Case details

Court: Supreme Court of India
Decided: 18 September 2019
Bench: Arun Mishra
Citations: 2019 INSC 1049[2019] 13 S.C.R. 357
Type: Judgment (Disposed off)

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Supreme Court of India

ITC LIMITED versus COMMISSIONER OF CENTRAL EXCISE, KOLKATA IV on 18 September 2019

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[2019] 13 S.C.R. 357

ITC LIMITED

COMMISSIONER OF CENTRAL EXCISE, KOLKATA IV

(Civil Appeal Nos. 293-294 of 2009)

SEPTEMBER 18, 2019

[ARUN MISHRA, NAVIN SINHA AND

INDIRA BANERJEE, JJ.]

Customs Act, 1962 – ss. 17 and 27 (both prior to and post-amendment by the Finance Act, 2011) – Assessment of duty – Claimfor refund of duty – Absence of any challenge to the order ofassessment in appeal – Maintainability of refund application againstthe assessed duty – On facts, appellant-paper manufacturer, payingduty on the paper cleared from its factory – By a Notification, theappellant availed complete exemption from duty – Upon receipt ofletter from the department, appellant realized its mistake in availingexemption under the Notification and started paying duty on wastepaper/broke – Thereafter, appellant filed refund claim for the periodfrom July 2001 to March 2002 for an amount in respect of dutypaid on the said waste paper – Rejection of the claim by AssessmentCommittee, Commissioner of Appeals and Tribunal – Appealthereagainst allowed – On appeal, held: Claim for refund cannotbe entertained unless the order of assessment or self-assessment ismodified in accordance with law by taking recourse to theappropriate proceedings – It would not be within the ken of s.27 toset aside the order of self-assessment and reassess the duty formaking refund – Provisions u/s.27 cannot be invoked in the absenceof amendment or modification having been made in the bill of entryon the basis of which self-assessment has been made – Order ofself-assessment is required to be followed unless modified beforethe claim for refund is entertained u/s.27 – In case any person isaggrieved by any order which would include self-assessment, hehas to get the order modified u/s.128 or under other relevantprovisions of the Act – Thus, the order passed by the tribunal isupheld and that by the High Courts are set aside and applicationsfor refund are not maintainable.

357

ADisposing of the appeals, the Court

HELD: 1.1 It is apparent from the amended definition ofSection 2(2) of the Customs Act, amended by Finance Act, 2011,that self-assessment, provisional assessment, re-assessment andany assessment in which the duty assessed is nil, is anBassessment. Assessment includes self–assessment, when theprovision of self-assessment has been incorporated in Section17(1), and corresponding change has been made in the definitionof assessment in Section 2(2). Earlier the word self–assessmentwas not included in the definition of assessment. [Para 23]

[372-G]C

1.2 Coming to the procedure of assessment of duty asprevailed before the amendment of the Act prior to theamendment made in section 17(1) by the Finance Act of 2011,the imported goods or exported goods were required to beexamined and tested by the proper officer. After such examination,Dhe had to make an assessment of the duty, if any, leviable onthese goods. Under sub-section (3) of section 17, the properofficer was authorized to require the importer, exporter or anyother person to produce any contract, broker’s note or any otherdocument as specified in the proviso and to furnish any requiredEinformation. Notwithstanding that the statements made in the billof entry relating thereto and the documents produced and theinformation furnished under sub-section (3); but if it was foundsubsequently on examination or testing of the goods or otherwisethat any statement in such bill of entry or document or anyinformation so furnished was not true, he could have proceededFto reassess the duty. Where the assessment done under sub-section (2) is contrary to the claim of the importer or exporterregarding valuation of the goods, classification, exemption orconcession, speaking order shall be passed within 15 daysfrom the date of assessment of the bill of entry or the shippingGbill as the case may be as provided in section 17(5). [Para 32][382-C-F]

1.3 Under the provisions of section 17 as amended byFinance Act of 2011, section 17(1) has provided to self–assessthe duty if any leviable on such goods by importer or exporter asHthe case may be. Self–assessment is an assessment as per the amended definition of section 2(2). It is further provided thatproper officer may verify the self–assessment of such goods, andfor this purpose, examine or test any imported goods or exportedgoods or such part thereof as may be necessary. The power toverify self–assessment lies with the proper officer and for thatpurpose under section 17(3), he may require the importer,exporter or any other person to produce such document andfurnish such information, etc. If the proper officer on verificationhas found on examination or testing of the goods or as part thereofor otherwise that the self–assessment is not done correctly, theproper officer may, without prejudice to any other action whichmay be taken under the Act, may proceed to re–assess the dutyleviable on such goods. Section 17(5) of the Act as amendedprovides that where re–assessment done under sub-section 17(4)is contrary to the assessment done by the importer or exporterregarding the matters specified therein, the proper officer has topass a speaking order on the re–assessment, within 15 days fromthe date of reassessment of the bill of entry or the shipping bill,as the case may be. The explanation to amended section 17 hasclarified that import or export before the amendment by FinanceAct, 2011 shall be governed by unamended provisions of section17. [Para 33] [382-G-H; 383-A-C]

1.4 Section 18 deals with the provisional assessment of dutywhere the importer or exporter is unable to make self–assessmentor the proper officer deem it necessary to subject any importedor export goods to any chemical or other tests; or where furtherinquiry is deemed necessary by the proper officer. [Para 34][382-D]

1.5 Section 27 of the Act prior to amendment by FinanceAct, 2011 provided for refund procedure. Any person could claima refund of duty and interest if any paid on such duty. Refund ofduty and interest if any paid pursuant to the order of assessmentor borne by him, may make an application for refund of such dutyto the Assistant Commissioner of Customs or DeputyCommissioner of Customs within one year in the case of anyimport made by any individual for his personal use or byGovernment or by any educational, research or charitable AB

Ainstitution or hospital. In any other case before the expiry of sixmonths from the date of payment of duty and interest. He has tofurther satisfy that he has not passed on such liability to any otherperson. The limitation of one year or six months shall not applywhere any duty and interest has been paid under protest. It ismade clear by the second proviso to section 27 that in case ofBrefund becomes necessary as a consequence of judgment, decree,order or direction of the appellate authority, Appellate Tribunalor any court, the limitation of one year or six months shallcommence from the date of such judgment, decree, order ordirection. [Para 35] [383-E-H]C1.6 Section 27 of the Customs Act as amended by FinanceAct, 2011 provides that any person claiming refund of any duty orinterest paid or borne by him, may make an application in suchform and manner as may be prescribed for such refund to theAssistant or Deputy Commissioner of Customs before the expiryDof one year from the date of payment of such duty or interest. Ifan application for refund has been made before Finance Billreceived the assent of the President, it is deemed to be filedunder the provision of section 27 (1) as existed and to be dealtwith under section 27(2). The period of limitation of one yearprovided by the provisions of section 27 has to be computed inEthe case of goods which are exempt from payment of duty by aspecial order issued under section 25(2) from the date of issue ofsuch an order as provided in section 27(1B)(a). Where the dutybecomes refundable as a consequence of any judgment, decree,order or direction of the appellate authority, Appellate TribunalFor any Court, the limitation of one year shall be computed fromthe date of such judgment, decree, order or direction. It isprovided in Section 27(1B)(c) that where any duty is paidprovisionally under Section 18, the limitation of one year shall becomputed from the date of adjustment of duty after the finalassessment thereof or in the case of re–assessment, from theGdate of such re–assessment. The second proviso to section 27makes it clear that limitation of 1 year shall not apply where anyduty or interest has been paid under protest. [Para 36][384-A-D]

