2016 (4) TMI 1222 - AT - Customs

Time limitation - refund claim - duty paid under protest - duty against the finally assessed Bill of Entry was paid during the period from 31.8.04 to 31.7.08 and the refund claim of the said payments stand made by the appellant on 12.4.10 - Held that - As per the provisions of section 27 of Customs Act 1962 refund claim is required to be filed before the expiry of six months from the date of payment made by the assessee. However as per 2nd proviso to section 27(1)(b) such limitation of one year/six months as the case may be shall not apply when any duty and interest has been paid under protest - The second proviso nowhere restricts the limitation to passing of any order by the original adjudicating authority nor refers to any alternative date. It simplicitor is to the effect that limitation will not apply when the duty has been paid under protest. However the fact as to whether the duty was paid under protest or not does not stand substantiated before us by production of sufficient documentary evidence - inasmuch as neither of the authorities below have given categorical finding that duty was actually paid under protest the matter needs to be remanded to the original adjudicating authority - appeal allowed by way of remand.

Summary

Issues:
1. Refund claim rejection on the ground of limitation.
2. Duty payment under protest and its impact on limitation for refund claim.

Analysis:
1. The appellant imported goods and filed Bills of Entry, which were assessed by loading the declared invoice price. An order in original was issued rejecting the declared value and allowing the transaction value after loading the declared invoice value by certain percentages. The appellant filed a refund claim for excess duty payment under Section 27(1)(b) of the Customs Act, 1962. The Revenue sought to reject the refund claim as time-barred, citing the limitation period of 6 months from the date of duty payment. The appellant contended that duty was paid under protest, thus no limitation should apply. The original adjudicating authority rejected the claim, stating that the appellant did not challenge the final assessment in the Bills of Entry or lodge a protest. The Commissioner (Appeals) upheld the rejection, stating that the limitation period starts from the final decision in the appellant's case, which had passed. The appeal was rejected on the ground of limitation.

2. The Tribunal noted that there was no clear finding on whether duty was paid under protest. The second proviso to section 27 states that limitation does not apply when duty is paid under protest. The Tribunal agreed that if duty was paid under protest and the protest was not vacated, the limitation period may not apply. The Revenue argued that the limitation started from the date of the order allowing the declared value by a certain percentage. The Tribunal observed that the refund application did not arise from an order passed by a higher appellate forum but from the denovo proceedings. The Tribunal referred to various decisions highlighting that when duty is paid under protest, the limitation may not apply. However, as the fact of duty payment under protest was not substantiated with sufficient evidence, the matter was remanded to the original adjudicating authority for examination. The Tribunal also directed the consideration of the appellant's argument that filing an appeal itself amounts to duty payment under protest.

In conclusion, the Tribunal disposed of the appeal by remanding the matter to the original adjudicating authority for further examination regarding the duty payment under protest and its impact on the limitation for the refund claim. The decision emphasized the importance of establishing the payment under protest and directed a reevaluation based on the evidence presented.