2019 (2) TMI 779 - AT - Customs

Refund of Customs Duty - mistake in the bills of entry committed by CHA - rectification of error in the Bills of Entry - Section 154 in the Customs Act, 1962 - case of Revenue is that section 154 of the Customs Act does not apply to the mistakes committed by the importer or CHA and the officers cannot correct such mistakes - Held that - There is no assessment in this case and no mistake has been committed clerical or arithmetical error by any officer. Admittedly, the assessee importer made a mistake by mentioning a wrong serial number of the notification and thereby paid excess duty. Their request for correction under Section 154 was correctly not accepted by the officers as plain reading of the Section does not show that the officers do not have the power to correct mistakes made by the assessee under Section 154. What relief is available to the assessee who admittedly made a mistake and paid excess duty? - Held that - If the mistake is discovered before paying the duty the importer can go to the officer and ask him to recall the bill of entry from the system and assess the bill of entry. This is done often. However, if the assessee has missed the opportunity to get the assessment corrected because the goods have already cleared there is no scope for the officers to assess the bills of entry. In such a case, the question is whether it is open for the importer to claim refund of duty under Section 27 of the Customs Act - A plain reading of the section would show that the importer or any other person can claim refund of duty under Section 27. This refund application has to be considered by the officers and the decision taken thereon - matter on remand. The appeal is disposed of by expunging the order to correct the mistake in the bills of entry under Section 154 of the Customs Act but upholding the sanction of refund.

Summary

Issues Involved:
1. Applicability of Section 154 of the Customs Act for correction of errors in the bill of entry.
2. Entitlement to refund under Section 27 of the Customs Act when no assessment order exists.

Detailed Analysis:

1. Applicability of Section 154 of the Customs Act for correction of errors in the bill of entry:

The respondent filed a bill of entry for clearance of Calcined Petroleum Coke, claiming exemption from basic customs duty under a specific notification. However, they entered the wrong serial number in the exemption notification, resulting in a higher duty rate. They sought correction of this error under Section 154 of the Customs Act, which allows for the correction of clerical or arithmetical mistakes in any decision or order passed by customs officers. The Joint Commissioner of Customs rejected this request, stating that no assessment order was passed by an officer, and thus Section 154 was not applicable. The First Appellate Authority disagreed, stating that the Revenue did not consider the request for correction under Section 154 and allowed the appeal for correction of the clerical mistake. However, the Tribunal clarified that Section 154 authorizes correction only in decisions or orders made by customs officers, and since no such order was passed in this case, the officers correctly did not accept the request for correction under Section 154.

2. Entitlement to refund under Section 27 of the Customs Act when no assessment order exists:

The respondent also filed a refund claim for the excess duty paid, which the Joint Commissioner rejected on the grounds that the assessment was not challenged. The First Appellate Authority allowed the refund, stating that there was no assessment order to challenge. The Tribunal examined the customs assessment process, noting that prior to 08.04.2011, the Customs EDI system often did not allow officers to discharge their assessment responsibilities, resulting in no formal assessment by officers. The Tribunal distinguished between three types of cases where refunds can arise:
- Cases where an assessment order exists and must be challenged for a refund.
- Cases involving clerical or arithmetical errors in assessments, correctable under Section 154.
- Cases with no assessment order, where refunds can be claimed under Section 27 without challenging an assessment order.

The Tribunal concluded that in the absence of an assessment order, the respondent was entitled to a refund under Section 27, aligning with the Delhi High Court's decision in Aman Medical Products Limited. The Tribunal expunged the order to correct the mistake under Section 154 but upheld the sanction of the refund.

Conclusion:

The appeal was disposed of by expunging the order to correct the mistake in the bill of entry under Section 154 of the Customs Act but upholding the sanction of the refund. The Tribunal recognized the respondent's entitlement to a refund under Section 27 due to the absence of an assessment order.