Importer entitled to refund for excess duty paid under Section 27(1)(ii) where payment made without assessment

HC held that an importer who paid excess duty in ignorance of a concessional notification is entitled to refund under Section 27(1)(ii) of the Customs Act, 1962. Where duty was paid without an adversarial assessment order or lis, non-filing of an appeal against the assessed Bill of Entry does not bar a refund claim. The Court found the case within Section 27's scope for payments made without assessment and set aside the CESTAT decision, allowing the refund claim to proceed.

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Issues:
Whether an assessee who pays higher duty by inadvertence is entitled to a refund of the excess duty paid without filing an appeal against the order for depositing duty on filing the bill of entry.

Analysis:
The main issue in this case was whether an assessee who mistakenly pays a higher duty rate, without taking advantage of a concessional rate due to ignorance, is entitled to a refund of the excess duty paid without filing an appeal against the order for depositing duty on filing the bill of entry. The Customs Excise and Service Tax Appellate Tribunal (CESTAT) had held that a payment of duty must be pursuant to an assessment order before a refund in appeal can be requested under Section 27 of the Customs Act, 1962.

The court framed the question of law as to whether the non-filing of an appeal against the assessed Bill of Entry, where there was no dispute between the importer and the revenue at the time of payment of duty, would deprive the importer of the right to file a refund claim under Section 27 of the Customs Act, 1962. The court analyzed Section 27, which allows for a refund of duty paid in pursuance of an order of assessment or duty borne by the person. It was noted that the duty paid need not necessarily be pursuant to an order of assessment but can also be borne by the person.

The court distinguished previous cases where an assessment order was in dispute, stating that in the present case, there was no assessment order for challenge as there was no contest or lis, and hence no adversarial assessment order. Therefore, the judgments cited by the Tribunal regarding the non-filing of appeals against assessment orders did not apply in this scenario. The court concluded that the refund claim of the appellant was maintainable under Section 27 of the Customs Act, and the non-filing of an appeal against the assessed bill of entry did not deprive the appellant of the right to file a refund claim under Section 27.

In the final judgment, the court set aside the CESTAT's order and upheld the Commissioner of Customs Appeal's order, remanding the matter to the original authority for further examination in accordance with the law after providing the appellant with a due opportunity.

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