1.7 Under Section 27(2)(a) it is incumbent upon theapplicant to satisfy that the amount of duty or interest of whichrefund has been claimed, had not been passed by him to any otherperson, the provision aims at preventing unjust enrichment. Nodoubt about it that the expression which was earlier used inSection 27(1)(i) that “in pursuance of an order of assessment”has been deleted from the amended provision of Section 27 dueto introduction of provision as to self–assessment. However, asself–assessment is nonetheless an order of assessment, nodifference is made by deletion of aforesaid expression as noseparate reasoned assessment order is required to be passed inthe case of self–assessment. It is apparent from provisions ofrefund that it is more or less in the nature of executionproceedings. It is not open to the authority which processes therefund to make a fresh assessment on merits and to correctassessment on the basis of mistake or otherwise. [Para 37, 38,41] [384-E-G; 386-H]

1.8 As the order of self–assessment is nonetheless anassessment order passed under the Act, obviously it would beappealable by any person aggrieved thereby. The expression ‘Anyperson’ is of wider amplitude. The revenue, as well as assessee,can also prefer an appeal aggrieved by an order of assessment. Itis not only the order of re–assessment which is appealable butthe provisions of Section 128 make appealable any decision ororder under the Act including that of self–assessment. The orderof self–assessment is an order of assessment as per section 2(2),as such, it is appealable in case any person is aggrieved by it.There is a specific provision made in Section 17 to pass a reasoned/speaking order in the situation in case on verification, self–assessment is not found to be satisfactory, an order of re–assessment has to be passed under section 17(4). Section 128has not provided for an appeal against a speaking order but against“any order” which is of wide amplitude. The reasoning employedby the High Court is that since there is no lis, no speaking orderis passed, as such an appeal would not lie, is not sustainable inlaw. [Para 43] [387-F-H; 388-A-B]

A1.9 The provisions under section 27 cannot be invoked inthe absence of amendment or modification having been made inthe bill of entry on the basis of which self–assessment has beenmade. In other words, the order of self–assessment is requiredto be followed unless modified before the claim for refund isentertained under Section 27. The refund proceedings are in theBnature of execution for refunding amount. It is not assessmentor re–assessment proceedings at all. Apart from that, there areother conditions which are to be satisfied for claiming exemption,as provided in the exemption notification. Existence of thoseexigencies is also to be proved which cannot be adjudicated withinCthe scope of provisions as to refund. While processing a refundapplication, re-assessment is not permitted nor conditions ofexemption can be adjudicated. Re–assessment is permitted onlyunder Section 17(3)(4) and (5) of the amended provisions. Similarwas the position prior to the amendment. It will virtually amount to an order of assessment or re–assessment in case the AssistantDCommissioner or Deputy Commissioner of Customs whiledealing with refund application is permitted to adjudicate uponthe entire issue which cannot be done in the ken of the refundprovisions under Section 27. [Para 44] [388-C-F]

1.10 The reasoning employed by the High Courts of DelhiEand Madras does not appear to be sound. The scope of theprovisions of refund under Section 27 cannot be enlarged. It hasto be read with the provisions of Sections 17, 18, 28 and 128.[Para 46] [389-A]

1.11 On consideration of overall effect of the provisionsFprior to amendment and post–amendment under Finance Act,2011, it is opined that the claim for refund cannot be entertainedunless the order of assessment or self–assessment is modifiedin accordance with law by taking recourse to the appropriateproceedings and it would not be within the ken of Section 27 toGset aside the order of self–assessment and reassess the duty formaking refund; and in case any person is aggrieved by any orderwhich would include self–assessment, he has to get the ordermodified under Section 128 or under other relevant provisionsof the Act. The order(s) passed by Customs, Excise, and Service H

Tax Appellate Tribunal is upheld and that passed by the HighCourts of Delhi and Madras to the contrary, are set aside.The applications for refund were not maintainable. [Para 47, 48][389-B-E]

Escorts Ltd. v. Union of India & Ors. (1994) Supp. 3SCC 86 ;Priya Blue Industries v. Commissioner ofCustoms2004 (172) E.L.T. 145 (SC) ; [2004] 4 Suppl.SCR 501 – relied on.

Union of India & Ors. v. Micromax Informatics Ltd.2016 (335) ELT 446 (Del) ;Aman Medical ProductsLimited v. Commissioner of Customs,Delhi 2010 (250)ELT 30 (Del) ;M/s. SRF v. Commissioner of Customs,Chennai2015 (318) ELT 607 (SC) ;Commissioner ofWealth Tax, Gujarat III Ahmedabad v. Ellis BridgeGymkhana (1998) 1 SCC 384 : [1997] 4 Suppl. SCR626 ;Maharashtra State Financial Corporation v.Jaycee Drugs and Pharmaceuticals (P.) Ltd.(1991) 1SCC 637 ;O.P. Singla & Anr. v. Union of India & Ors.(1984) 4 SCC 450 ; [1985] 1 SCR 351 ; Union of Indiav. Popular Construction Co.(2001) 8 SCC 470 : [2001]3 Suppl. SCR 619 ;Commissioner of Customs v. SayedAli(265) ELT 17 (SC) ;Collector of Central Excise,Kanpur v. Flock (India) Pvt. Ltd. 2000 (120) ELT 285(SC) : (2000) 6 SCC 650 : [2000] 2 Suppl. SCR 156 ;Hero Cycles Ltd. v. Union of India2009 (240)ELT 490 (Bom.) ;Central Office Mewar PalaceOrg. v. Union of India2008 (12) STR 545 (Raj.)– referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION : CIVIL APPEAL NOS.293-294 OF 2009.

From the Judgment and Order dated 27.10.2008 of The Customs,Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkatain Final Order No.A-1045/Kol/08 in Excise Appeal No. EDM-274/05 &Cross Objection No.111 of 2005.

WithE

Civil Appeal Nos. 2960 of 2010, 5878, 310, 4432-4434, 6407, 5490,5491, 5489, 6054 of 2011, 1575-1582,1585, 1571, of 2012, 7710 of 2014,59-60, 96 of 2016, 20852, 18765 of 2017, 10082 of 2018, 7384-86, 7387,7388, 7389, 7391, 7392, 7393, 7394-96, 7397 of 2019.

P. Chidambaram, K. Radhakrishnan, Sr. Advs., Tarun Gulati, ShashiFMathews, Ankit Sachdeva, Kishore Kunal, Neil Hildreth, Ms. SunitaRani Singh, Ms. Shirin Khajuria, Shekhar Vyas, Alok Yadav,Ajay Aggarwal, Ms. Mallika Joshi, Rajan Narain, B. Krishna Prasad,M. P. Devanath, L. Badri Narayanan, Aaditya Bhattacharya, DhruvMatta, M. P. Devnath, R. Parthasarathy, Kishore Kunal, Ms. DeepikaGNandakumar, V. N. Raghupathy, Rupesh Kumar, Mrs. PankhuriShrivastava, Pravesh Bahuguna, Ms. Hetvi Mota, Jitendra Singh,Anshuman Sikri, Prashant Kumar (for M/s. AP & J Chambers), NikhilNayyar, N. Sai Vinod, Shekhar Vyas, Senthil Jagadeesan, Ms. Sonakshi Malhan, Ms. Suriti Chowdhary, Ms. Nitya Rao, Ms. Mrinal Kanwar,Ms. E. R. Sumathy, E. C. Agrawala, Abhishek A. Rastogi (for M/s.Khaitan & Co.), Advs. for the appearing parties.

