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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 ..... L 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 2018) CIVIL APPEAL NO. 7397 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO.15363 OF 2018) CIVIL APPEAL NO.10082 OF 2018 Justice Arun Mishra, Justice Navin Sinha And Justice Indira Banerjee JUDGMENT ARUN MISHRA, J. 1. These appeals have been preferred by the assessees as well as by the Union of India aggrieved by the judgment and order passed by the High Courts and Customs, Excise and Service Tax Appellate Tribunal, Kolkata (for short referred to as "the Tribunal"). 2. The question involved in these appeals is whether in the absence of any challenge to the order of assessment in appeal, any refund application against the assessed duty can be entertained? 3. The tribunal has in the case of ITC Limited opined that unless the order of assessment is appealed, no refund application against the assessed duty can be entertained. On the other hand, in the cases in which Union of India or the Department has come up in appeal, the High Court of Delhi framed question of law as "whether non filing of appeal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Limited are that the appellants manufacture paper from both conventional and unconventional raw materials. In the course of the manufacturing activity, waste paper/ broke arises which are recycled in the manufacturing process by making pulp. Sometimes, after entry in the RG 1 register, the paper is found to be defective and incapable of being sold and as such is required to be reprocessed and if that is not possible, then it is rejected and has to be repulped and recycled. 8. The appellant had been paying duty on paper cleared from its factory. The rate of duty of paper manufactured from conventional and unconventional raw material differed. The appellants availed exemption under Notification No.67/95CE dated March 16, 1995 as to the duty in respect of waste paper/ fresh broke. By Notification No.6/2000-CE dated March 1, 2000 complete exemption was granted in respect of paper up to the specified quantitative limit manufactured from unconventional raw materials. Upon receipt of a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i 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 excise duty leviable thereon has to be ascertained for determining the extent of exemption from payment of CVD to which the importer would be entitled. The respondent had filed the refund claim of Rs. 35.89 crores for duty totally paid under the selfassessed bills of entry, under section 27 of the 1962 Act in the Air Cargo Export Commissionerate, claiming a refund of the Additional Customs Duty (CVD) in view of Serial Number 263 A and Condition No.16 of notification No.12/2002Ex. Dated 17.03.2012 and for the said Condition No.16, mobile handsets were chargeable to a duty of 1% if no CENVAT credit had been availed by the importer. The Micromax claimed that they had made excess payment while complying with the condition No.16 of the aforesaid notification. They claimed the refund of deferential duty of 5%. The Assistant Commissioner (Refunds) rejected all the claims as not maintainable in the absence of evidence of excess payment of duty. He further held that the Bills of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 done for claiming a refund of excess duty paid under Section 27 of the Act, as now the bill of entry is to be selfassessed by the importer or exporter and will be subject to verification. Further, under section 17(4) of the Customs Act if it is found that self-assessment of duty has not been done correctly by an importer or exporter the proper officer, may reassess the duty. In case of reassessment within fifteen days from the date of reassessment under section 17(5), a speaking order has to be passed by the proper officer. In the case of reassessment done under section 17(4), it is only in these circumstances an order is passed. If no order of assessment is passed in the case of self-assessment, the refund application can lie. It was urged that section 27 has also been amended by way of amendment by the Finance Act, 2011. An application for refund of duty and the requirement of order of assessment that was requisite before the amendment has now been expressly remo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atute 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 placed on the decision of this Court in Maharashtra State Financial Corporation v. Jaycee Drugs and Pharmaceuticals (P.) Ltd. (1991) 1 SCC 637, O.P. Singla & Anr. v. Union of India & Ors., (1984) 4 SCC 450, and Union of India v. Popular Construction Co., (2001) 8 SCC 470. 18. It was also urged that section 27 is a remedy available to the assessee for the refund of duty paid and section 28 is a remedy available to the Department on the recovery of duty not levied and short levied or erroneously levied. Both the remedies can be availed without filing appeals. It was further urged that no appeal can be filed under section 128 of the Customs Act against the bill of entry. As the scheme of assessment under Section 17 of the Customs Act is that of self-assessment and only when such a self-assessment is disputed by the proper officer, an order of assessment is passed then he may appeal to the relevant appellate authority within 60 days of the communication of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 is accepted, it becomes an order of assessment. 20. Right to appeal is available to any person i.e. to the department as well as to importer/exporter against an order of self-assessment. Until and unless assessment order is modified and a fresh order of assessment is passed and duty redetermined, the refund cannot be granted by way of refund application. The refund authorities cannot take over the role of Assessing Officer. The officer considering refund claim cannot reassess an assessment order. An assessment order has to be questioned within the stipulated period of limitation. The refund application cannot be entertained directly under section 27 unless the order of assessment is appealed against and is modified. 