priya Blue Industries Ltd., emphasizing that an order of assessment, even if self-assessed, is appealable, and a refund claim cannot be maintained without modifying the assessment order through an appeal.

Petitioner's Remedy in Light of Recent Supreme Court Judgment:
Given the Supreme Court's ruling, the petitioner's refund claim could only be entertained if the assessment of the Bills of Entry was reversed on appeal. The petitioner expressed concern about being rendered remediless due to the change in legal interpretation and the potential time-barred status of any appeal against the assessment order.

Court's Decision:
The court acknowledged the petitioner's predicament and directed that if the petitioner prefers an appeal against the assessment of the Bills of Entry, the respondents should decide the same in accordance with law. The writ petition was disposed of with these observations, allowing the petitioner to pursue the appeal process.

Conclusion:
The judgment reinforces the necessity of appealing the assessment order before claiming a refund and aligns with the Supreme Court's clarification on the matter. The petitioner was granted the opportunity to appeal the assessment, ensuring compliance with legal procedures for refund claims.

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