The Judgment of the Court was delivered by ARUN MISHRA, J.

1. These appeals have been preferred by the assessees as wellas by the Union of India aggrieved by the judgment and order passed bythe 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 absenceof any challenge to the order of assessment in appeal, any refundapplication against the assessed duty can be entertained?

3. The tribunal has in the case of ITC Limited opined that unlessthe order of assessment is appealed, no refund application against theassessed duty can be entertained. On the other hand, in the cases inwhich Union of India or the Department has come up in appeal, theHigh Court of Delhi framed question of law as “whether non filing ofappeal against the assessed Bill of Entry in which there was no lis betweenthe importer and the Revenue at the time of payment of duty will deprivethe importer of his right to file refund claim under Section 27 of theCustoms Act, 1962 (for short, “the 1962 Act”)”?

4. While interpreting provisions contained in Section 27 of theAct, the High Court has opined that when there is no assessment orderfor being challenged in appeal, which is passed under Section 27(1)(i) ofthe Act, because there is no contest or lis and hence no adversarialassessment order, the cases would be covered by the provision of Section27(i) (ii) and refund applications can be maintained by the assessee evenin the absence of filing appeals against the assessed bill of entry. TheHigh Court of Madras has opined similarly.

5. In the case of Union of India & Ors. vs. MicromaxInformatics Ltd., reported in (2016) 335 ELT 446 (Del) the High Courtof Delhi has opined that an important change has been made in Section27 of the Customs Act in that a person can now claim refund of any dutyor interest as long as such duty or interest was paid or borne by suchperson. The conditionality of such payment having been made pursuant A

Ato an order of assessment does not exist. It has also been observed thatonce an application is made under Section 27(1) of the Act, it is incumbenton the authority concerned to make an order under 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 notopen to an authority to refuse to consider the application for refund onlyBbecause no appeal has been filed against the assessment order, if thereis one.

6. The High court has further opined that although under Section27(2) of the Act, the word ‘assessment’ includes a self-assessment, theclearance of the goods upon filing of the bills of entry and payment ofCduty 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 paidunder protest. In any event, after 8.4.2011, as long as customs duty orinterest has been borne by a person, a claim for refund made by suchperson under Section 27(1) of the Act will have to be entertained and anDorder passed thereon by the authority concerned, even where an orderof assessment may not have been reviewed or modified in appeal.Reliance has been placed on the case of Aman Medical ProductsLimited v. Commissioner of Customs, Delhi, 2010 (250) ELT 30 (Del).

7. The facts of the case of ITC Limited are that the appellantsEmanufacture paper from both conventional and unconventional rawmaterials. In the course of the manufacturing activity, waste paper/broke arises which are recycled in the manufacturing process by makingpulp. Sometimes, after entry in the RG 1 register, the paper is found tobe defective and incapable of being sold and as such is required to bereprocessed and if that is not possible, then it is rejected and has to beFre-pulped and recycled.

8. The appellant had been paying duty on paper cleared from itsfactory. The rate of duty of paper manufactured from conventional andunconventional raw material differed. The appellants availed exemptionunder Notification No.67/95-CE dated March 16, 1995 as to the duty inGrespect of waste paper/ fresh broke. By Notification No.6/2000-CEdated March 1, 2000 complete exemption was granted in respect ofpaper up to the specified quantitative limit manufactured fromunconventional raw materials. Upon receipt of a letter dated March 30,2001 from the Superintendent of Central Excise, the Appellant examinedHthe matter and realized the mistake committed by it in availing the exemption under Notification No.67.95-CE in respect of waste paper/broke utilized in the manufacture of paper cleared at ‘nil’ rate of dutyunder Notification No.6/2000-CE. From May 2001 onwards, the appellantstopped availing the exemption and started payment of duty on wastepaper/broke.

9. The relevant period involved in the appeal i.e. July 2001 toMarch 2002. The Appellant’s assessments for this period were provisionaland these entries were finalized on 30.01.2003. The provisionalassessment order was passed on 1.3.2002. The appellant has claimedthat at the time of the said final assessment order dated 30.01.2003, itwas not aware of the notification No.10/96-CE or the said circular dated1.3.2001 and as such, no claim thereunder was made by it till that timenor was any such claim so considered or decided in the said finalassessment order.

10. On July 18, 2003, the appellant filed a refund claim for anamount of Rs.28,73,120/- in respect of the duty paid on the said wastepaper/ broke during the period from July 2001 to March 2002. The saidrefund claim was filed under section 11(b) of the Central Excise Act,1944 (for short, referred to as “the 1944 Act”) and within the statutoryperiod of limitation.

11. A show cause notice was issued as to why the said claim benot rejected to which a reply was filed. The assessment committeerejected the said claim. The Commissioner of Appeals dismissed theappeal. Thereafter, successive appeal was preferred before the Tribunal.The Tribunal has rejected the refund claim of the appellant. Hence, theappeal has been preferred under section 35(b) of the 1944 Act.

12. In the case of Union of India & Ors. v. Micromax InformaticsLtd., the respondents (i.e. Micromax Informatics Ltd.) had importedmobile handsets including cellular phones during the period 30.07.2014to 29.8.2014. At the time of customs clearance, they paid AdditionalCustoms 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 self-assessed by the respondents in terms of the Self-Assessment Schemeunder section 17 of the Act and were thus finally assessed. This Court inM/s. SRF v. Commissioner of Customs, Chennai 2015 [318] ELT 607(SC) held that for quantification of CVD in case of an article that hasbeen imported, it has to be presumed that the said imported article has A

Abeen manufactured in India and then the amount of excise duty leviablethereon has to be ascertained for determining the extent of exemptionfrom payment of CVD to which the importer would be entitled. Therespondent had filed the refund claim of Rs.35.89 crores for duty totallypaid under the self-assessed bills of entry, under section 27 of the 1962Act in the Air Cargo Export Commissionerate, claiming a refund of theBAdditional Customs Duty (CVD) in view of Serial Number 263 A andCondition No.16 of notification No.12/2002-Ex. Dated 17.03.2012 andfor the said Condition No.16, mobile handsets were chargeable to a dutyof 1% if no CENVAT credit had been availed by the importer. TheMicromax claimed that they had made excess payment while complyingCwith the condition No.16 of the aforesaid notification. They claimed therefund of deferential duty of 5%. The Assistant Commissioner (Refunds)rejected all the claims as not maintainable in the absence of evidence ofexcess payment of duty. He further held that the Bills of Entry hadalready been assessed and there were assessment orders which couldonly be reviewed or modified in appeal. It was also observed that theDrespondent failed to submit any reassessment order or speaking orderunder section 17(5) of the 1962 Act and that it was beyond the jurisdictionof the Refund Branch to decide the issue on merits. The officerconsidering a refund claim cannot sit in appeal over an assessment madeby a competent officer. The High Court held that self-assessment is notEan assessment order per se and allowed the writ petition. Hence theappeal by the Union of India.

