Tribunal remands case, allows refund claim, directs assessment. Applicable Section 27.

The Tribunal allowed the appeal by remanding the case, setting aside the lower authorities' rejection of the appellant's refund claim. The original authority was directed to assess the appellant's entitlement to the claimed exemption and issue a reasoned order. The refund of the excess CVD payment was to be considered consequent to this determination. The Tribunal held that the appellant's refund application was maintainable under Section 27, as the duty was borne by the appellant, even though not paid pursuant to an assessment order.

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Issues Involved:
1. Challenge or contest of the assessment order as a condition precedent for claiming a refund of duty.
2. Applicability of the judgments of Priya Blue Industries Ltd. and Flock (India) Pvt. Ltd. in denying the refund benefit.

Detailed Analysis:

1. Challenge or Contest of the Assessment Order:
The primary issue is whether the appellant needs to challenge or contest the assessment order to claim a refund of duty, especially since the duty was paid under protest. The appellant argued that the authorities should have assessed the refund claim based on the admissibility of the exemption notification No. 03/2005-CE dated 24.02.2005, instead of outright rejecting it. The appellant cited the judgment in Bansal Alloys & Metals Pvt. Ltd. to support this argument.

The Tribunal noted that Section 27 of the Customs Act, 1962 provides two alternatives for claiming a refund: duty paid in pursuance of an order of assessment or borne by the person concerned. The appellant had paid the excess duty under protest and had objected to the assessment made by the authorities. The Tribunal agreed that the appellant's case falls under the second alternative provided in Section 27, i.e., 'borne by him'. The Tribunal referenced the judgment in Aman Medical Products Ltd., where the Delhi High Court held that a refund claim is maintainable under Section 27 even if the duty was borne by the importer and not necessarily paid pursuant to an order of assessment.

The Tribunal concluded that the filing of the refund claim itself should be considered a challenge to the assessment of the Bills of Entry, which is detrimental to the appellant's claim. The Tribunal also noted that the authorities had not addressed the appellant's request for CVD exemption and that the refund claim should trigger re-assessment.

2. Applicability of Priya Blue Industries Ltd. and Flock (India) Pvt. Ltd.:
The Tribunal examined whether the judgments in Priya Blue Industries Ltd. and Flock (India) Pvt. Ltd. apply to the appellant's case. In Priya Blue Industries Ltd., the Supreme Court held that without modifying the order of assessment in appeal or review, a refund claim cannot be maintained. However, the Tribunal found that the specific issue of the second alternative in Section 27, i.e., 'borne by the importer', was not raised in that case. The Tribunal held that since the appellant had borne the incidence of CVD, the refund application is maintainable under Section 27.

Similarly, in Flock (India) Pvt. Ltd., the Supreme Court held that it is not open to a party to question the correctness of an adjudication order by subsequently filing a refund claim. However, the Tribunal distinguished this case from the present one, noting that no speaking order was passed by the authorities regarding the appellant's entitlement to the CVD exemption.

The Tribunal also referenced the judgment in Aman Medical Products Ltd., where the Delhi High Court held that non-filing of an appeal against the assessed Bill of Entry does not deprive the appellant of the right to file a refund claim under Section 27. The Tribunal noted that a Special Leave Petition against this decision was admitted by the Supreme Court, but no stay was granted, making the judgment applicable.

Conclusion:
The Tribunal concluded that the rejection of the appellant's refund claim on the grounds mentioned by the lower authorities is not sustainable. The impugned order was set aside, and the original authority was directed to examine the issue of the appellant's entitlement to the claimed exemption and pass a reasoned order on merit. The claim for a refund of the excess CVD payment will be considered as a consequence of this determination. The appeal was allowed by way of remand.

Pronounced in the open Court on 28/11/2017.

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