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TMI Blog2019 (9) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... significance is that an entry made in the bill of entry has been held to be an order of assessment passed by the Assessing Officer. Thus, the endorsement made on the bill of entry is an order of assessment. It cannot be said that there is no order of assessment passed in such a case. When there is no lis, speaking order is not required to be passed in across the counter affair''. Procedure of assessment of duty as prevailed before the amendment of the Act prior to the amendment made in section 17(1) by the Finance Act of 2011 - HELD THAT:- No doubt about it that the expression which was earlier used in Section 27(1)(i) that in pursuance of an order of assessment has been deleted from the amended provision of Section 27 due to introduction of provision as to self-assessment. However, as self-assessment is nonetheless an order of assessment, no difference is made by deletion of aforesaid expression as no separate reasoned assessment order is required to be passed in the case of self-assessment. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations for refund were not maintainable - Appeal dismissed. - CIVIL APPEAL NO.2960 OF 2010 CIVIL APPEAL NO.5878 OF 2011 CIVIL APPEAL NO.310 OF 2011 CIVIL APPEAL NOS.4432-4434 OF 2011 CIVIL APPEAL NO.6407 OF 2011 CIVIL APPEAL NOS.15751582 OF 2012 CIVIL APPEAL NO.1585 OF 2012 CIVIL APPEAL NO.1571 OF 2012 CIVIL APPEAL NO.5490 OF 2011 CIVIL APPEAL NO.5491 OF 2011 CIVIL APPEAL NO.5489 OF 2011 CIVIL APPEAL NO.6054 OF 2011 CIVIL APPEAL NO.7710 OF 2014 CIVIL APPEAL NO.5960 OF 2016 CIVIL APPEAL NO.96 OF 2016 CIVIL APPEAL NOS. 738486 OF 2019 (@ SPECIAL LEAVE PETITION (C) NOS.1611416116 OF 2017) CIVIL APPEAL NO. 7387 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO.25193 OF 2016) CIVIL APPEAL NO. 7388 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO.26530 OF 2016) CIVIL APPEAL NO. 20852 OF 2017 CIVIL APPEAL NO. 7389 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO.4294 OF 2017) CIVIL APPEAL NO. 7391 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO.6269 OF 2017) CIVIL APPEAL NO. 7392 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO.15175 OF 2017) CIVIL APPEAL NO.18765 OF 2017 CIVIL APPEAL NO. 7393 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO.31561 OF 2017) CIVIL APPEAL NOS. 739496 OF 2019 (@ SPECIAL LEAVE PETITION (C) NOS.50405042 OF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 27(2) determining if any duty or interest as claimed is refundable to the applicant. It has been opined that under Section 27 of the Act as amended, it is not open to an authority to refuse to consider the application for refund only because no appeal has been filed against the assessment order, if there is one. 6. The High court has further opined that although under Section 27(2) of the Act, the word assessment includes a self-assessment, the clearance of the goods upon filing of the bills of entry and payment of duty is not per se an assessment order in the context of Section 27(1) (i) as it stood prior to 8.4.2011, particularly, if such duty has not been paid under protest. In any event, after 8.4.2011, as long as customs duty or interest has been borne by a person, a claim for refund made by such person under Section 27(1) of the Act will have to be entertained and an order passed thereon by the authority concerned, even where an order of assessment may not have been reviewed or modified in appeal. Reliance has been placed on the case of Aman Medical Products Limited v. Commissioner of Customs, Delhi, 2010 (250) ELT 30 (Del). 7. The facts of the case of ITC Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice was issued as to why the said claim be not rejected to which a reply was filed. The assessment committee rejected the said claim. The Commissioner of Appeals dismissed the appeal. Thereafter, successive appeal was preferred before the Tribunal. The Tribunal has rejected the refund claim of the appellant. Hence, the appeal has been preferred under section 35(b) of the 1944 Act. 12. In the case of Union of India Ors. v. Micromax Informatics Ltd., the respondents (i.e. Micromax Informatics Ltd.) had imported mobile handsets including cellular phones during the period 30.07.2014 to 29.8.2014. At the time of customs clearance, they paid Additional Customs Duty (CVD) under Section 3(1) of the Customs Tariff Act, 1975 at the rate of 6 %. In all, the imports bills of entry were selfassessed by the respondents in terms of the Self-assessment Scheme under section 17 of the Act and were thus finally assessed. This Court in M/s. SRF v. Commissioner of Customs, Chennai 2015 [318] ELT 607 (SC) held that for quantification of CVD in case of an article that has been imported, it has to be presumed that the said imported article has been manufactured in India and then the amount of exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicated on merits. The respondent Aman Medical Products Ltd filed a writ petition before the High Court. The writ petition has been allowed. 14. Shri P. Chidambaram, learned senior counsel has taken us through the definition of the assessment as prevailed under the 1962 Act and the amended definition under the Act, assessment w.e.f. 8.4.2011, Finance Act, 2011, Section 17 and Section 27 as amended by the Finance Act, 2011. It was urged by learned senior counsel that prior to the amendment by the Finance Act, 2011, the scheme of assessment under section 17 of the Customs Act was such that once a bill of entry was filed, examination and testing of the imported goods were done by the proper officer. Thereafter, an order of assessment was passed after the physical examination. Accordingly, section 27 of the Customs Act provided that claim for refund to be made by any person who had (a) paid duty in pursuance of an order of assessment or (b) a person who had borne the duty. Earlier, there was a necessity for an order of assessment by a proper officer under section 17 of the Customs Act. After the amendment to the Act in 2011, there is no need to get the assessment of bill of exchange do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid the duty or by any person who has borne the duty. Earlier refund could be claimed by the person who has paid the duty. Under the post amendment provision the words in pursuance to the order of assessment have been deleted and a refund claim is maintainable by the assessee in case duty has been paid by him . The legislative intent is clear. Now the order of assessment has been made irrelevant and a reassessment to an order is no longer a prerequisite for maintaining a refund claim. Now under the scheme of self-assessment, there would be no order of assessment by the proper officer. 