TaxTMI 
TaxTMI 
2019 (9) TMI 802
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....PPEAL NO. 7392 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO. 15175 OF 2017) CIVIL APPEAL NO. 18765 OF 2017 CIVIL APPEAL NO. 7393 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO. 31561 OF 2017) CIVIL APPEAL NOS. 739496 OF 2019 (@ SPECIAL LEAVE PETITION (C) NOS. 50405042 OF 2018) CIVIL APPEAL NO. 7397 OF 2019 (@ SPECIAL LEAVE PETITION (C) NO. 15363 OF 2018) CIVIL APPEAL NO. 10082 OF 2018 Justice Arun Mishra, Justice Navin Sinha And Justice Indira Banerjee JUDGMENT ARUN MISHRA, J. 1. These appeals have been preferred by the assessees as well as by the Union of India aggrieved by the judgment and order passed by the High Courts and Customs, Excise and Service Tax Appellate Tribunal, Kolkata (for short referred to as "the Tribunal"). 2. The question involved in these appeals is whether in the absence of any challenge to the order of assessment in appeal, any refund application against the assessed duty can be entertained? 3. The tribunal has in the case of ITC Limited opined that unless the order of assessment is appealed, no refund application against the assessed duty can be entertained. On the other hand, in the cases in which Union of India or the Department has come up in ap....
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....r passed thereon by the authority concerned, even where an order of assessment may not have been reviewed or modified in appeal. Reliance has been placed on the case of Aman Medical Products Limited v. Commissioner of Customs, Delhi, 2010 (250) ELT 30 (Del). 7. The facts of the case of ITC Limited are that the appellants manufacture paper from both conventional and unconventional raw materials. In the course of the manufacturing activity, waste paper/ broke arises which are recycled in the manufacturing process by making pulp. Sometimes, after entry in the RG 1 register, the paper is found to be defective and incapable of being sold and as such is required to be reprocessed and if that is not possible, then it is rejected and has to be repulped and recycled. 8. The appellant had been paying duty on paper cleared from its factory. The rate of duty of paper manufactured from conventional and unconventional raw material differed. The appellants availed exemption under Notification No. 67/95CE dated March 16, 1995 as to the duty in respect of waste paper/ fresh broke. By Notification No. 6/2000-CE dated March 1, 2000 complete exemption was granted in respect of paper up....
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....t Scheme under section 17 of the Act and were thus finally assessed. This Court in M/s. SRF v. Commissioner of Customs, Chennai 2015 [318] ELT 607 (SC) held that for quantification of CVD in case of an article that has been imported, it has to be presumed that the said imported article has been manufactured in India and then the amount of excise duty leviable thereon has to be ascertained for determining the extent of exemption from payment of CVD to which the importer would be entitled. The respondent had filed the refund claim of Rs. 35.89 crores for duty totally paid under the selfassessed bills of entry, under section 27 of the 1962 Act in the Air Cargo Export Commissionerate, claiming a refund of the Additional Customs Duty (CVD) in view of Serial Number 263 A and Condition No. 16 of notification No. 12/2002Ex. Dated 17.03.2012 and for the said Condition No. 16, mobile handsets were chargeable to a duty of 1% if no CENVAT credit had been availed by the importer. The Micromax claimed that they had made excess payment while complying with the condition No. 16 of the aforesaid notification. They claimed the refund of deferential duty of 5%. The Assistant Commi....
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....oms Act provided that claim for refund to be made by any person who had (a) paid duty in pursuance of an order of assessment or (b) a person who had borne the duty. Earlier, there was a necessity for an order of assessment by a proper officer under section 17 of the Customs Act. After the amendment to the Act in 2011, there is no need to get the assessment of bill of exchange done for claiming a refund of excess duty paid under Section 27 of the Act, as now the bill of entry is to be selfassessed by the importer or exporter and will be subject to verification. Further, under section 17(4) of the Customs Act if it is found that self-assessment of duty has not been done correctly by an importer or exporter the proper officer, may reassess the duty. In case of reassessment within fifteen days from the date of reassessment under section 17(5), a speaking order has to be passed by the proper officer. In the case of reassessment done under section 17(4), it is only in these circumstances an order is passed. If no order of assessment is passed in the case of self-assessment, the refund application can lie. It was urged that section 27 has also been amended by way of amendment by the Finan....
