2016 (7) TMI 483 - AT - Customs

Claim of refund of duty paid in excess whereas the goods were entitled for concessional rate of duty - refund was rejected on the ground that appellant is not entitled to grant of refund of the excess duty paid unless he had filed an appeal against the order, by which he had deposited the duty on filling of the Bill of Entry. - Held that - non-filing of the appeal against the assessed bill of entry does not deprive the appellant to file its claim for refund under Section 27 of the Customs Act, 1962 - we allow the appeal by way of remand upholding that the appellant is entitled to refund claim under Section 27 of the Customs Act, 1962 as it provides for claim of refund by any person, who has borne the duty. We further hold that the refund claim was made within the limitation period of six months. We remand the matter to the adjudicating authority for the limited purposes of examining the issue of unjust-enrichment. - Decided in favor of appellant.

Summary

Issues:
Whether an assessee who pays higher duty by inadvertence is entitled to a refund of the excess duty paid without filing an appeal against the order, and the applicability of Notification No. 21/2002 for concessional rate of duty.

Analysis:
The appellant-importer filed a Bill of Entry for clearance of goods under a specific duty rate but later realized they were entitled to a concessional rate of duty under Notification No. 21/2002. The appellant sought a refund of the excess duty paid, but the claim was rejected by the Asstt. Commissioner citing the requirement to appeal against the assessment before filing a refund claim, as per Board's Circular No. 24/2004. The Commissioner (Appeals) also rejected the appeal, relying on previous Supreme Court rulings.

The Tribunal analyzed the issue and referred to the ruling of the Delhi High Court in Aman Medical Products Ltd. vs. Commissioner of Customs, Delhi. The High Court clarified that duty paid can be refunded under Section 27 of the Customs Act even without an assessment order if paid in ignorance of a notification allowing a concessional rate of duty. The Tribunal distinguished previous cases where assessment orders existed, stating that in the absence of such orders, the right to question the correctness of the order through a refund claim remains valid. Therefore, the Tribunal held that the appellant's refund claim was maintainable under Section 27 of the Customs Act.

Consequently, the Tribunal allowed the appeal by remanding the matter to the original authority for further examination, upholding the appellant's entitlement to a refund claim under Section 27 of the Customs Act within the limitation period of six months. The Tribunal emphasized the need to assess the issue of unjust enrichment before processing the refund claim.

In conclusion, the Tribunal allowed the appeal by way of remand, following the precedent set by the Delhi High Court, and directed the adjudicating authority to examine the refund claim in accordance with the law and provide the appellant with a fair opportunity.