17. It was further urged on behalf of the assessee that section 27 cannot be rendered otiose or redundant. Section 27 does not contain any stipulation which may suggest that refunds can be filed only after the Bill of Entry has been appealed against. In the absence of such a statutory condition, a restriction on refund claim cannot be imported into the statute. Taxing statute has to be strictly interpreted and there is no room to infer any intendment thereof as held by this Court in Commissioner of Wealth Tax, Gujarat III Ahmedabad v. Ellis Bridge Gymkhana, (1998) 1 SCC 384. Reliance has also been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification cannot be claimed. An application for refund is not maintainable in view of the law laid down by this Court in Flock (India) Pvt. Ltd. (supra) and Priya Blue Industries (supra). Once the self-assessment/ assessment attains finality and has not been questioned, it cannot be reopened at any point of time. The refund claim is not an appellate 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. Even after the amendment is made in 2011, the conditionality of payment having been made pursuant to an order of assessment continue to exist. As the self-assessment of bills of entry is an order of assessment per se, unless the order of assessment passed under section 2(2) of the Act is appealed before Commissioner of Appeals for modification no claim for refund can be entertained. The provision of section 128 cannot be rendered otiose. The amendment has been made in order to simplify the procedure but the legal effect of the self-assessment is that of assessment. While processing self-assessment some exercise has to be done. Once it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of assessing duty under subsection (2), the proper officer may require the importer, exporter or any other person to produce any contract, broker s note, policy of insurance, catalogue or other document whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained, and to furnish any information required for such ascertainment which is in his power to produce or furnish, and thereupon the importer, exporter or such other person shall produce such document and furnish such information. (4) Notwithstanding anything contained in this section, imported goods or export goods may, prior to the examination or testing thereof, be permitted by the proper officer to be assessed to duty on the basis of the statements made in the entry relating thereto and the documents produced and the information furnished under subsection (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been passed on reassessment, the proper officer may audit the assessment of duty of the imported goods or export goods at his office or at the premises of the importer or exporter, as may be expedient, in such manner as may be prescribed. Explanation.-For the removal of doubts, it is hereby declared that in cases where an importer has entered any imported goods under section 46 or an exporter has entered any export goods under section 50 before the date on which the Finance Bill, 2011 receives the assent of the President, such imported goods or export goods shall continue to be governed by the provisions of section 17 as it stood immediately before the date on which such assent is received.] (emphasis supplied) 26. Section 27 deals with a claim for refund of duty. Provision of section 27 which prevailed before amendment by Finance Act, 2011 is extracted hereunder: 27. (1) Any person claiming refund of any duty- (i) paid by him in pursuance of an order of assessment; or (ii) borne by him, may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs (a) in the case of any import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act as amended by Finance Act, 2011 is extracted hereunder: 27. Claim for refund of duty. (1) Any person claiming refund of any duty or interest, (a) paid by him; or (b) borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest: Provided that where an application for refund has been made before the date on which the Finance Bill, 2011 receives the assent of the President, such application shall be deemed to have been made under subsection (1), as it stood before the date on which the Finance Bill, 2011 receives the assent of the President and the same shall be dealt with in accordance with the provisions of subsection (2): Provided further that the limitation of one year shall not apply where any duty or interest has been paid under protest. Provided also that where the amount of refund claimed is less than rupees one hundred, the same shall not be refunded. Explanation. For the purposes of this subsection, the date of payment of duty or interest'' in relation to a perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (d) the export duty as specified in section 26; (e) drawback of duty payable under sections 74 and 75; (f) the duty and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify: (g) the duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made where (i) such excess payment of duty is evident from the bill of entry in the case of self-assessed bill of entry; or (ii) the duty actually payable is reflected in the reassessed bill of entry in the case of reassessment. Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty and interest, if any, paid on such duty has not been passed on by the persons concerned to any other person. (3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal , the National Tax Tribunal or any Court or in any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson chargeable with the duty or interest, may pay before service of notice under clause (a) on the basis of, (i) his own ascertainment of such duty; or (ii) the duty ascertained by the proper officer, the amount of duty along with the interest payable thereon under section 28AA or the amount of interest which has not been so paid or partpaid: Provided that the proper officer shall not serve such show cause notice, where the amount involved is less than rupees one hundred. (emphasis supplied) 29. The first question for consideration is whether in the case of self-assessment without passing a speaking order, it can be termed to be an order of self-assessment. It was urged on behalf of the assesses that there is no application of mind and merely an endorsement is made by the authorities concerned on the bill of entry which cannot be said to be an order much less a speaking order. 30. In Escorts Ltd. v. Union of India Ors. (1994) Supp. 3 SCC 86 the question arose for consideration as to the Bill of Entry classifying the imported goods under a certain tariff item and paying the duty thereon. This Court held that in such a case signing of the bill of entry itself amounted to passing an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court in Madras Rubber Factory Ltd. v. Union of India (1976) 2 SCC 255. (emphasis supplied) 31. It is apparent from the aforesaid discussion that the endorsement made on the bill of entry is an order of assessment. It cannot be said that there is no order of assessment passed in such a case. When there is no lis, speaking order is not required to be passed in across the counter affair . 32. Coming to the procedure of assessment of duty as prevailed before the amendment of the Act prior to the amendment made in section 17(1) by the Finance Act of 2011, the imported goods or exported goods were required to be examined and tested by the proper officer. After such examination, he had to make an assessment of the duty, if any, leviable on these goods. Under subsection (3) of section 17, the proper officer was authorized to require the importer, exporter or any other person to produce any contract, broker's note or any other document as specified in the proviso and to furnish any required information. Notwithstanding that the statements made in the bill of entry relating thereto and the documents produced and the information furnished under subsection (3); but if it was found subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary by the proper officer. 35. Section 27 of the Act prior to amendment by Finance Act, 2011 provided for refund procedure. Any person could claim a refund of duty and interest if any paid on such duty. Refund of duty and interest if any paid pursuant to the order of assessment or borne by him, may make an application for refund of such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs within one year in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital. In any other case before the expiry of six months from the date of payment of duty and interest. He has to further satisfy that he has not passed on such liability to any other person. The limitation of one year or six months shall not apply where any duty and interest has been paid under protest. It is made clear by the second proviso to section 27 that in case of refund becomes necessary as a consequence of judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year or six months shall commence from the date of such judgment, dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Flock (India) Pvt. Ltd. 2000 (120) ELT 285 (SC)= (2000) 6 SCC 650, the question which came up for consideration before this Court was nonchallenge of an appealable order where the adjudicating authority had passed an order which is appealable under the statute, and the party aggrieved did not choose to file an appeal. This Court held that it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing the order. The provisions of the Central Excise Act, 1944 came up for consideration. The Court has observed: 10. Coming to the question that is raised, there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing its order. If this position is ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot also review an assessment order. 7. We also see no substance in the contention that provision for a period of limitation indicates that a refund claim could be filed without filing an appeal. Even under Section 11 under the Excise Act, the claim for refund had to be filed within a period of six months. It was still held, in Flock (India) s case (supra), that in the absence of an appeal having been filed no refund claim could be made. 8. The words in pursuance of an order of assessment only indicate the party/person who can make a claim for refund. In other words, they enable a person who has paid duty in pursuance of an order of assessment to claim the refund. These words do not lead to the conclusion that without the order of assessment having been modified in appeal or reviewed a claim for refund can be maintained. (emphasis supplied) 41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. 42. It was contended that no appeal lies against the order of self-assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts (supra). 44. The provisions under section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or reassessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, reassessment is not permitted nor conditions of exemption can be adjudicated. Reassessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position ..... X X X X Extracts X X X X X X X X Extracts X X X X
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