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....ll of Entry has been appealed against. In the absence of such a statutory condition, a restriction on refund claim cannot be imported into the statute. Taxing statute has to be strictly interpreted and there is no room to infer any intendment thereof as held by this Court in Commissioner of Wealth Tax, Gujarat III Ahmedabad v. Ellis Bridge Gymkhana, (1998) 1 SCC 384. Reliance has also been placed on the decision of this Court in Maharashtra State Financial Corporation v. Jaycee Drugs and Pharmaceuticals (P.) Ltd. (1991) 1 SCC 637, O.P. Singla & Anr. v. Union of India & Ors., (1984) 4 SCC 450, and Union of India v. Popular Construction Co., (2001) 8 SCC 470. 18. It was also urged that section 27 is a remedy available to the assessee for the refund of duty paid and section 28 is a remedy available to the Department on the recovery of duty not levied and short levied or erroneously levied. Both the remedies can be availed without filing appeals. It was further urged that no appeal can be filed under section 128 of the Customs Act against the bill of entry. As the scheme of assessment under Section 17 of the Customs Act is that of self-assessment and only when such a self-assessment....
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....sessment passed under section 2(2) of the Act is appealed before Commissioner of Appeals for modification no claim for refund can be entertained. The provision of section 128 cannot be rendered otiose. The amendment has been made in order to simplify the procedure but the legal effect of the self-assessment is that of assessment. While processing self-assessment some exercise has to be done. Once it is accepted, it becomes an order of assessment. 20. Right to appeal is available to any person i.e. to the department as well as to importer/exporter against an order of self-assessment. Until and unless assessment order is modified and a fresh order of assessment is passed and duty redetermined, the refund cannot be granted by way of refund application. The refund authorities cannot take over the role of Assessing Officer. The officer considering refund claim cannot reassess an assessment order. An assessment order has to be questioned within the stipulated period of limitation. The refund application cannot be entertained directly under section 27 unless the order of assessment is appealed against and is modified. 21. The first question for consideration is whether the assessmen....
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.... assessed to duty on the basis of the statements made in the entry relating thereto and the documents produced and the information furnished under subsection (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be reassessed to duty. (5) Where any assessment done under subsection (2) is contrary to the claim of the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification therefor under this Act, and in cases other than those where the importer or the exporter, as the case may be, confirms his acceptance of the said assessment in writing, the proper officer shall pass a speaking order within fifteen days from the date of assessment of the bill of entry or the shipping bill, as the case may be." 25. Section 17 as amended by Finance Act, 2011 is extracted hereunder: "17. Assessment of duty. - (1) An importer entering any i....
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....od immediately before the date on which such assent is received.]" (emphasis supplied) 26. Section 27 deals with a claim for refund of duty. Provision of section 27 which prevailed before amendment by Finance Act, 2011 is extracted hereunder: "27. (1) Any person claiming refund of any duty- (i) paid by him in pursuance of an order of assessment; or (ii) borne by him, may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs (a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, before the expiry of one year ; (b) in any other case, before the expiry of six months, from the date of payment of duty and interest, if any, paid on such duty, in such form and manner as may be specified in the regulations made in this behalf and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of d....
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.... an application for refund has been made before the date on which the Finance Bill, 2011 receives the assent of the President, such application shall be deemed to have been made under subsection (1), as it stood before the date on which the Finance Bill, 2011 receives the assent of the President and the same shall be dealt with in accordance with the provisions of subsection (2): Provided further that the limitation of one year shall not apply where any duty or interest has been paid under protest. Provided also that where the amount of refund claimed is less than rupees one hundred, the same shall not be refunded. Explanation. For the purposes of this subsection, "the date of payment of duty or interest'' in relation to a person, other than the importer, shall be construed as "the date of purchase of goods" by such person. (1A) The application under subsection (1) shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty or interest, in relation to which such refund is claimed was collected from, or paid by, him and the....
