Whether refund is to be filed directly before the AC/DC(Refund) ??
The eligibility of refund can be decided either by the proper assessing officer or the appellate authority is the current stand of the Customs department.Before the Priya Blue and Flock India cases, all refund claim were filed before the AC/DC(Refund) without going to route of Appellate forum.The main contention is that the equal adjudication authority of Refund cannot sit in the matter decided by the Group AC/DC.The assessment is final and filing a refund claim is a challenge to the assessment order.


But, whether the Assistant Commissioner of Customs (Refund) is the proper adjudication authority for the purpose of a refund claim under Customs Act 1962?

Eligibility of Refund Claim


The Assistant Commissioner of Customs (Refund) is not sitting over the Judgement of equal Quasi-Judicial Authority.The Assistant Commissioner of Customs of Refund section is a different quasi-judicial authority than the Assistant Commissioner of Customs or Deputy Commissioner of Customs of Assessing Group. Both of them have separate jurisdiction for adjudication under the Customs Act 1962.

The Assistant Commissioner of Customs (Refund) exercise power under section 27 of the Customs Act whereas the Assistant / Deputy Commissioner of Customs of the Assessing Group exercise power under section’s 17 and 18 of the Customs Act.

Under the Customs Act, various adjudication authority pass various orders on the basis of same order of assessment for the imported goods. This is illustrated below.

Let us understand who is Adjudication authority.
The Adjudication authority have been defined under section 2 of the Customs Act 1962 as ``
In this Act, unless the context otherwise requires. (1) “Adjudication Authority” means any authority competent to pass any order or decision under this Act, but does not include the Board, (Commissioner (Appeal) or Appellate Tribunal). ``

How is the Customs works? .It is more like sequence assembly operations .

The bill of entry in relation to the imported goods is presented to the Assessing Group. The Assistant / Deputy Commissioner of Customs of the Group may assess under first or second appraisement .
In case of the first appraisement, the Assistant /Deputy Commissioner of Examination gives the examination report. The concerned Assistant /Deputy Commissioner of the Group assess the goods based on the examination report of the Assistant /Deputy Commissioner of the Examination section.

Therefore, even, the Assistant /Deputy Commissioner (Group) and Assistant /Deputy Commissioner (Examination) both are equal quasi-judicial authority but the Assistant /Deputy Commissioner (Group) pass order of assessment based on the Assistant /Deputy Commissioner (Examination) report.

Similarly, under second Appraisement, on some occasion, the Assistant /Deputy Commissioner (Group) re-assess the goods based on the Assistant /Deputy Commissioner (Examination) report. This re-assessment of goods may involve change in classification, valuation and adjudication proceedings, as the case may be.

Further, in case of assessment for related party transaction, the Assistant /Deputy Commissioner (Group) assess the goods provisionally under section 18 of the Customs Act. Another adjudication authority is namely Assistant /Deputy Commissioner of the Special Valuation Branch (SVB) who investigate the related party transactional value. Based on the order of Assistant /Deputy Commissioner (SVB), the goods are finally assessed with or without loading of value by the concerned Assistant /Deputy Commissioner (Group). Moreover, the jurisdiction of the order of the Assistant /Deputy Commissioner (SVB) in matter of the particular related party have all India implication. Hence, even though Assistant /Deputy Commissioner (Group) and Assistant /Deputy Commissioner (SVB) are equal quasi-judicial authority, the Assistant /Deputy Commissioner (Group) pass the order of assessment based on the order of valuation issued by the Assistant /Deputy Commissioner (SVB).

Identically, all the refund claim, drawback claim and project finalisation cases are settled only after the concurrence of the Assistant /Deputy Commissioner in charge of Audit. Therefore, the Assistant /Deputy Commissioner, who are passing refund order, settling drawback claim and finalizing the project import are of same level quasi-judicial authority as the Assistant /Deputy Commissioner in charge of the Audit. All such orders are not amounting res Judicata.

The Assistant Commissioner of refund section is proper quasi-judicial authority in case of refund claim as per rules and relevant section of the Customs Act 1962. Any person can file refund claim where he has paid excess duty in pursuance of an order of assessment or borne by him. Therefore, refund claim can be filed after the order of assessment. There is a time limit to do so.

As far as eligibility of refund claim is considered, the Assistant Commissioner (Refund) may seek opinion from the concerned Assistant /Deputy Commissioner (Group), as done, at the time of assessment by the Assistant /Deputy Commissioner (Group), based on report of Assistant /Deputy Commissioner (Examination), Assistant /Deputy Commissioner (SVB) and Assistant /Deputy Commissioner (Audit), as the case may be.

It is arbitrary and discriminatory to ask to take appellate forum without processing refund claim as per provision of the Customs Act 1962.

Under Section 122 of the Customs Act 1962, there are three class of adjudication authorities for confiscation and penalties namely a Gazetted officer of Customs lower rank than an Assistant Commissioner of Customs (AC), than Assistant /Deputy Commissioner and lastly Commissioner of Customs or a Joint commissioner of customs, based on value of goods liable for confiscation.

But for assessment of goods and passing refund order, there is no value limit for Assistant /Deputy Commissioner of the Customs.

Various orders and decisions are passed by respective Assistant /Deputy Commissioner, being adjudication authority under various sections of the Customs Act 1962. At times, order passed by an Assistant /Deputy Commissioner becomes input for other Assistant /Deputy Commissioner orders. As in the instant case, the order of assessment passed by Assistant /Deputy Commissioner (Group) is input for Assistant /Deputy Commissioner (Refund) to process claim. In another words, if there is no order of assessment, then no refund claim to process. Hence, refund claim is based on order of assessment and not on the Order-in-Appeal. The refund claim based on Order-in-Appeal does not suffer any time limit under section 27 of the Customs Act 1962 based on duty payment date .