2024 (7) TMI 202 - AT - Customs

Appealability of assessments - Refund of excess payment of customs duty - rejection on the ground that the claims were finalised by the Superintendent, Vadiner, who is not the proper officer - failure to produce the document evidencing that they have not passed on the incidence of duty to its buyers - HELD THAT - The peculiar facts of the present case are that on remand by the Commissioner (Appeals) on 31.03.2011, final re-assessment order dated 02.04.2013 was passed by the Assistant Commissioner. The amount paid in excess by the appellant was finally re-assessed and, therefore, the refund was allowed in consonance to the amount so assessed by the Adjudicating Authority. The refund sanctioning authority could not have gone beyond the assessment order and hence, there was no error in the order dated 16.09.2013 rejecting the refund of Rs.77,36,325/- as it was not part of the final re-assessment order. If the appellant had any grievance against the final re-assessment order, the proper remedy would have been to have challenged the same and get the final reassessed amount modified, however, as observed in Mafatlal Industries 1996 (12) TMI 50 - SUPREME COURT , the assessee would be liable to file an application under Section 27 of the Act and the provisions of the limitation period and the principle of unjust enrichment would be applicable. The appellant is, therefore, not entitle to the refund as claimed and the same have been rightly rejected by the Authorities below. Thus, all assessments, including self assessments are appealable and, therefore, unless the same is modified, no refund could be sanctioned so as to alter the assessment on the principle that refund proceedings are in the nature of execution proceedings and it is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. There are no merit in this appeal - appeal dismissed.

Issues Involved:
1. Rejection of refund claim of Rs. 77,36,325/-.
2. Validity of the final re-assessment order.
3. Applicability of Section 27 of the Customs Act, 1962.
4. Requirement of filing a refund application.
5. Principle of unjust enrichment.

Detailed Analysis:

1. Rejection of Refund Claim of Rs. 77,36,325/-:
The appellant's refund claim of Rs. 77,36,325/- was rejected by the Assistant Commissioner on the grounds that the claims were finalized by an officer who was not the proper officer and the appellant failed to produce documents evidencing that they had not passed on the incidence of duty to their buyers. The Commissioner (Appeals) set aside the assessment order and directed the claims to be reconsidered. Upon reconsideration, the Assistant Commissioner sanctioned Rs. 1,25,74,088/- and rejected the balance amount of Rs. 77,36,325/- as the appellant did not submit the necessary amendment letter at the time of the initial refund claims.

2. Validity of the Final Re-assessment Order:
The final re-assessment order dated 02.04.2013 specified the refund amount as Rs. 1,25,74,088/-. The appellant's claim for an additional amount of Rs. 77,36,325/- was rejected as it was not part of the final re-assessment order. The Tribunal held that the refund sanctioning authority could not go beyond the final re-assessment order. If the appellant had any grievance, they should have challenged the final re-assessment order to get the amount modified.

3. Applicability of Section 27 of the Customs Act, 1962:
The Tribunal noted that under Section 18 of the Customs Act, any refund arising out of the final assessment should be allowed without any claim or application. However, in the present case, the refund claim was independent of the final assessment, and thus, Section 27 was applicable. The Tribunal referred to the Supreme Court's decision in Mafatlal Industries Ltd., which held that independent refund claims after final assessment are governed by Section 27.

4. Requirement of Filing a Refund Application:
The appellant argued that under provisional assessment, there is no requirement to file a refund application. However, the Tribunal cited the decision in Mafatlal Industries Ltd., which clarified that if an independent refund claim is filed after final assessment, it must comply with Section 27, including the limitation period and the principle of unjust enrichment.

5. Principle of Unjust Enrichment:
The Tribunal held that the appellant did not provide sufficient evidence to prove that the incidence of duty had not been passed on to the buyers. The principle of unjust enrichment, therefore, applied, and the refund claim was rightly rejected.

Conclusion:
The Tribunal concluded that the final re-assessment order had attained finality, and the refund could only be ordered within the parameters of that order. The appellant's claim for an additional amount was not supported by the final re-assessment order and thus required compliance with Section 27. The appeal was rejected, affirming the decisions of the lower authorities. The Tribunal's decision was guided by precedents from the Supreme Court and High Courts, emphasizing the need for proper procedural compliance and the principle of unjust enrichment.

Order Pronounced on 28th June, 2024: The appeal was dismissed, and the rejection of the refund claim of Rs. 77,36,325/- was upheld.

← Previous Next →