13. In Commissioner of Customs, New Delhi v. Aman MedicalProducts Ltd., the respondents had imported cannula for the purpose ofmanufacture of injection needles. At the time of filing of bills of entry,Fthe respondent could not indicate the benefits available under notificationNo.6/2002 Cus, dated 1.3.2002 which provided a concessional rate ofduty on the imported goods. The bills of entry were assessed finally.Subsequently, the respondent filed an application for refund. The refundclaim was rejected by the Deputy Commissioner. The respondentpreferred an appeal before the Commissioner (Appeals) for grant ofGrefund of excess duty paid by them. The appeal was allowed by theCommissioner of Appeals. The Department filed an appeal before theTribunal. The Tribunal observed that refund claim cannot be adjudicatedon merits. The respondent – Aman Medical Products Ltd filed a writpetition before the High Court. The writ petition has been allowed.H

14. Shri P. Chidambaram, learned senior counsel has taken usthrough the definition of the ‘assessment’ as prevailed under the 1962Act 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 FinanceAct, 2011. It was urged by learned senior counsel that prior to theamendment by the Finance Act, 2011, the scheme of assessment undersection 17 of the Customs Act was such that once a bill of entry wasfiled, examination and testing of the imported goods were done by theproper officer. Thereafter, an order of assessment was passed after thephysical examination. Accordingly, section 27 of the Customs Actprovided 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 whohad borne the duty. Earlier, there was a necessity for an order ofassessment 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 theassessment of bill of exchange done for claiming a refund of excessduty paid under Section 27 of the Act, as now the bill of entry is to beself-assessed 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 exporterthe proper officer, may re-assess the duty. In case of re-assessmentwithin fifteen days from the date of re-assessment under section 17(5),a speaking order has to be passed by the proper officer. In the case ofre-assessment done under section 17(4), it is only in these circumstancesan order is passed. If no order of assessment is passed in the case ofself-assessment, the refund application can lie. It was urged that section27 has also been amended by way of amendment by the Finance Act,2011. An application for refund of duty and the requirement of order ofassessment that was requisite before the amendment has now beenexpressly removed. It would be a retrograde step to interpret the amendedprovision otherwise and to deny the refund claim which is not adjudicatorywhen the bill of entryhas been passed. In the case of self-assessment,the duty paid under a mistake can always be claimed without filing anappeal and in that event concerned officer has to look into the matterwhether the claim for refund was justified.

15. Reliance has been placed on behalf of the assessee on SRFLimited vs. Commissioner of Customs (supra). It is not necessary topass an order of reassessment or speaking order under the amended A

Aprovisions of section 17. The decision in Priya Blue Industries v.Commissioner of Customs 2004 (172) E.L.T. 145 (SC) is based uponthe unamended provisions, thus, cannot hold the field and is inapplicablein view of the amendment made in the provisions. Under section 17(1)of the amended provisions, bills of entry have to be self-assessed byimporter or exporter. The verification of the self-assessment has nowBbeen made optional. The self-assessment is not to be disturbed unlessthere is a verification required by the proper officer and for this purpose,he may examine or test goods or part thereof.

16. It was further urged on behalf of the assessee that amendedsection 17 and section 27 are to be read together. By amended sectionC27 it is now provided that an application for refund of duty will be madeby any person who has paid the duty or by any person who has bornethe duty. Earlier refund could be claimed by the person who has paidthe duty. Under the post amendment provision the words “in pursuanceto the order of assessment” have been deleted and a refund claim isDmaintainable by the assessee in case duty has been “paid by him”. Thelegislative intent is clear. Now the order of assessment has been madeirrelevant and a re-assessment to an order is no longer a pre-requisitefor maintaining a refund claim. Now under the scheme of self-assessment, there would be no order of assessment by the proper officer.

E17. It was further urged on behalf of the assessee that section 27cannot be rendered otiose or redundant. Section 27 does not containany stipulation which may suggest that refunds can be filed only afterthe Bill of Entry has been appealed against. In the absence of such astatutory condition, a restriction on refund claim cannot be imported intothe statute. Taxing statute has to be strictly interpreted and there is noFroom to infer any intendment thereof as held by this Court inCommissioner of Wealth Tax, Gujarat III Ahmedabad v. Ellis BridgeGymkhana, (1998) 1 SCC 384. Reliance has also been placed on thedecision of this Court in Maharashtra State Financial Corporation v.Jaycee Drugs and Pharmaceuticals (P.) Ltd. (1991) 1 SCC 637, O.P.GSingla & Anr. v. Union of India & Ors., (1984) 4 SCC 450, and Unionof India v. Popular Construction Co., (2001) 8 SCC 470.

18. It was also urged that section 27 is a remedy available to theassessee for the refund of duty paid and section 28 is a remedy availableto the Department on the recovery of duty not levied and short levied orHerroneously levied. Both the remedies can be availed without filing appeals. It was further urged that no appeal can be filed under section128 of the Customs Act against the bill of entry. As the scheme ofassessment under Section 17 of the Customs Act is that of self-assessment and only when such a self-assessment is disputed by theproper officer, an order of assessment is passed then he may appeal tothe relevant appellate authority within 60 days of the communication ofthe order. It is only in a situation where speaking order is passed thenthe assessee is required to file an appeal. Unless a speaking order ofassessment is passed, no appeal can lie and the only option for refund ofduty paid is to file a refund claim. The bill of entry is merely stamped toallow clearance of the goods. No reasons are provided in the bill ofentry on account of which it can be regarded as an order which can besubjected to appeal under section 128 of the Customs Act. The judgmentof this Court in Commissioner of Customs v. Sayed Ali (265) ELT 17(SC) is not relevant. The said judgment was passed in respect of section28 of the Customs Act.

19. On behalf of the Union of India/Department, it is contendedthat self-assessment is an assessment. It is not open to the proper officerafter accepting the self-assessment to entertain a claim for refund in theabsence of the self-assessment being questioned in the appeal. Thedirection to reassess the bill of entry after the expiry of more than a yearcannot be ordered. Reliance has been placed on Collector of CentralExcise, Kanpur v. Flock (India) Pvt. Ltd., 2000 (120) ELT 285 (SC).In the instant case, the bills of entry were filed and they were self-assessed. It is an assessment under the Act and in case benefit ofnotification has not been claimed, in the absence of challenge toassessment of bills of entry by way of filing the appeal, the benefit ofnotification cannot be claimed. An application for refund is notmaintainable 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, itcannot be reopened at any point of time. The refund claim is not anappellate proceeding. The officer considering a refund claim cannot sitin appeal over an assessment made by a competent officer. The officerconsidering the refund claim cannot also review an assessment order.Even after the amendment is made in 2011, the conditionality of paymenthaving been made pursuant to an order of assessment continue to exist.As the self-assessment of bills of entry is an order of assessment perse, unless the order of assessment passed under section 2(2) of the Act AB

Ais appealed before Commissioner of Appeals for modification no claimfor refund can be entertained. The provision of section 128 cannot berendered otiose. The amendment has been made in order to simplify theprocedure but the legal effect of the self-assessment is that of assessment.While processing self-assessment some exercise has to be done. Onceit is accepted, it becomes an order of assessment.B

20. Right to appeal is available to any person i.e. to the departmentas well as to importer/exporter against an order of self-assessment. Untiland unless assessment order is modified and a fresh order of assessmentis passed and duty redetermined, the refund cannot be granted by wayof refund application. The refund authorities cannot take over the roleCof Assessing Officer. The officer considering refund claim cannotreassess an assessment order. An assessment order has to be questionedwithin the stipulated period of limitation. The refund application cannotbe entertained directly under section 27 unless the order of assessmentis appealed against and is modified.

