CESTAT Dismisses ₹54.15 Lakh Refund Appeal: Customs Duty Reassessment Denied u/s 17(5), Late Filing Bars Section 27 Claim [Read Order]

In a recent ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore Bench, has dismissed an appeal seeking a refund of ₹54.15 lakh in customs duty, holding that reassessment of the Bill of Entry under Section 17(5) of the Customs Act, 1962, was impermissible after clearance of goods.

The Tribunal observed that the importer failed to challenge the original self‑assessment within the statutory period, rendering its subsequent refund claim under Section 27 time‑barred.

The appellant, Merck Life Science Pvt. Ltd., had imported electromechanical assemblies under Bill of Entry No. 2334134 dated 08.03.2019, paying customs duty of ₹54.15 lakh on self‑assessment. Later, upon discovering that the supplier had short‑shipped certain items, appellant filed a refund claim under Section 27 of the Customs Act, 1962, and requested reassessment of the Bill of Entry.

Appearing for the appellant, Advocate R. Sundaranathan argued that reassessment was permissible under Sections 17 and 149 of the Customs Act, as all relevant documents were available at the time of clearance. He contended that the importer should not be penalized for omissions by its customs broker and cited precedents, including Sony India Pvt. Ltd. v. Union of India and Shah Nanji Nagsi Exports Pvt. Ltd. v. Union of India , to support the plea for reassessment.

On the other hand, the Revenue, represented by Superintendent (AR) Vinod Kumar Garhwal, countered that once goods are assessed and cleared with “out‑of‑charge,” reassessment cannot be sought except through an appeal under Section 128. Citing the Supreme Court’s landmark judgment in ITC Ltd. v. Commissioner of Central Excise, the department maintained that a refund cannot be claimed without first challenging the assessment order.

After hearing both sides, the Bench comprising Dr. D.M. Misra (Member Judicial) and R. Bhagya Devi (Member Technical) held that reassessment under Section 17(5) is permissible only when the proper officer, upon verification or testing, finds the self‑assessment incorrect.

The Tribunal observed that if Merck was aggrieved by the self‑assessment, it should have filed an appeal within the statutory period ending 07.06.2019. The appeal filed in September 2022 was far beyond the condonable limit. Consequently, the Bench ruled that “the appellant cannot, through a refund claim, reopen the assessment nor can reassessment be entertained beyond the appealable period.”

Finding no merit in the appeal, the appeal was rejected

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