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....ass of applicants as the Central Government may, by notification in the Official Gazette, specify: (g) the duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made where (i) such excess payment of duty is evident from the bill of entry in the case of self-assessed bill of entry; or (ii) the duty actually payable is reflected in the reassessed bill of entry in the case of reassessment. Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty and interest, if any, paid on such duty has not been passed on by the persons concerned to any other person. (3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal, the National Tax Tribunal or any Court or in any other provision of this Act or the regulations made thereunder or any other law for the time being in force, no refund shall be made except as provided in subsection (2). (4) Every notification under clause (f) of the first proviso to Sub-section (2) shall b....
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.... by the proper officer, the amount of duty along with the interest payable thereon under section 28AA or the amount of interest which has not been so paid or partpaid: Provided that the proper officer shall not serve such show cause notice, where the amount involved is less than rupees one hundred." (emphasis supplied) 29. The first question for consideration is whether in the case of self-assessment without passing a speaking order, it can be termed to be an order of self-assessment. It was urged on behalf of the assesses that there is no application of mind and merely an endorsement is made by the authorities concerned on the bill of entry which cannot be said to be an order much less a speaking order. 30. In Escorts Ltd. v. Union of India & Ors. (1994) Supp. 3 SCC 86 the question arose for consideration as to the Bill of Entry classifying the imported goods under a certain tariff item and paying the duty thereon. This Court held that in such a case signing of the bill of entry itself amounted to passing an order of assessment. Hence, the application seeking a refund on the ground that imported goods fell under a different item attracting a far lower rate ....
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.... the aforesaid discussion that the endorsement made on the bill of entry is an order of assessment. It cannot be said that there is no order of assessment passed in such a case. When there is no lis, speaking order is not required to be passed in "across the counter affair". 32. Coming to the procedure of assessment of duty as prevailed before the amendment of the Act prior to the amendment made in section 17(1) by the Finance Act of 2011, the imported goods or exported goods were required to be examined and tested by the proper officer. After such examination, he had to make an assessment of the duty, if any, leviable on these goods. Under subsection (3) of section 17, the proper officer was authorized to require the importer, exporter or any other person to produce any contract, broker's note or any other document as specified in the proviso and to furnish any required information. Notwithstanding that the statements made in the bill of entry relating thereto and the documents produced and the information furnished under subsection (3); but if it was found subsequently on examination or testing of the goods or otherwise that any statement in such bill of entry or document ....
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....d for refund procedure. Any person could claim a refund of duty and interest if any paid on such duty. Refund of duty and interest if any paid pursuant to the order of assessment or borne by him, may make an application for refund of such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs within one year in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital. In any other case before the expiry of six months from the date of payment of duty and interest. He has to further satisfy that he has not passed on such liability to any other person. The limitation of one year or six months shall not apply where any duty and interest has been paid under protest. It is made clear by the second proviso to section 27 that in case of refund becomes necessary as a consequence of judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year or six months shall commence from the date of such judgment, decree, order or direction. 36. Section 27 of the Customs Act as amended by Finance Act, 2011 provides th....
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....came up for consideration before this Court was nonchallenge of an appealable order where the adjudicating authority had passed an order which is appealable under the statute, and the party aggrieved did not choose to file an appeal. This Court held that it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing the order. The provisions of the Central Excise Act, 1944 came up for consideration. The Court has observed: "10. Coming to the question that is raised, there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing its order. If this position is accepted then the provisions for adjudication in the Act and the Rules, the provi....
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....o see no substance in the contention that provision for a period of limitation indicates that a refund claim could be filed without filing an appeal. Even under Section 11 under the Excise Act, the claim for refund had to be filed within a period of six months. It was still held, in Flock (India)'s case (supra), that in the absence of an appeal having been filed no refund claim could be made. 8. The words "in pursuance of an order of assessment" only indicate the party/person who can make a claim for refund. In other words, they enable a person who has paid duty in pursuance of an order of assessment to claim the refund. These words do not lead to the conclusion that without the order of assessment having been modified in appeal or reviewed a claim for refund can be maintained." (emphasis supplied) 41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. 42. It was contended that no appeal lies against the order of self-assessment. The provisions of ....
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....der" which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts (supra). 44. The provisions under section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or reassessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, reassessment is not permitted nor conditions of exemption can be adjudicated. Reassessment is permitted only under Section 17(3)(4) and (5) of the amended provision....