21. The first question for consideration is whether the assessmentincludes self-assessment also. Prior to the amendment by the FinanceAct, 2011 the assessment had been defined in Section 2(2) thus:

“2(2) “assessment” includes provisional assessment,reassessment and any order of assessment in which the dutyEassessed is nil;”

22. After the amendment of Section 2(2) made by the FinanceAct, 2011 the definition of ‘assessment’ reads thus:

“2(2) “assessment” includes provisional assessment, self-Fassessment, reassessment and any assessment in which the dutyassessed is nil;”

23. It is apparent from the amended definition that self-assessment,provisional assessment, re-assessment and any assessment in which theduty assessed is nil, is an assessment. Assessment includes self-assessment, when the provision of self-assessment has been incorporatedGin Section 17(1), and corresponding change has been made in thedefinition of assessment in Section 2(2). Earlier the word self-assessmentwas not included in the definition of assessment.

24. The assessment of duty was provided in section 17 of theunamended Act prior to 2011. Pre-amended section 17 of the CustomsHAct is extracted hereunder:

“17. Assessment of duty.—(1) After an importer has enteredany imported goods under section 46 or an exporter has enteredany export goods under section 50 the imported goods or the exportgoods, as the case may be, or such part thereof as may benecessary may, without undue delay, be examined and tested bythe proper officer.

(2) After such examination and testing, the duty, if any, leviableon such goods shall, save as otherwise provided in section 85, beassessed.

(3) For the purpose of assessing duty under sub-section (2), theproper officer may require the importer, exporter or any otherperson to produce any contract, broker’s note, policy of insurance,catalogue or other document whereby the duty leviable on theimported goods or export goods, as the case may be, can beascertained, and to furnish any information required for suchascertainment which is in his power to produce or furnish, andthereupon the importer, exporter or such other person shall producesuch document and furnish such information.

(4) Notwithstanding anything contained in this section, importedgoods or export goods may, prior to the examination or testingthereof, be permitted by the proper officer to be assessed to dutyon the basis of the statements made in the entry relating theretoand the documents produced and the information furnished undersub-section (3); but if it is found subsequently on examination ortesting of the goods or otherwise that any statement in such entryor document or any information so furnished is not true in respectof any matter relevant to the assessment, the goods may, withoutprejudice to any other action which may be taken under this Act,be re-assessed to duty.

(5) Where any assessment done under sub-section (2) is contraryto the claim of the importer or exporter regarding valuation ofgoods, classification, exemption or concessions of duty availedconsequent to any notification therefor under this Act, and in casesother than those where the importer or the exporter, as the casemay be, confirms his acceptance of the said assessment in writing,the proper officer shall pass a speaking order within fifteen daysfrom 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 extractedhereunder:

“17. Assessment of duty. — (1) An importer entering any importedgoods under section 46, or an exporter entering any export goodsunder section 50, shall save as otherwise provided in section 85,self-assess the duty, if any, leviable on such goods.

(2) The proper officer may verifythe self-assessment of suchgoods and for this purpose, examine or test any imported goods orexport goodsor such part thereof as may be necessary.

[(3) For verificationof self-assessment under sub-section (2), theproper officer may require the importer, exporter or any otherperson to produce any document or information, whereby the dutyleviable on the imported goods or export goods, as the case maybe, can be ascertained and thereupon, the importer, exporter orsuch other person shall produce such document or furnish suchinformation.]

(4) Where it is found on verification, examination or testing of thegoods or otherwise that the self-assessment is not done correctly,the proper officermay, without prejudice to any other action whichmay be taken under this Act, re-assess the duty leviable on suchgoods.

(5) Where any re-assessment done under sub-section (4) is contraryto the self-assessment doneby the importer or exporter regardingvaluation of goods, classification, exemption or concessions ofduty availed consequent to any notification issued therefor underthis Act and in cases other than those where the importer orexporter, as the case may be, confirms his acceptance of the saidre-assessment in writing, the proper officer shall pass a speakingorder on the re-assessment, within fifteen days from the date ofre-assessment of the bill of entry or the shipping bill, as the casemay be.

(6) Where re-assessment has not been done or a speaking order-has not been passed on reassessment,the proper officer mayaudit the assessment of duty of the imported goods or export goodsat his office or at the premises of the importer or exporter, as maybe expedient, in such manner as may be prescribed.

ITC LIMITED v. COMMISSIONER OF CENTRAL EXCISE,KOLKATA IV [ARUN MISHRA, J.]

Explanation.—For the removal of doubts, it is hereby declaredthat in cases where an importer has entered any imported goodsunder section 46 or an exporter has entered any export goodsunder section 50 before the date on which the Finance Bill, 2011receives the assent of the President, such imported goods or exportgoods shall continue to be governed by the provisions of section17 as it stood immediately before the date on which such assent isreceived.]”

26. Section 27 deals with a claim for refund of duty. Provision ofsection 27 which prevailed before amendment by Finance Act, 2011 isextracted 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, ifany, paid on such duty to the Assistant Commissioner of Customsor Deputy Commissioner of Customs- (a) in the case of any import made by any individual for his personaluse or by Government or by any educational, research or charitableinstitution 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 suchduty, in such form and manner as may be specified in the regulationsmade in this behalf and the application shall be accompanied bysuch documentary or other evidence (including the documentsreferred to in section 28C) as the applicant may furnish to establishthat the amount of duty and interest, if any, paid on such duty inrelation to which such refund is claimed was collected from, orpaid 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 otherperson :

Provided that where an application for refund has been madebefore the commencement of the Central Excises and CustomsLaws (Amendment) Act, 1991, such application shall be deemed A

Ato have been made under this sub-section and the same shall bedealt with in accordance with the provisions of sub-section (2):

Provided further that the limitation of one year or six months, asthe case may be, shall not apply where any duty and interest, ifany, paid on such duty has been paid under protest:

Provided also that in the case of goods which are exempt frompayment of duty by a special order issued under sub-section (2)of section 25, the limitation of one year or six months, as the casemay be, shall be computed from the date of issue of such order.

[Provided also that where the duty becomes refundable as aconsequence of judgment, decree, order or direction of the appellateauthority, Appellate Tribunal or any court, the limitation of oneyear or six months, as the case may be, shall be computed fromthe date of such judgment, decree, order or direction.

Explanation I.-For the purposes of this sub-section, “the date ofDpayment of duty and interest, if any, paid on such duty”, in relationto a person, other than the importer, shall be construed as “thedate of purchase of goods” by such person.

Explanation II.-Where any duty is paid provisionally under section18, the limitation of one year or six months, as the case may be,Eshall be computed from the date of adjustment of duty after thefinal assessment thereof.

