2007 (8) TMI 364 - AT - Customs

Maintainability of Refund Claim - Held that - A refund claim is not maintainable unless the assessment order in pursuance of which the duty paid is challenged and modified/set aside.

Summary

Issues involved:
Whether a refund can be claimed without challenging the assessment order.

Analysis:
The judgment delves into the issue of whether a refund can be claimed without challenging the assessment order. The Tribunal notes conflicting decisions regarding this matter. One set of decisions, citing cases like Collector of Central Excise v. Flock (India) Pvt. Ltd. and Priya Blue Industries Ltd. v. Commissioner of Customs, holds that a refund claim is not maintainable if the assessment order is not challenged and has become final. On the other hand, decisions like Karnataka Power Corporation Ltd. v. Commissioner of Customs and Shri Vallabh Glass Works Ltd. v. Union of India support the view that a refund claim can be maintained without challenging the assessment order. The Tribunal agrees with the revenue's argument, highlighting the Supreme Court decisions in Priya Blue Industries and Flock (India) Pvt. Ltd., which clearly state that a refund claim cannot be made without challenging the assessment order. The Tribunal also emphasizes that larger bench decisions on different legal points are not applicable in this context.

The respondents argue that Section 27 of the Customs Act allows for a refund claim without challenging the assessment order. However, the Tribunal refers to the Supreme Court decisions in Priya Blue and Flock (India) Pvt. Ltd. to negate this argument. The Tribunal emphasizes that once an assessment order is passed, duty is payable as per that order unless reviewed or modified through appeal. The Tribunal also cites circulars issued by the Board, noting that these circulars cannot override the Supreme Court decisions on refund claims. The Tribunal further references the Supreme Court's observation that a refund of duty cannot be claimed unless the order under which the duty was paid is set aside according to law.

In conclusion, the Tribunal rules that a refund claim is not maintainable unless the assessment order, in pursuance of which the duty was paid, is challenged and modified or set aside. The judgment provides a detailed analysis of legal precedents and statutory provisions to support this ruling, emphasizing the importance of challenging assessment orders before claiming refunds.

(Pronounced in Court on 9-8-2007)