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TMI Blog2019 (2) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... and the bill of entry was assessed to tariff rate of duty of 10% instead of the concessional rate of 5% because they entered the wrong serial number in the exemption notification but they paid duty accordingly. They approached the customs officers asking them to correct the mistake in their bill of entry under Section 154 of the Customs Act and got no response. Therefore, they filed a refund claim within the period along with certificate from the Chartered Accountant to the effect there was no unjust enrichment in their case. The Joint Commissioner of Customs in his Order-in-Original rejected the refund claim holding that the assessment was completed and the assessment has been not challenged by the appellants in this case. He relied upon the case of Priya Blue Industries Ltd., [2004 (172) ELT 145 (S.C.)] Flock (India) Pvt. Ltd., [2000 (120) ELT 285 (S.C.)]. In his order, he explained the procedure followed in clearing the bills of entry. As per existing procedure, in terms of Section 17(1) of the Customs Act, assessment has to be done by the importer/exporter of the goods. However, proper officer can require the importer or exporter to produce any documents and any information an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny decision or order passed by them". In this case no order was passed any officer. Therefore, the officers have not corrected the bill of entry as Section 154 does not authorize them to do so unless it is an order or decision made by them or their predecessors. 5. Relying on the judgement of the Hon'ble Supreme Court in the case of Priya Blue Industries and Folk (India) Pvt. Ltd, the lower authority rejected the refund claim filed by the respondent on the ground that they had not challenged the assessment order. 6. On an appeal, the First Appellate Authority held as follows: I find that the Revenue did not consider the request of the appellants for correction of the mistake as envisaged under Section 154 of Central Excise Act, 1962. "Instead the appellants were denied of the relief on the frivolous grounds of assessment by the system and not by the assessment officer and not challenge of the assessment order etc." The First Appellate Authority allowed the appeal of the respondent herein or in correction of the clerical mistakes in the impugned bill of entry with consequential reliefs as per the provisions of Section 154 of the Customs Act. 7. The appeal of the Revenue is on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on Risk Management System (RMS) as to which Bill of Entry must be reassessed by the officers. In all cases, where the system does not select bill of entry for reassessment (commonly called facilitated bills of entry) the assessment made by the importer or exporter is accepted and the goods are cleared. The assessing officers will not even be aware of the existence of the bill of entry or it is assessment. Therefore, there is no possibility of the officer even assessing/reassessing the bills of entry. This is one such case. Therefore, 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. 10. The next question is what relief is available to the assessee who admittedly made a mistake and paid excess duty. If the mistake is discovered before paying the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s even without filing an appeal. 6. We are unable to accept this submission. Just such a contention has been negative by this court in Flock (India)'s case (supra). Once an order of assessment is passed the duty would be payable as per that order. Unless that order of assessment has been reviewed under Section 28 and/or modified in an appeal that order stands. So long as the order of assessment stands the duty would be payable as per that order of assessment. A refund claim is not an appeal proceeding. The officer considering a refund claim cannot sit in appeal over an assessment made by a competent officer. The officer considering the refund claim cannot also review an assessment order." The relevant portion of the judgment in the case of Flock (INDIA) Pvt. Ltd., which is as follows: "6. At the relevant time the provision for claim for refund of duty was made in Rule 11. The said Rule reads as follows : "Rule 11 Claim for refund of duty. - (1) Any person claiming refund of any duty paid by him may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the date of payment of duty : Provided, that the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. 8. From the aforementioned provisions of the Act the position is clear that any order passed by an authority under the Act is appealable to the Collector (Appeals) and a further appeal to the appellate tribunal against the order of the Collector (Appeals) is also provided in section 35. The hierarchy of authorities for adjudication and determination of a matter relevant for charging the excise duty is for a purpose. It is not an empty formality. Classification of the goods manufactured by an assessee is important for the purpose of levy and collection of excise duty. Under Rule 173B every assessee is required to file with the proper officer a list of goods manufactured by him for approval and the proper officer shall after such inquiry as he deems fit approve the list with such modifications as are considered necessary and all clearances are to be made only thereafter. 9. A right of appeal is a creature of the statute. It is a substantive right. An order of the appellate authority is binding on the lower authority who is duty bound to implement the order of the superior authority. Refusal to carry out the direction will amount to denial of justice and destructive of one of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en held that in such cases Section 154 can be invoked by the officers and refund granted under Section 27 as this correction does not amount to reassessment. As a consequence of such correction, if any refund is payable, it could also be paid. 13. To some up, there are three types of cases where refund can arise in a customs case. i) where an assessment has been made by an officer and the person claiming the refund does not agree with the assessment. In such cases, the case laws of the Hon'ble Supreme Court in the case of Priya Blue Industries and Flock (India) Pvt. Ltd., (supra) squarely apply and the refund cannot be sanctioned unless the assessment order itself is challenged and returned by superior appellate authority. ii) cases where assessment is not in dispute but there are only clerical or arithmetical errors in the assessment as a result of which excess duty has been paid. Such mistakes in assessment can be corrected by the officers under Section 154 of the Customs Act. If any refund arises as a consequence the same can be sanctioned as has been held by the Tribunal in a number of cases. iii) cases where the refund arises but there is no order of the assessment by any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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