2019 (5) TMI 882 - HC - Customs

Refund of excess duty paid - assessment of the proper value of the units and consignment imported not made - amendment of Bill of Lading is called for to reflect any change in Unit price but is not effected to - HELD THAT - Prior to 2011, when Section 27 was amended, a person was entitled to seek refund only in a situation where the claim arose out of the payment made by him in pursuance of an order of assessment or borne by him in pursuance of an order of assessment - Subsequent to amendment of Section 27, the provisions of Section 27 have been considerably widened, as a result of which, after 08.04.2011, a claim for refund would lie in respect of any amount paid or borne by a person. The sole ground on which the refund application has been returned is that the Bill of Entry submitted by the petitioner has not been re-assessed by the concerned assessing officer. This observation falls in the face of the position that the passing of an order of assessment is not within the control of an assessee. It is for the Assessing Officer to take up a Bill of Lading and frame an assessment thereon. If the statement in the impugned letter is to be carried its logical conclusion, no refund may be sought by any person unless an order of assessment is made, which itself is only at the discretion of an Assessing Officer. Therefore, the statement is clearly contrary to law and untenable. The Assistant Commissioner ought not to have insisted upon an order of assessement having been passed. The petitioner is permitted to re-submit its application for refund within a period of two(2) weeks from today. The said applications will be considered by the respondents on merits and in accordance with law - petition allowed.

Summary

Issues:
Claim for refund of excess duty paid due to an error in the invoice.

Analysis:
The petitioner imported goods with an erroneous unit price, resulting in excess duty payment. The correct duty amount was &8377; 30,264, while &8377; 20,85,274 was paid initially. The overseas supplier confirmed the error and a refund of &8377; 20,55,010 was claimed. The refund application was filed, and all necessary documents were submitted for assessment. However, no assessment order had been passed. The impugned order stated that a refund would only arise if the Bill of Entry was lawfully modified or revised. The petitioner argued that Section 27 of the Customs Act allows for a refund claim in such cases.

The respondent relied on a Supreme Court judgment pre-2011, stating that a refund could only be claimed after an order of assessment. However, post-amendment in 2011, Section 27 allows for refund claims for any amount paid or borne by a person. The impugned order was found to be contrary to law as it insisted on an order of assessment being passed before seeking a refund. The petitioner was permitted to re-submit the refund application for proper consideration.

The judgment emphasized that the assessing officer's satisfaction is crucial for granting a refund under Section 27(2). The reliance on Section 149 for document amendment was deemed irrelevant, as the refund application was under Section 27. The court allowed the writ petition, quashed the impugned letter, and directed the petitioner to resubmit the refund application within two weeks for proper assessment.