Refund of customs duty requires first challenging the assessment; a refund authority cannot reopen a subsisting assessment.

Refund of customs duty and CVD could not be granted while the assessment order remained operative and unchallenged. The bill of entry reflected a claimed exemption from basic customs duty and CVD, but the assessing officer allowed only the basic customs duty exemption and assessed duty accordingly. A refund proceeding could not be used to reopen that assessment or treat the denial of CVD exemption as a clerical error. The settled principle applied was that an assessment binds the parties unless it is set aside or modified in appropriate appellate proceedings, so the refund authority could not effectively sit in appeal over a subsisting assessment. The refund claim was therefore not maintainable.

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Issues: Whether refund of customs duty and CVD could be granted without first challenging the assessment order.

Analysis: The bill of entry and check-list showed a claim for exemption from basic customs duty under one notification and for exemption from CVD under another. The assessment allowed the basic customs duty exemption but denied the CVD exemption and determined duty accordingly. The refusal was not treated as a clerical error in computer processing. The refund authority could not alter an assessment made by the assessing officer of equal rank, and a refund proceeding could not be used to bypass the finality of the assessment. The settled rule applied was that an assessment order continues to bind the parties unless it is set aside or modified in appeal.

Conclusion: The refund claim was not maintainable without challenging the assessment order, and the rejection of refund was in law.

Final Conclusion: The appeal failed because the assessed duty liability remained operative and could not be reopened in refund proceedings.

Ratio Decidendi: A refund authority cannot sit in appeal over a subsisting assessment order, and refund of duty cannot be claimed unless the assessment is first set aside or modified in appropriate appellate proceedings.

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