Customs duty refund cannot be refused solely for lack of appeal where levy was contrary to the exemption notification.

Refund of customs duty cannot be denied merely because the bills of entry were not separately challenged where the imported goods were covered by a prevailing exemption notification and duty was collected without lawful basis. The operative principle is that an unlawful levy does not become immune from refund only because no appeal was filed against the assessment, if the collection itself lacked legal support. On that reasoning, the refund claim remained maintainable and rejection on the sole ground of failure to challenge the bills of entry was not justified.

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Issues: Whether refund of customs duty could be denied merely because the bills of entry were not challenged when the goods were assessable to exemption under the prevailing notification.

Analysis: The imported goods were covered by the exemption notification in force, and the assessing officer ought not to have levied duty. The duty had been collected without lawful basis. In such circumstances, the assessee's omission to file an appeal against the bills of entry did not defeat the refund claim, since the collection itself was not legally sustainable.

Conclusion: The refund claim was maintainable and the rejection of refund on the ground of challenge to the bills of entry was not justified.

Final Conclusion: The appeal by the Revenue failed, and the order granting refund was upheld.

Ratio Decidendi: Where duty is collected contrary to a prevailing exemption notification, refund cannot be refused solely on the ground that no appeal was filed against the assessment or bill of entry.

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