(emphasis supplied)”

27. The provision of Section 27 of the Customs Act as amendedby Finance Act, 2011 is extracted hereunder:F

“27. Claim for refund of duty. — (1) Any person claiming refundof any duty or interest, —

(a) paid by him; or

(b) borne by him,

may make an application in such form and manner as may beprescribed for such refund to the Assistant Commissioner ofCustoms or Deputy Commissioner of Customs, before the expiryof one year, from the date of payment of such duty or interest:

Provided that where an application for refund has been madebefore the date on which the Finance Bill, 2011 receives the assentof the President, such application shall be deemed to have beenmade under sub-section (1), as it stood before the date on whichthe Finance Bill, 2011 receives the assent of the President and thesame shall be dealt with in accordance with the provisions of sub-section (2):

Provided further that the limitation of one year shall not applywhere any duty or interest has been paid under protest.

Provided also that where the amount of refund claimed is lessthan rupees one hundred, the same shall not be refunded.

Explanation. — For the purposes of this sub-section, “the date ofpayment of duty or interest’’ in relation to a person, other than theimporter, shall be construed as “the date of purchase of goods”by such person.

(1A) The application under sub-section (1) shall be accompaniedby such documentary or other evidence (including the documentsreferred to in section 28C) as the applicant may furnish to establishthat the amount of duty or interest, in relation to which such refundis claimed was collected from, or paid by, him and the incidenceof such duty or interest, has not been passed on by him to anyother person.

(1B) Save as otherwise provided in this section, the period oflimitation of one year shall be computed in the following manner,namely: —

(a) in the case of goods which are exempt from paymentof dutyby a special order issued under sub-section (2) of section 25, thelimitation of one year shall be computed from the date of issue ofsuch order; (b) where the duty becomes refundable as a consequence of anyjudgment, decree, order or direction of the appellate authority,Appellate Tribunal or any court, the limitation of one year shall becomputed from the date of such judgment, decree, order ordirection; A

(c) where any duty is paid provisionally under section 18, thelimitation of one year shall be computed from the date of adjustmentof duty after the final assessment thereof or in case of re-assessment, from the date of such re-assessment.]

(2) If, on receipt of any such application, the AssistantBCommissioner of Customs or Deputy Commissioner of Customsis satisfied that the whole or any part of the duty and interest, ifany, paid on such duty paid by the applicant is refundable, he maymake an order accordingly and the amount so determined shall becredited to the Fund:

Provided that the amount of duty and interest, if any, paid on suchduty as determined by the Assistant Commissioner of Customs orDeputy Commissioner of Customs under the foregoing provisionsof this sub-section shall, instead of being credited to the Fund, bepaid to the applicant, if such amount is relatable to- C

D(a) the duty and interest, if any, paid on such duty paid by theimporter [or the exporter, as the case may be], if he had not passedon the incidence of such duty and interest, if any, paid on suchduty to any other person; (b) the duty and interest, if any, paid on such duty on importsmade by an individual for his personal use ; E

(c) the duty and interest, if any, paid on such duty borne by thebuyer, if he had not passed on the incidence of such duty andinterest, if any, paid on such duty to any other person; (d) the export duty as specified in section 26; F

(e) drawback of duty payable under sections 74 and 75; (f) the duty and interest, if any, paid on such duty borne by anyother such class of applicants as the Central Government may, bynotification in the Official Gazette, specify:

(g) the duty paid in excess by the importer before an orderpermitting clearance of goods for home consumption is madewhere—

(i) such excess payment of duty is evident from the bill of entry inthe case of self-assessed bill of entry; or H

(ii) the duty actually payable is reflected in the reassessed bill ofentry in the case of reassessment.

Provided further that no notification under clause (f) of the firstproviso shall be issued unless in the opinion of the CentralGovernment the incidence of duty and interest, if any, paid onsuch duty has not been passed on by the persons concerned toany other person.

(3) Notwithstanding anything to the contrary contained in anyjudgment, decree, order or direction of the Appellate Tribunal, theNational Tax Tribunal or any Court or in any other provision ofthis Act or the regulations made thereunder or any other law forthe time being in force, no refund shall be made except as providedin sub-section (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 issitting, as soon as may be after the issue of the notification, and, ifit is not sitting, within seven days of its re-assembly, and the CentralGovernment shall, seek the approval of Parliament to thenotification by a resolution moved within a period of fifteen daysbeginning with the day on which the notification is so laid beforethe House of the People and if Parliament makes any modificationin the notification or directs that the notification should cease tohave effect, the notification shall thereafter have effect only insuch modified form or be of no effect, as the case may be, butwithout prejudice to the validity of anything previously donethereunder.

(5) For the removal of doubts, it is hereby declared that anynotification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modifiedunder sub-section (4), may be rescinded by the CentralGovernment at any time by notification in the Official Gazette.”

28. Section 28 deals with the recovery of duties not levied or notpaid or short levied or short paid or erroneously refunded. Section 28(1)is extracted hereunder:

A“28. Recovery of duties not levied or not paid or short-levied orshort-paid or erroneously refunded.— (1) Where any duty hasnot been levied or not paid or has been short-levied or short-paidor erroneously refunded, or any interest payable has not beenpaid, part-paid or erroneously refunded, for any reason other thanthe reasons of collusion or any wilful mis-statement or suppressionBof facts,—

(a) the proper officer shall, within two years from the relevantdate, serve notice on the person chargeable with the duty or interestwhich has not been so levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously beenCmade, requiring him to show cause why he should not pay theamount specified in the notice; Provided that before issuing notice, the proper officer shall holdpre-notice consultation with the person chargeable with duty orinterest in such manner as may be prescribed; D

(b) the person chargeable with the duty or interest, may pay beforeservice 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, E

the amount of duty along with the interest payable thereon undersection 28AA or the amount of interest which has not been sopaid or part-paid:

Provided that the proper officer shall not serve such show causenotice, where the amount involved is less than rupees oneFhundred.”

29. The first question for consideration is whether in the case ofself-assessment without passing a speaking order, it can be termed to beGan order of self-assessment. It was urged on behalf of the assesses thatthere is no application of mind and merely an endorsement is made bythe authorities concerned on the bill of entry which cannot be said to bean order much less a speaking order.

30. In Escorts Ltd. v. Union of India & Ors. (1994) Supp. 3HSCC 86 the question arose for consideration as to the Bill of Entry classifying the imported goods under a certain tariff item and paying theduty thereon. This Court held that in such a case signing of the bill ofentry itself amounted to passing an order of assessment. Hence, theapplication seeking a refund on the ground that imported goods fell undera different item attracting a far lower rate of duty, having been filedmore than six months after the payment of duty, was rightly rejected astime-barred. What is of significance is that an entry made in the bill ofentry has been held to be an order of assessment passed by the AssessingOfficer. This Court considered the provisions of sections 47 and 17 ofthe Customs Act and has observed:

“9. Reading Sections 47 and 17 together, it is clear beyond anydoubt, that as soon as the bill of entry is filed, the proper officerexamines the goods, tests them, assesses the proper duty andpermits clearance of goods only after the duty and other charges,if any, are paid. In the scheme of the Act, there is no room forcontending that any goods will be allowed to be cleared withoutassessment of the duty, whether provisional or final, as the casemay be.

