17 September 2004
Supreme Court
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M/S. PRIYA BLUE INDUSTRIES LTD. Vs COMMNR. OF CUSTOMS (PREVENTIVE)

Bench: S.N. VARIAVA,H. K. SEMA
Case number: R.P.(C) No.-000096-000096 / 2004
Diary number: 26911 / 2003
Advocates: Vs P. PARMESWARAN


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CASE NO.: Review Petition (civil)  96 of 2004

PETITIONER: M/s. Priya Blue Industries Ltd.

RESPONDENT: Commissioner of Customs (Preventive)

DATE OF JUDGMENT: 17/09/2004

BENCH: S.N. VARIAVA & H. K. SEMA

JUDGMENT: J U D G M E N T

In Civil Appeal No. 9045 of 2003

S. N. VARIAVA, J.

               By this Review Petition, an Order dated 14th November,  2003 is sought to be reviewed.                   The facts necessary for the purposes of this Order are as  follows: The Petitioners had imported a ship for breaking purposes.   They filed  a Bill of Entry.  The amount of duty payable was assessed.  The  Petitioners paid the duty under protest.        They then filed a Claim for  refund of Rs. 79,64,648/- on the ground that duty had been wrongly  levied.   Their refund was rejected on 30th August, 2000.  The Appeal  filed by them was rejected on 31st October, 2001.  The further Appeal  filed before the Customs, Excise and Gold (Control) Appellate Tribunal  (CEGAT) was dismissed by the Tribunal on 28th May, 2002.  The  Tribunal followed the Judgment of this Court in the case of Collector of  Central Excise vs. Flock (India) Pvt. Ltd. reported in (2000) 6 SCC  650.  The Tribunal held that as no Appeal had been filed against the  Assessment Order the refund claim was not maintainable.          The Civil  Appeal filed before this Court was dismissed by our Order dated 14th  November, 2003.                 As it has been contended that the provisions of the  Customs Act, 1962 are not in para-materia with the provisions of the  Excise Act and that the Judgment of this Court in Flock (India)’s case  (supra) would not be applicable, notice was issued.                 We have heard parties at great length.                 Under Section 27 of the Customs Act, 1962 a claim for  refund can 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.  It  has been strenuously submitted that the words "in pursuance of an  Order of Assessment" necessarily imply that a claim for refund can be  made without challenging the Assessment in an Appeal.  It is  submitted that if the assessment is not correct, a party could file a  claim for refund and the correctness of the Assessment Order can be  examined whilst considering the claim for refund.  It was submitted  that the wording of Section 27, particularly, the provisions regarding  filing of a claim for refund within the period of 1 year or 6 months also  showed that a claim for refund could be made even though no Appeal  had been filed against the Assessment Order.   It was submitted that if  a claim for refund could only be made after an Appeal was filed by the  party, then the provisions regarding filing of a claim within 1 year or 6  months would become redundant as the Appeal proceedings would  never be over within that period.  It was submitted that in the claim  for refund the party could take up the contention that the Order of  Assessment was not correct and could claim refund on that basis even

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without filing an Appeal.                 We are unable to accept this submission.  Just such a  contention has been negatived by this Court in Flock (India)’s case  (supra).     Once an Order of Assessment is passed the duty would be  payable as per that order.   Unless that order of assessment has been  reviewed under Section 28 and/or modified in an Appeal that Order  stands.  So long as the Order of Assessment stands the duty would be  payable as per that Order of Assessment.   A refund claim is not an  Appeal proceeding.  The Officer considering a refund claim cannot sit  in Appeal over an assessment made by a competent Officer.  The  Officer considering the refund claim cannot also review an assessment  order.                    We also see no substance in the contention that provisions  for a period of limitation indicates that a refund claim could be filed  without filing an Appeal.  Even under Rule 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.                 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 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.                   In our view, the ratio in Flock (India)’s case (supra) fully  applies.  We, therefore, see no substance in the Review Petition.    Accordingly, the Review Petition stands dismissed with no order as to  costs.