CUSTOMS ACT, 1962

Section 27

Claim for refund of duty - Allowability - Whether an assessment order has to be first challenged before a refund claim can be filed under section 27 -

Issue was as regards refund of excess customs duty paid. Refund was rejected on allegation that before filing a refund claim, assessee should have first challenged the assessment of the bills of entry which they did not do. Issue arose as to whether assessee was entitled to refund of excess duty paid when the bills of entry are finalized. Held: Apex Court in Flock India Pvt. Ltd., [2000 TaxPub(EX) 1518 (SC)] and Priya Blue Industries Ltd., [2004 (170) ELT A308 (SC)] held that assessment order has to be first challenged before a refund claim can be filed under section 27. Reason for this is the Officer sanctioning the refund cannot sit in judgment on the assessment done by the AO. An assessment is a quasi judicial function exercised by AO against which an appeal lies before the CCE(A) and not before Officer sanctioning the refund. Sanction of refund is a mere mechanical process of seeing if duty was paid in excess and refunding the same. No refund can be claimed in respect of any assessment including self assessment unless the assessment itself is challenged and set aside by the appellate authority.

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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