2019 (6) TMI 334 - AT - Customs

Refund of Customs duty paid - denial of refund on the ground that the assessments in the bills of entry in question were final and the importer has not challenged the assessment order - HELD THAT - The bills of entry in question have all classified the goods in question under chapter heading 4403990 and therefore no additional duty of customs was payable on them. However, this notification was not mentioned by the appellant and therefore no exemption was given to the appellant. This is a clerical error in the bills of entry but not by the officer but by the appellant themselves. In case of processing of bill of entry in customs EDI where the bill of entry which was sent to the officer for assessment, the officer can re-assess or correct the bills of entry. In such a case the officer should have corrected the bills of entry by giving the benefit of an unconditional exemption notification otherwise applicable to the Bill of Entry in question. If such was not the case, then the clerical error of not extending the benefit of an exemption notification (that not claimed by the appellant) can be corrected under Section 154 by the successor of the officer. Two Bills of Entry where no assessment at all was done by the officer but the goods were cleared from the customs EDI systems automatically - HELD THAT - The refund can be examined and sanctioned on merit after considering the eligibility of the appellant to the exemption notification in respect of bills of entry - The matter is accordingly remanded back to the original authority to consider the eligibility of the appellant to exemption notification and decide the refund application accordingly. Appeal allowed by way of remand.

Summary

Issues Involved:
1. Refund claim rejection based on final assessment without challenging the assessment order.
2. Applicability of Section 154 of the Customs Act, 1962 for rectification of clerical errors in Bills of Entry.
3. Distinction between cases with final assessment and those without any assessment under the Risk Management System.
4. Eligibility for refund based on clerical errors in Bills of Entry.

Analysis:

Issue 1: Refund claim rejection based on final assessment without challenging the assessment order:
The appellant imported logs under Customs Tariff Heading 440399 and paid customs duty. Subsequently, they realized an exemption notification applied and filed refund claims for additional duty. The Assistant Commissioner rejected the claim citing final assessments and non-challenge of assessment orders. The First Appellate Authority upheld this decision based on the Priya Blue case law. The Tribunal noted the necessity of challenging assessment orders before filing refund claims, as per legal precedents. However, it differentiated cases where no assessment was conducted at all, allowing refunds in such instances.

Issue 2: Applicability of Section 154 of the Customs Act, 1962 for rectification of clerical errors in Bills of Entry:
The appellant argued for rectification under Section 154 due to their failure to mention the exemption notification in Bills of Entry. The Tribunal clarified that clerical errors by the appellant, not the officer, can be rectified under this section. It emphasized that such errors, if not related to assessments, fall outside the scope of the Priya Blue case law and are eligible for refunds.

Issue 3: Distinction between cases with final assessment and those without any assessment under the Risk Management System:
The Tribunal highlighted the distinction between cases with final assessments and those cleared automatically under the Risk Management System without any assessment by an officer. It referenced the Aman Medical Products case to support the view that in cases without any assessment order, refunds can be examined and sanctioned based on merit.

Issue 4: Eligibility for refund based on clerical errors in Bills of Entry:
The Tribunal acknowledged the clerical error in not mentioning the exemption notification in the Bills of Entry, attributing it to the appellant. It emphasized that such errors, not requiring re-assessment but correction of clerical mistakes, can be rectified by the successor officer under Section 154. The Tribunal remanded the matter to the original authority to consider the appellant's eligibility for the exemption notification and decide the refund application accordingly, allowing the appeal by way of remand.

In conclusion, the Tribunal's judgment clarified the criteria for refund claims based on assessment challenges, rectification of clerical errors, distinctions in assessment processes, and eligibility for refunds in cases of clerical mistakes in Bills of Entry.