Legal principle

After the Finance Act, 2011 amendments, a refund claim under Section 27 of the Customs Act is maintainable on proof that the duty was paid or borne by the claimant, without any need to first challenge or get the self-assessed bill of entry re-assessed or set aside.

Court decision

The Bombay High Court (Kureshi and Sanklecha, JJ.) overruled the sole objection in the impugned orders, held the refund applications maintainable without challenging the self-assessed bills of entry, revived them, and directed the Competent Authority to process them and pass a fresh order by 31 January 2019, confining its scrutiny to whether the Petitioner established that the excess duty was not passed on (unjust enrichment). The petition was disposed of in favour of the Petitioner.

Facts

Micromax Informatics Ltd imported mobile handsets under bills of entry between July 2014 and June 2015, paying CVD at 7.21% (till 28.02.2015) and 13.5% (thereafter), though it claimed a concessional CVD rate (effectively 1%) under Notification No.12/2012 dated 17.03.2012 as explained by the Supreme Court in SRF Ltd v. CC, Chennai. The Department's EDI system would not accept bills of entry at the concessional rate and, despite the Petitioner's letters, was not amended, so the Petitioner cleared the goods under compulsion by paying full CVD. The Petitioner filed refund applications under Section 27 of the Customs Act, 1962. The Deputy Commissioner (Refund Cell) raised a deficiency memo listing 10 defects, and the Competent Authority (Respondent No.3) ultimately rejected the refund claims solely on the ground, relying on Priya Blue, that the Petitioner had not challenged/got set aside the assessments of the bills of entry.

Key provisions

• Section 27, Customs Act, 1962 — Claim of refund duty
• Section 17, Customs Act, 1962 — Assessment of duty
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded