2019 (9) TMI 29 - AT - Customs

Refund claim - absence of assessment of duty - time limitation - section 27 of CA - assessment of duty - HELD THAT - There are three periods in the of the Customs Law and the procedures. Initially, as per Section 17 of the Customs Act, the officer was required to assess the duties of customs based on the declaration made by the appellant in the bill of entry and they were doing so. When an officer has assessed the duty in pursuance of which any amount has been paid by the importer, they could file a refund claim under Section 27 of the Customs Act, 1962. The question before the Hon ble Apex Court in the case of PRIYA BLUE INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) 2004 (9) TMI 105 - SUPREME COURT , was whether the importer needs to challenge the order of assessment before filing a refund claim or they could file a refund claim and the officer deciding the refund claim can determine if the assessment was done correctly and sanction the refund - The Hon ble Apex Court held that an officer sanctioning refund under Section 27 without modifying the assessment order would amount to the refund sanctioning officer modifying order of assessment of the assessing officer which is not permissible. An order of assessment of the assessing officer can only be set aside or modified by the superior judicial / quasi-judicial authority. Therefore, the order of assessment needs to be challenged before a refund claim can be filed. The law has been brought in consonance with the Customs EDI system and the responsibility for assessment has been shifted from the officer to the importer themselves. The self assessment by the assessee is either accepted or in some cases the officers can reassess the duty. There is no assessment by the officer but there can be re-assessment in some cases - In most cases, the declaration by the appellant is taken as self assessment and duty is paid and goods are cleared accordingly. In such cases, there is no assessment order by any officer to be challenged. Correspondingly, Section 27 of the Customs Act was also amended and the words in pursuance of an order of assessment have been deleted. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Entitlement to refund under amended Sections 17 and 27 of the Customs Act, 1962.
2. Applicability of the Supreme Court judgment in Priya Blue Industries Ltd. to post-2011 amendments.
3. Validity of the First Appellate Authority's decision in light of amendments and subsequent High Court judgments.

Issue-wise Detailed Analysis:

1. Entitlement to Refund under Amended Sections 17 and 27 of the Customs Act, 1962:
The appellant filed a Bill of Entry for "Fresh Catalyst for FCU 11 Revamp" and paid the duty. Later, they realized that they were entitled to a reduced duty rate under an exemption notification and filed for a refund. The Assistant Commissioner sanctioned the refund, but the First Appellate Authority set aside this order, citing that the Bill of Entry was finally assessed and not challenged, making the refund application non-maintainable as per the Supreme Court's judgment in Priya Blue Industries Ltd. However, the appellant argued that post-2011 amendments to Sections 17 and 27, the system of self-assessment was introduced, eliminating the need for an officer's assessment and allowing direct refund claims without challenging the self-assessment.

2. Applicability of the Supreme Court Judgment in Priya Blue Industries Ltd. to Post-2011 Amendments:
The appellant contended that the Priya Blue judgment pertained to the pre-amendment period when assessments were done by officers. Post-2011, self-assessment by importers was introduced, and the requirement to challenge an assessment order before claiming a refund was removed. The appellant cited the High Court judgments in Aman Medical Products and Micromax Informatics Ltd., which supported the view that post-amendment, refunds could be claimed without challenging self-assessment.

3. Validity of the First Appellate Authority's Decision in Light of Amendments and Subsequent High Court Judgments:
The First Appellate Authority's decision was based on the Priya Blue judgment, ignoring the amendments to Sections 17 and 27 and subsequent High Court rulings. The Tribunal noted that post-2011, the Customs EDI system allowed clearances based on importers' declarations without an officer's assessment. The Tribunal highlighted that the High Courts of Delhi and Madras had ruled that in the absence of an officer's assessment order, there was nothing to challenge, and refunds could be granted based on self-assessment.

Conclusion:
The Tribunal concluded that the First Appellate Authority's order violated the amended provisions and the High Court judgments. It set aside the impugned order and allowed the appeal, affirming that the appellant was entitled to the refund without challenging the self-assessment. The decision emphasized that the Priya Blue judgment did not apply to the post-2011 self-assessment regime.