M/S. Priya Blue Industries
Ltd. Vs. Commissioner of Customs  Insc 554 (17 September 2004)
S.N. Variava & H. K. Sema
In Civil Appeal No. 9045 of 2003 S. N. Variava, J. By This Review Petition, An
Order Dated 14th November, 2003 Is Sought To Be Reviewed.
The facts necessary for the purposes of this Order are as follows:
The Petitioners had imported a ship for breaking purposes. They filed a Bill
of Entry. The amount of duty payable was assessed. The Petitioners paid the
duty under protest. They then filed a Claim for refund of Rs. 79,64,648/- on
the ground that duty had been wrongly levied. Their refund was rejected on 30th August, 2000. The Appeal filed by them was rejected on 31st October, 2001. The further Appeal filed before the Customs, Excise and Gold (Control) Appellate Tribunal
(CEGAT) was dismissed by the Tribunal on 28th May, 2002. The Tribunal followed the Judgment of this Court in the case of Collector of Central Excise
vs. Flock (India) Pvt. Ltd. reported in (2000) 6 SCC 650. The Tribunal held
that as no Appeal had been filed against the Assessment Order the refund claim
was not maintainable. The Civil Appeal filed before this Court was dismissed by
our Order dated 14th November, 2003.
As it has been contended that the provisions of the Customs Act, 1962
are not in para-materia with the provisions of the Excise Act and that the
Judgment of this Court in Flock (India)'s case (supra) would not be applicable,
notice was issued.
We have heard parties at great length.
Under Section 27 of the Customs Act, 1962
a claim for refund can be made by any person who had (a) paid duty in pursuance
of an Order of Assessment or (b) a person who had borne the duty. It has been
strenuously submitted that the words "in pursuance of an Order of
Assessment" necessarily imply that a claim for refund can be made without
challenging the Assessment in an Appeal. It is submitted that if the assessment
is not correct, a party could file a claim for refund and the correctness of
the Assessment Order can be examined whilst considering the claim for refund.
It was submitted that the wording of Section 27, particularly, the provisions regarding
filing of a claim for refund within the period of 1 year or 6 months also
showed that a claim for refund could be made even though no Appeal had been
filed against the Assessment Order. It was submitted that if a claim for refund
could only be made after an Appeal was filed by the party, then the provisions
regarding filing of a claim within 1 year or 6 months would become redundant as
the Appeal proceedings would never be over within that period. It was submitted
that in the claim for refund the party could take up the contention that the
Order of Assessment was not correct and could claim refund on that basis even
without filing an Appeal.
We are unable to accept this submission. Just such a contention has been negatived
by this Court in Flock (India)'s case (supra). Once an Order of Assessment is
passed the duty would be payable as per that order. Unless that order of
assessment has been reviewed under Section 28 and/or modified in an Appeal that
Order stands. So long as the Order of Assessment stands the duty would be
payable as per that Order of Assessment. A refund claim is not an Appeal
proceeding. The Officer considering a refund claim cannot sit in Appeal over an
assessment made by a competent Officer. The Officer considering the refund claim
cannot also review an assessment order.
We also see no substance in the contention that provisions for a period of
limitation indicates that a refund claim could be filed without filing an
Appeal. Even under Rule 11 under the Excise Act the claim for refund had to be
filed within a period of six months. It was still held, in Flock (India)'s case
(supra), that in the absence of an Appeal having been filed no refund claim
could be made.
The words "in pursuance of an Order of assessment" only indicate
the party/person who can make a claim for refund. In other words, they enable a
person who has paid duty in pursuance of an Order of assessment to claim
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
In our view, the ratio in Flock (India)'s case (supra) fully applies. We,
therefore, see no substance in the Review Petition.
Accordingly, the Review Petition stands dismissed with no order as to costs.