21. The first question for consideration is whether the assessment includes self-assessment also. Prior to the amendment by the Finance Act, 2011 the assessment had been defined in Section 2(2) thus: "2(2) "assessment" includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 reassessed to duty. (5) Where any assessment done under subsection (2) is contrary to the claim of the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification therefor under this Act, and in cases other than those where the importer or the exporter, as the case may be, confirms his acceptance of the said assessment in writing, the proper officer shall pass a speaking order within fifteen days from the date of assessment of the bill of entry or the shipping bill, as the case may be." 25. Section 17 as amended by Finance Act, 2011 is extracted hereunder: "17. Assessment of duty. - (1) An importer entering any imported goods under section 46, or an exporter entering any export goods under section 50, shall save as otherwise provided in section 85, selfassess the duty, if any, leviable on such goods. (2) The proper officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (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 made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, before the expiry of one year ; (b) in any other case, before the expiry of six months, from the date of payment of duty and interest, if any, paid on such duty, in such form and manner as may be specified in the regulations made in this behalf and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person : Provided that where an application for refund h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (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 person, other than the importer, shall be construed as "the date of purchase of goods" by such person. (1A) The application under subsection (1) shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty or interest, in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty or interest, has not been passed on by him to any other person. (1B) Save as otherwise provided in this section, the period of limitation of one year shall be computed in the following manner, namely: (a) in the case of goods which are exempt from payment of duty by a special order issued under subsection (2) of section 25, the limitation of one year shall be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther 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 other provision of this Act or the regulations made thereunder or any other law for the time being in force, no refund shall be made except as provided in subsection (2). (4) Every notification under clause (f) of the first proviso to Sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its reassembly, and the Central Government shall, seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 order of assessment. Hence, the application seeking a refund on the ground that imported goods fell under a different item attracting a far lower rate of duty, having been filed more than six months after the payment of duty, was rightly rejected as timebarred. What is of 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. This Court considered the provisions of sections 47 and 17 of the Customs Act and has observed: "9. Reading Sections 47 and 17 together, it is clear beyond any doubt, that as soon as the bill of entry is filed, the proper officer examines the goods, tests them, assesses the proper duty and permits clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 subsequently on examination or testing of the goods or otherwise that any statement in such bill of entry or document or any information so furnished was not true, he could have proceeded to reassess the duty. Where the assessment done under subsection (2) is contrary to the claim of the importer or exporter regarding valuation of the goods, classification, exemption or concession, speaking order shall be passed within 15 days from the date of assessment of the bill of entry or the shipping bill as the case may be as provided in section 17(5). 33. Under the provisions of section 17 as amended by Finance Act of 2011, section 17(1) has provided to selfassess the duty if any leviable on such go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 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, decree, order or direction. 36. Section 27 of the Customs Act as amended by Finance Act, 2011 provides that any person claiming refund of any duty or interest paid or borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant or Deputy Commissioner of Customs before the expiry of one year from the date of payment of such duty or interest. If an application for refund has been made before Finance Bill received the assent of the President, it is deemed to be filed under the provision of section 27 (1) as existed and to be dealt with under section 27(2). The period of limitation of one year provided by the provisions of section 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 accepted then the provisions for adjudication in the Act and the Rules, the provision for appeal in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant. This position, in our view, will run counter to the scheme of the Act and will introduce an element of uncertainty in the entire process of levy and collection of excise duty. Such a position cannot be countenanced. The view was taken by us also gains support from the provision in sub-rule (3) of Rule 11 wherein it is laid down that whereas a result of any order passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim 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. The provisions of Section 128 deal with appeals to the Commissioner (Appeals). Any person aggrieved by any decision or order may appeal to the Commissioner (Appeals) within 60 days. There is a provision for condonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder: "128. Appeals to [Commissioner (Appeals)]. ( 1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a [Principal Commissioner of Customs or Commissioner of Customs] may appeal to the [Commissioner (Appeals)] [within sixty days] from the date of the communication to him of such dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 prior to the amendment. It will virtually amount to an order of assessment or reassessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. In Hero Cycles Ltd. v. Union of India 2009 (240) ELT 490 (Bom.) though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the relief for a refund ..... X X X X Extracts X X X X X X X X Extracts X X X X
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