M/S. Ceat Ltd. v. Commissioner Of Customs, Kolkata .

[Order per : P.S. Pruthi, Member (T)]. - The appellant is in appeal against the rejection of refund claim.

2. The appellant imported natural rubber. CVD equivalent to cess was paid by them in respect of Bill of Entry dated 14-3-2003. However, various judgments including those by the Apex Court held that Cess is not payable on the imported rubber. Therefore appellant filed refund claim against duty already paid by them. Asstt. Commissioner held that the refund is not admissible because (i) the assessment made on the Bills of Entry were appealable and had attained finality, no appeal having been filed, (ii) case was hit by unjust enrichment. Ld. Commissioner (Appeals) upheld the order of the Asstt. Commissioner.

3. It is the plea of the ld. Counsel that in terms of the Delhi High Court judgment in case of Aman Medical Products Ltd. v. CCE [ (Delhi)], refund claims are admissible when there is no assessment order on dispute as in the present case. As regards the unjust enrichment, the ld. Counsel contended that they had submitted a certificate from the cost accountant certifying that the amount of cess was not charged in the profit and loss account as expenses, rather it is shown as Cess recoverable.

4. On the other hand, learned AR appearing on behalf of Revenue states that application for refund is not maintainable without challenging to the assessment order as held by the Apex Court in the case of Priya Blue Industries Ltd. v. CC [ (S.C.)]. He also relied upon Hon’ble Supreme Court judgment in the case of Escort Ltd. v. U.O.I. [ (S.C.) which held that the order of assessment on the Bill of Entry is itself an order of assessment and therefore the limitation period will apply from the date on which duty was paid. He also relied on Board’s Circular No. 24/2004, dated 18-3-2004 and case of AVA Food Ltd. v. Commissioner [2007-TIOL-894-CESTAT = (Tri. - Bang.)]. On the aspect of unjust enrichment, he stated that CA certificate has been submitted well after the order-in-appeal rejecting the refund application.

5. We have carefully considered the facts and submissions made by both sides.

6. On the first issue as to whether refund application is maintainable without review of the assessment, appellant have relied on the case of Aman Medical Products Ltd. (supra). This judgment dealt with refund claim under Section 27 which is reproduced below for convenience.

“27. Claim for refund of duty. - (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.”

We find that in the case of Aman Medical Products (supra), it was held that -

“5. The Tribunal has referred to the cases of CCE, Kanpur v. Flock (India) Pvt. Ltd. [] and Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive), (S.C.). In both these cases, referred to by the Tribunal there was an assessment order which was passed and consequently it was held that where an adjudicating authority passed an order which is appealable and the party did not chose to exercise the statutory right of 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 adjudicating authority had committed an error in passing his order. These judgments will therefore not apply when there is no assessment order on dispute/contest, like as is in the facts of the present case”.

We are not able to appreciate the Hon’ble High Court judgment in the face of the Hon’ble Supreme Court Judgment in case of Escorts Ltd. (supra) wherein the Apex Court held that

The bill of entry presented by the appellant was signed, signifying approval by the assessing officer. That itself is an order of assessment in such a situation. We are, therefore, not prepared to agree that there is no order of assessment in this case, and therefore, the limitation prescribed in Section 27 did not begin to run. Section 27 is emphatic in language. It says that an application for refund of duty shall be made before the expiry of six months from the date on which the duty was paid. In the face of this provision, the authorities under the Act, including the Government of India, had no option but to dismiss the appellant’s application. This is also the view taken by this Court in Madras Rubber Factory v. Union of India [ (S.C.) = 1976 (2) SCC 86]

The Hon’ble Supreme Court decision takes precedence over the High Court Judgments. In our view the decision of Apex Court in the case of Priya Blue Industries Ltd. (supra) puts the issue beyond the doubt. The Supreme Court held that once the order of the assessment is passed and unless that order is reviewed under Section 28 or modified in appeal, that order stands and the officer considering the refund claim cannot stand in appeal over the assessment made by competent officers. We may respectfully observe that clause (ii) under Section 27 reproduced above does not apply in the present case because duty is paid by the appellant in pursuance of order of assessment, therefore appellant’s appeal on this point is rejected.

6.1 The last ground taken by the appellant is that claim is not hit by the unjust enrichment because they had produced a certificate from Cost Accountant stating that cess paid is shown as recoverable in their balance sheet. This ground has been taken only at the stage of the appeal before this Tribunal. In any case without deciding whether this ground should be taken up at this stage or not, as we have already decided the matter against the appellant on the first issue, we do not find it necessary to discuss the second issue. In view of the above, the appeal is liable to be dismissed.

7. Appeal dismissed.

(Pronounced in Court on 11-9-2015)