Refund claims contrary to assessment orders not maintainable without prior modification under Section 28

The SC partially heard an appeal challenging HC's dismissal of department's appeal as not maintainable. CESTAT South Zonal Bench applied SC precedent from Priya Blue Industries case, ruling that refund claims contrary to assessment orders are not maintainable without prior modification through appeal or review under Section 28 of Customs Act, 1962. Given the differential duty of Rs. 11,03,844 involved, the Court disposed of the civil appeal while maintaining CESTAT's order and expressly leaving open the question of law. All pending applications were disposed of accordingly.

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The Supreme Court, in a partial bench comprising Hon'ble Justices Prashant Kumar Mishra and Manmohan, heard an appeal challenging the High Court's dismissal of the department's appeal as not maintainable, with liberty to approach the Supreme Court. The CESTAT South Zonal Bench relied on this Court's precedent in Priya Blue Industries Ltd. v. CC (Preventive), 2004 (172) ELT 145 (SC), holding that a refund claim "contrary to assessment order is not maintainable without order of assessment having been modified in appeal or review under Section 28 of the Customs Act, 1962." Given the differential duty involved (Rs. 11,03,844), the Court disposed of the civil appeal by maintaining the CESTAT order, expressly "leaving open the question of law." Pending applications were disposed of accordingly.

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