10. Now it may be noticed that the Act does not prescribe anyparticular form in which the order of assessment is to be made. Inthe very nature of things, no formal order of assessment can beexpected when there is no dispute as to the classification or therate of duty. No formal order can be expected in such a case, it ismore like ‘across-the-counter’ affair. In the present case, it maybe reiterated that the appellant himself classified the goods undertariff item No. 73.33/40 and paid the duty at the rate applicablethereunder. At that stage, he did not raise any dispute either as toclassification or as to the right of duty applicable. Hence, therewas no occasion for passing a formal order since there was no lisat that stage. The bill of entry presented by the appellant wassigned, signifying approval by the assessing officer. That itself isan order of assessment in such a situation. We are, therefore, notprepared to agree that there is no order of assessment in thiscase, and therefore, the limitation prescribed in Section 27 did notbegin to run. Section 27 is emphatic in language. It says that anapplication for refund of duty shall be made before the expiry ofsix months from the date on which the duty was paid. In the faceof this provision, the authorities under the Act, including the AB

AGovernment of India, had no option but to dismiss the appellant’sapplication. This is also the view taken by this Court in MadrasRubber Factory Ltd. v. Union of India (1976) 2 SCC 255.”

31. It is apparent from the aforesaid discussion that theBendorsement made on the bill of entry is an order of assessment. Itcannot be said that there is no order of assessment passed in such acase. 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 prevailedCbefore the amendment of the Act prior to the amendment made in section17(1) by the Finance Act of 2011, the imported goods or exported goodswere required to be examined and tested by the proper officer. Aftersuch examination, he had to make an assessment of the duty, if any,leviable on these goods. Under sub-section (3) of section 17, the properDofficer was authorized to require the importer, exporter or any otherperson to produce any contract, broker’s note or any other document asspecified in the proviso and to furnish any required information.Notwithstanding that the statements made in the bill of entry relatingthereto and the documents produced and the information furnished undersub-section (3); but if it was found subsequently on examination or testingEof the goods or otherwise that any statement in such bill of entry ordocument or any information so furnished was not true, he could haveproceeded to reassess the duty. Where the assessment done under sub-section (2) is contrary to the claim of the importer or exporter regardingvaluation of the goods, classification, exemption or concession, speakingForder shall be passed within 15 days from the date of assessment of thebill of entry or the shipping bill as the case may be as provided in section17(5).

33. Under the provisions of section 17 as amended by FinanceAct of 2011, section 17(1) has provided to self-assess the duty if anyGleviable on such goods by importer or exporter as the case may be. Self-assessment is an assessment as per the amended definition of section2(2). It is further provided that proper officer may verify the self-assessment of such goods, and for this purpose, examine or test anyimported goods or exported goods or such part thereof as may benecessary. The power to verify self-assessment lies with the proper H

officer and for that purpose under section 17(3), he may require theimporter, exporter or any other person to produce such document andfurnish such information, etc. If the proper officer on verification hasfound on examination or testing of the goods or as part thereof or otherwisethat the self-assessment is not done correctly, the proper officer may,without prejudice to any other action which may be taken under the Act,may proceed to re-assess the duty leviable on such goods. Section 17(5)of the Act as amended provides that where re-assessment done undersub-section 17(4) is contrary to the assessment done by the importer orexporter regarding the matters specified therein, the proper officer hasto pass a speaking order on the re-assessment, within 15 days from thedate of reassessment of the bill of entry or the shipping bill, as the casemay be. The explanation to amended section 17 has clarified that importor export before the amendment by Finance Act, 2011 shall be governedby unamended provisions of section 17.

34. Section 18 deals with the provisional assessment of duty wherethe importer or exporter is unable to make self-assessment or the properofficer deem it necessary to subject any imported or export goods to anychemical or other tests; or where further inquiry is deemed necessaryby 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 ofduty and interest if any paid on such duty. Refund of duty and interest ifany paid pursuant to the order of assessment or borne by him, maymake an application for refund of such duty to the Assistant Commissionerof Customs or Deputy Commissioner of Customs within one year in thecase of any import made by any individual for his personal use or byGovernment or by any educational, research or charitable institution orhospital. In any other case before the expiry of six months from the dateof payment of duty and interest. He has to further satisfy that he has notpassed on such liability to any other person. The limitation of one year orsix months shall not apply where any duty and interest has been paidunder protest. It is made clear by the second proviso to section 27 that incase of refund becomes necessary as a consequence of judgment,decree, order or direction of the appellate authority, Appellate Tribunalor any court, the limitation of one year or six months shall commencefrom the date of such judgment, decree, order or direction.

A36. Section 27 of the Customs Act as amended by Finance Act,2011 provides that any person claiming refund of any duty or interestpaid or borne by him, may make an application in such form and manneras may be prescribed for such refund to the Assistant or DeputyCommissioner of Customs before the expiry of one year from the dateof payment of such duty or interest. If an application for refund hasBbeen made before Finance Bill received the assent of the President, it isdeemed to be filed under the provision of section 27 (1) as existed and tobe dealt with under section 27(2). The period of limitation of one yearprovided by the provisions of section 27 has to be computed in the caseof goods which are exempt from payment of duty by a special orderCissued under section 25(2) from the date of issue of such an order asprovided in section 27(1B)(a). Where the duty becomes refundable as aconsequence of any judgment, decree, order or direction of the appellateauthority, Appellate Tribunal or any Court, the limitation of one year shallbe computed from the date of such judgment, decree, order or direction.It is provided in Section 27(1B)(c) that where any duty is paid provisionallyDunder Section 18, the limitation of one year shall be computed from thedate of adjustment of duty after the final assessment thereof or in thecase of re-assessment, from the date of such re-assessment. The secondproviso to section 27 makes it clear that limitation of 1 year shall notapply where any duty or interest has been paid under protest.E37. Under Section 27(2)(a) it is incumbent upon the applicant tosatisfy that the amount of duty or interest of which refund has beenclaimed, had not been passed by him to any other person, the provisionaims at preventing unjust enrichment.

38. No doubt about it that the expression which was earlier usedFin Section 27(1)(i) that “in pursuance of an order of assessment” hasbeen deleted from the amended provision of Section 27 due to introductionof provision as to self-assessment. However, as self-assessment isnonetheless an order of assessment, no difference is made by deletionof aforesaid expression as no separate reasoned assessment order isGrequired to be passed in the case of self-assessment as observed by thisCourt in Escorts Ltd. v. Union of India & Ors. (supra).

39. In Collector of Central Excise, Kanpur v. Flock (India)Pvt. Ltd. 2000 (120) ELT 285 (SC)= (2000) 6 SCC 650, the questionwhich came up for consideration before this Court was non-challenge H

of an appealable order where the adjudicating authority had passed anorder which is appealable under the statute, and the party aggrieved didnot choose to file an appeal. This Court held that it is not open to theparty to question the correctness of the order of the adjudicating authoritysubsequently by filing a claim for refund on the ground that theadjudicating authority had committed an error in passing the order. Theprovisions 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 scopefor doubt that in a case where an adjudicating authority has passedan order which is appealable under the statute and the partyaggrieved did not choose to exercise the statutory right of filingan appeal, it is not open to the party to question the correctness ofthe order of the adjudicating authority subsequently by filing aclaim for refund on the ground that the adjudicating authority hadcommitted an error in passing its order.If this position is acceptedthen the provisions for adjudication in the Act and the Rules, theprovision for appeal in the Act and the Rules will lose theirrelevance and the entire exercise will be rendered redundant. Thisposition, in our view, will run counter to the scheme of the Act andwill introduce an element of uncertainty in the entire process oflevy and collection of excise duty. Such a position cannot becountenanced. The view was taken by us also gains support fromthe provision in sub-rule (3) of Rule 11 wherein it is laid down thatwhereas a result of any order passed in appeal or revision underthe Act, refund of any duty becomes due to any person, the properofficer may refund the amount to such person without his havingto make any claim in that behalf. The provision indicates theimportance attached to an order of the appellate or revisionalauthority under the Act. Therefore, if an order which is appealableunder the Act is not challenged then the order is not liable to bequestioned and the matter is not to be reopened in a proceedingfor the refund which, if we may term it so, is in the nature ofexecution of a decree/order. In the case at hand, it was specificallymentioned in the order of the Assistant Collector that the assesseemay file an appeal against the order before the Collector (Appeals)if so advised.”

