The Supreme Court in the case of ITC Ltd. v Commissioner of Central Excise, Kolkata held that a person aggrieved by any order of assessment has to get it modified under Section 128 or other relevant provisions and not Section 27 for claiming of refund.
The appellants are engaged in the manufacture of paper from conventional and unconventional raw materials. In the course of manufacturing activity, waste paper/ broke arises which are recycled in the manufacturing process by making pulp. The appellant has been paying duty on paper cleared from its factory. They availed the exemption under NN 67/95-CE dated March 16, 1995. NN 6/2000-CE dated March 1, 2000, granted a complete exemption in respect of paper up to the specified quantitative limit manufactured from unconventional raw materials. On receiving a letter from Superintendent and admission of its mistake, the appellant stopped availing the exemption and started payment of duty on waste paper/ broke.
A refund claim was filed by the appellant for the period from July 2001 to March 2002 for an amount in respect of duty paid on said waste paper. The assessment committee, Commissioner of Appeals and Tribunal dismissed the appeal and hence the appeal has been preferred under Section 35(b) of the 1944 Act.
It has been contended by the department that it is not open to the proper officer after accepting the self-assessment to entertain a claim for refund in the absence of the self-assessment being questioned on appeal. Further, citing the case of Flock (India) Pvt. Ltd. and Priya Blue Industries it was contended that once the self-assessment/assessment attains finality and has not been questioned, it cannot be reopened at any point of time.
The bench constituting of Justices Arun Mishra, Navin Sinha and Indira Banerjee held that “the provisions under Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or reassessment proceedings at all.”
The Court hence upheld the necessary amendment to the original order of assessment for a refund claim as has been held by the Priya Blue Industries case and overruled the view taken by the Delhi High Court in the case of Union of India & Ors. v. Micromax Informatics Ltd. (2016) 335 ELT 446 (Del).
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