ORDER
R.K. Abichandani, J. (President)
These two appeals are directed against the order of Commissioner (Appeals) upholding the order-in-original rejecting the refund claim of Rs. 12,91,520/- of the appellant under Section 27 of the Customs Act, 1962.
2. The short question that arises before us in these appeals is whether such refund claim could be entertained without challenging the assessment order. Admittedly, the assessment order, which appeared on the bill of entry was never challenged by the appellant. The Commissioner (Appeals) relying on the decision of the Hon’ble Supreme Court in CCE Kanpur v. Flock (India) Pvt. Ltd. , negatived the refund claim on the ground that the assessment was not appealed against by the present appellant.
3. The learned Counsel for the appellant submitted that making of refund application was sufficient and that even without challenging the assessment order the application could be entertained under the provisions of Section 27 of the Act. He relied upon the decision of Hon’ble the Supreme Court in the case of Karnataka Power Corporation Ltd. v. Commissioner of Customs (Appeals) , for pointing out that the Supreme Court holding that, the amendment sought before the Assistant Collector ought to have been considered and decided and setting aside the orders of the lower authorities, gave a direction to the Assistant Collector to decide the matter afresh on the basis of the claim of the appellant seeking re-classification. The learned Counsel relied upon the following decisions in support of his contention that the refund application under Section 27, was maintainable without challenging the bill of entry assessment separately:
(a) Faxtel Systems (India) Pvt. Ltd. v. Commissioner of Customs, Cochin, reported in 2004 (169) ELT 265.
(b) Albert David Ltd. v. Commissioner of Customs, New Delhi .
4. The learned authorized representative for the department, on the other hand, relying on the decisions of Hon’ble the Supreme Court in Flock (India) Pvt. Ltd. (supra) and Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive) , submitted that the Commissioner (Appeals) was justified in relying upon the decision of Flock (India) Ltd. (supra) the ratio of which was reiterated in the context of Section 27 of the Customs Act, 1962, in Priya Blue Industries Ltd. (supra)
5. Since Priya Blue Industries Ltd. was rendered in the context of the provisions of Section 27 of the Customs Act, 1962, we would prefer to reproduce paragraphs 5 and 6 of the judgment to point out its ratio which, in no certain terms, lays down that so long as the order of assessment stands, the duty would be payable as per that order and refund claim cannot be filed without the order of assessment being reviewed or modified:
5. 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 without filing an Appeal.
6. 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.
6. The contention that three Judges Bench in Karnataka Power Corporation (supra) has taken a contrary view on this issue is not borne out from that judgment. Reliance was placed on paragraph 2 of the judgment in Karnataka Power Corporation Ltd. in support of the contention that the earlier view in Flock (India) Pvt. Ltd. was departed from by the Larger Bench. In paragraph 2 of the judgment in Karnataka Power Corporation Ltd., the Hon’ble Supreme Court made the following observations :
2. It is plain from what has been stated above, the Tribunal has misdirected itself. There is no question but that the appellants had sought amendment before the Assistant Collector of Customs himself and it was in that light that the issue had to be decided. We are of the view, therefore, that the orders of the Assistant Collector of Customs, the Collector (Appeals) and the Tribunal must be set aside and the matter restored to file of the Assistant Collector of Customs to be decided afresh on the basis of the claim of the appellants contained in the letters dated 27th August, 1994/25th August, 1994.
It will be noticed from paragraph 2 of the judgment, that no reference whatsoever has been made to the issue as to whether refund claim could be made without challenging the assessment order. Since Hon’ble the Supreme Court was not addressing that controversy, the observations made in paragraph 2 in a different context can never be construed, to be impliedly overruling the ratio laid down in Flock (India) Pvt. Ltd. as subsequently reiterated in Priya Blue Industries Ltd. specifically in the context of the provisions of Section 27 of the Customs Act, 1962. Since Priya Blue Industries Ltd. has been decided after the decision in Karnataka Power Corporation Ltd., there is no scope for the contention that ratio of Flock (India) Pvt. Ltd. was impliedly overruled in Karnataka Power Corporation Ltd., because if that were so, it would not have been reiterated in Priya Blue Industries Ltd. We, therefore, find no substance in these appeals.
7. The appeal was preferred against the order-in-original of assessment was admittedly filed beyond the period of condonable delay as it was filed eleven months after the date of assessment.
8. For the foregoing reasons, these appeals are dismissed.
(Dictated and pronounced in the open Court)