Refund Procedure for Self Assessment Bill of Entry - Customs - 65/2018

MINISTRY OF FINANCE DEPARTMENT OF REVENUE OFFICE OF THE COMMISSIONER OF CUSTOMS, CHENNAI-II CUSTOMS HOUSE, 60, RAJAJI SALAI, CHENNAI - 600001 Phone: 044 25230371, Fax: 044 5267778 F.No.S.Misc.02/2017-Appg. Main Ch-II Dated: 11/09/2018 PUBLIC NOTICE NO.65/2018 Sub: Refund Procedure for Self Assessment Bill of Entry-Reg It has been observed that the Refund sanctioning authority has been rejecting the refund application as 'pre-mature', wherever the applicant approaches the refund section directly, without getting the Bill of Entry re- assessed from the Assessment Group. Further, the Assessment Group is also not entertaining the re-assessment application, stating that since the applicant has not challenged the assessment, it has become final, and thus can't be re-opened relying on the Apex Court judgements rendered in the case of Priya Blue Industries Ltd [2004(172)ELT-145(SC)] and Flocks India Pvt Ltd (2000(120)ELT-285(SC)]. Some appeals filed against such stand taken by the Refund authority as, well as the Assessment authority, have recently been remanded back to the Refund authority for re-examination, in view of the judgement rendered in M / s Micromax Informatics Limited case. In the case of Micromax Informatics Ltd vs Principal Commissioner of Customs, ACC, Chennai [2017(358)ELT-38(Mad.)], Hon'ble High Court made a comparative analysis of the amended and unamended Section 17 and Section 27 of the Customs Act 1962 after enactment of the Finance Act 2011 w.e.f. 08.04.2011. It has been observed by the Hon'ble Court that post: 08.04.2011, for refund under Section 27, the conditionality of payment having been made pursuant to an order of assessment does not exist, since the phrase in pursuance of an order of assessment , has beer deleted. Accordingly, the Hon'ble Court has held that, after 8th April 2011, as long as Customs duty or interest has been paid or borne by a person, a claim fox refund made by such person under Section 27(1) of the Act, will have to be entertained and an order is required to be passed thereon by the authority concerned. In light of the above judgement, the previous situation as laid down in the Priya Blue judgement [2004(172)ELT-145(SC)] that the eventuality of refund arises only after re-assessment, is required to be reviewed. Apex court in Priya Blue judgement and Flock India judgement had also stated that refund claim is not maintainable if appeal has not been filed against the assessment order done by the proper officer. Thus, in pre 08.04.2011 regime, refund was to be filed in pursuance of the order of assessment or upon any favourable order after challenging the order of assessment. However, post 08.04.2011, wherever there is no lis. between importer and the department, refund can be filed directly. For effective implementation of the order of the Hon'ble Court, the procedure for processing of refund claims is required to be re-visited and streamlined. (1) Wherever assessment under Section: 17 (4) of the Customs Act 1962 has been done contrary to the declaration by the. importer,. the proper officer is required to issue speaking order, which is appealable due to existence of lis (dispute) between the department and the importer. (2) Due to the paradigm shift after introduction of self assessment and amendment of section 17 and 27 w.e.f. 08.04.2011, question of challenging the assessment would not arise in normal course, since lis between the department. and the importer does not exist and / or since the assessment has not. been done by the proper officer. In such cases, the importer can directly apply for refund. (3) All the changes in the assessment should be recorded in the ICES. Accordingly, after receipt of the application,: the Refund section should forward the application to the Assessment Group for deciding on the assessment and executing the same in the ICES. The Assessment Group will examine the application on merits and if found to be permissible for re-assessment, execute' the same in the ICES and inform the Refund section 'within 15 days. However, if the re-assessment is found:! not to be permissible on merits, the Assessment Group will record its reasons and forward the same to the Refund Section within 15 days. The Refund section will examine the reply, from the Assessment Group and decide on the refund application independently. AC - Refund shall, then after, pass the Order within three months, as prescribed under Section 27 of the Customs Act. (4) Before forwarding g the application to the Assessment, Group, the Refund section should firstly analyze time limitation fatter, as stated in the Section 27 of the Customs Act. If the application is barred by time limit, it will suo moto dispose the application without referring the same to the Assessment Group. (5) The Refund Section as well as Assessment Group shall maintain a separate transit register for such applications. so that the time limit of 15 days is properly monitored and strictly adhered. Any delay in reply from the Assessment. Group in replying to the reference, should be brought to the notice of the senior officers.by the Refund section. (6) Wherever lis does not exists between the department and the importer, the importer can opt for approaching the assessment group for re-assessment prior to his application to. the refund section. For the ease of doing business and trade facilitation; this is permitted. The assessment group may take up such application for further examination. However, since this is merely an extended procedural facility under Section 27 of the Customs Act for trade facilitation, no such application beyond one year of payment of duty should be entertained by the Assessment groups. It is. further clarified that the time barring provision for application of refund shall apply and that, such application to the assessment group would not be a substitute to the refund application required to be made before the refund section. It ' is also clarified that re-assessment made by the group may not necessarily result into refund, since the refund section shall examine other mandatory aspects like unjust enrichment, etc. Difficulty, if any, in the implementation of this order, may be brought to the Notice of the undersigned. R. Srinivasa Naik Commissioner Chennai Customs - Import