A40. In Priya Blue Industries Ltd. v. Commissioner of Customs(Preventive) 2004 (172) ELT 145 (SC)= (2005) 10 SCC 433, the Courtconsidered unamended provision of Section 27 of the Customs Act anda similar submission was raised which was rejected by this Courtobserving that so long as the order of assessment stands, the duty wouldbe payable as per that order of assessment. This Court has observedBthus:

“6. We are unable to accept this submission. Just such a contentionhas been negatived by this Court in Flock (India) case (2000) 6SCC 650. Once an order of assessment is passed the duty wouldbe payable as per that order. Unless that order of assessment hasCbeen reviewed under Section 28 and/or modified in an appeal,that order stands. So long as the order of assessment stands theduty would be payable as per that order of assessment. A refundclaim is not an appeal proceeding.The officer considering a refundclaim cannot sit in appeal over an assessment made by a competentDofficer. The officer considering the refund claim cannot also reviewan assessment order.

7. We also see no substance in the contention that provision for aperiod of limitation indicates that a refund claim could be filedwithout filing an appeal. Even under Section 11 under the ExciseAct, the claim for refund had to be filed within a period of sixmonths. It was still held, in Flock (India)’s case (supra), that in theabsence of an appeal having been filed no refund claim could bemade.

8. The words “in pursuance of an order of assessment” onlyindicate the party/person who can make a claim for refund. Inother words, they enable a person who has paid duty in pursuanceof an order of assessment to claim the refund. These words donot lead to the conclusion that without the order of assessmenthaving been modified in appeal or reviewed a claim for refundcan be maintained.”

41. It is apparent from provisions of refund that it is more or lessin the nature of execution proceedings. It is not open to the authoritywhich processes the refund to make a fresh assessment on merits andto correct assessment on the basis of mistake or otherwise.H

42. It was contended that no appeal lies against the order of self-assessment. The provisions of Section 128 deal with appeals to theCommissioner (Appeals). Any person aggrieved by any decision or ordermay appeal to the Commissioner (Appeals) within 60 days. There is aprovision for condonation of delay for another 30 days. The provisionsof Section 128 are extracted hereunder:

“128. Appeals to [Commissioner (Appeals)]. — (1) Any personaggrieved by any decision or order passed under this Act by anofficer of customs lower in rank than a [Principal Commissionerof Customs or Commissioner of Customs] may appeal to the[Commissioner (Appeals)] [within sixty days] from the date ofthe communication to him of such decision or order:

[Provided that the Commissioner (Appeals) may, if he is satisfiedthat the appellant was prevented by sufficient cause frompresenting the appeal within the aforesaid period of sixty days,allow it to be presented within a further period of thirty days.]

[(1A) The Commissioner (Appeals) may, if sufficient cause isshown, at any stage of hearing of an appeal, grant time, from timeto time, to the parties or any of them and adjourn the hearing ofthe appeal for reasons to be recorded in writing:

Provided that no such adjournment shall be granted more thanthree times to a party during hearing of the appeal.]

(2) Every appeal under this section shall be in such form and shallbe verified in such manner as may be specified by rules made inthis behalf.”

43. As the order of self-assessment is nonetheless an assessmentorder passed under the Act, obviously it would be appealable by anyperson aggrieved thereby. The expression ‘Any person’ is of wideramplitude. The revenue, as well as assessee, can also prefer an appealaggrieved by an order of assessment. It is not only the order of re-assessment which is appealable but the provisions of Section 128 makeappealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment asper section 2(2), as such, it is appealable in case any person is aggrievedby it. There is a specific provision made in Section 17 to pass a reasoned/speaking order in the situation in case on verification, self-assessment is A

Anot found to be satisfactory, an order of re-assessment has to be passedunder section 17(4). Section 128 has not provided for an appeal againsta speaking order but against “any order” which is of wide amplitude.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 notsustainable in law, is contrary to what has been held by this Court inBEscorts (supra).

44. The provisions under section 27 cannot be invoked in theabsence of amendment or modification having been made in the bill ofentry on the basis of which self-assessment has been made. In otherwords, the order of self-assessment is required to be followed unlessCmodified before the claim for refund is entertained under Section 27.The refund proceedings are in the nature of execution for refundingamount. It is not assessment or re-assessment proceedings at all. Apartfrom that, there are other conditions which are to be satisfied for claimingexemption, as provided in the exemption notification. Existence of thoseDexigencies is also to be proved which cannot be adjudicated within thescope of provisions as to refund. While processing a refund application,re-assessment is not permitted nor conditions of exemption can beadjudicated. Re-assessment is permitted only under Section 17(3)(4)and (5) of the amended provisions. Similar was the position prior to theamendment. It will virtually amount to an order of assessment or re-Eassessment in case the Assistant Commissioner or Deputy Commissionerof Customs while dealing with refund application is permitted to adjudicateupon the entire issue which cannot be done in the ken of the refundprovisions under Section 27. In Hero Cycles Ltd. v. Union of India2009 (240) ELT 490 (Bom.) though the High Court interfered to directFthe entertainment of refund application of the duty paid under the mistakeof law. However, it was observed that amendment to the original orderof assessment is necessary as the relief for a refund of claim is notavailable as held by this Court in Priya Blue Industries Ltd. (supra).

45. Reliance was also placed on a decision of Rajasthan HighGCourt with respect to service tax in Central Office Mewar PalaceOrg. v. Union of India 2008 (12) STR 545 (Raj.). In view of theaforesaid discussion, we are not inclined to accept the reasoning adoptedby the High Court, that too is also not under the provisions of the CustomsAct.

46. The decision in Intex Technologies (India) Ltd. v. Union ofIndia has followed Micromax (supra). The reasoning employed by theHigh Courts of Delhi and Madras does not appear to be sound. Thescope of the provisions of refund under Section 27 cannot be enlarged.It has to be read with the provisions of Sections 17, 18, 28 and 128.

47. When we consider the overall effect of the provisions prior toamendment and post-amendment under Finance Act, 2011, we are ofthe opinion that the claim for refund cannot be entertained unless theorder of assessment or self-assessment is modified in accordance withlaw by taking recourse to the appropriate proceedings and it would notbe within the ken of Section 27 to set aside the order of self-assessmentand reassess the duty for making refund; and in case any person isaggrieved by any order which would include self-assessment, he has toget the order modified under Section 128 or under other relevant provisionsof the Act.

48. Resultantly, we find that the order(s) passed by Customs,Excise, and Service Tax Appellate Tribunal is to be upheld and that passedby the High Courts of Delhi and Madras to the contrary, deserves to beand are hereby set aside. We order accordingly. We hold that theapplications for refund were not maintainable. The appeals areaccordingly disposed of. Parties to bear their own costs as incurred.

Nidhi Jain

Appeals disposed of.