2011 (3) TMI 661 - AT - Customs

Refund - Limitation - Provisional assessment - Since, the goods imported vide bills of entry dated 24-8-1998 and 2-2-1999 were cleared provisionally and provisional assessments were subsequently finalized on 216.99 and 15-6-1999 respectively - They filed the refund claim on 14-1-2004 - As per the decision of the Hon ble High Court of Gujarat in the case of CC v. Hindalco Industries Ltd. 2008 -TMI - 48275 - HIGH COURT OF GUJARAT AT AHMEDABAD wherein it has been categorically held that prior to 13-7-2006, the Revenue was bound in law to make the refund without any claim being required to be made by an assessee for refund of excess duty paid due to finalization of assessment - There is no justification for reading the provision of Section 27 into Section 18 of Customs Act, 1962 - Hence, the time limit prescribed u/s 27 in respect of refund claim arising out of provisional assessment may not alter the specific provisions of Section 18 - Decided in favour of assessee.

Summary

Issues involved:
Appeal against rejection of refund claim as barred by limitation under Section 27 of Customs Act, 1962 for excess duty paid during provisional assessments.

Detailed Analysis:

1. Background and Facts:
The appeal was filed against the order of the Commissioner (Appeals) which upheld the rejection of a refund claim amounting to Rs. 80,92,411/- as being time-barred under Section 27 of the Customs Act, 1962. The goods were imported in 1998 and 1999, cleared provisionally, and later finally assessed in 1999, resulting in an excess duty payment by the appellants.

2. Legal Arguments - Appellant's Position:
The appellant's advocate relied on Section 18 of the Customs Act, 1962, both pre and post the 2006 amendment, to argue that any excess duty paid during provisional assessments should be refunded by the department without the need for a claim by the assessee. Reference was made to judicial decisions supporting this interpretation, including a judgment by the Hon'ble High Court of Gujarat.

3. Legal Arguments - Respondent's Position:
The Senior Departmental Representative (SDR) defended the order of the Commissioner (Appeals) by citing the explanation to Section 27, which specifies a one-year time limit for refund applications in cases of provisional assessment. The SDR also emphasized the application of the principle of unjust enrichment to refunds arising from provisional assessments.

4. Judgment and Analysis:
The Tribunal considered the submissions from both sides and reviewed the relevant provisions of the Customs Act, 1962. The Tribunal referred to the judgment of the Hon'ble High Court of Gujarat, which clarified that prior to the 2006 amendment, the department was obligated to refund excess duty without requiring a claim from the assessee. The Tribunal held that there was no justification for applying the time limit under Section 27 to refund claims arising from provisional assessments before the 2006 amendment.

5. Conclusion:
Based on the interpretation of Section 18 and the judicial precedents, the Tribunal allowed the appeal, granting consequential relief to the appellant in accordance with the law. The decision emphasized the legal obligation of the department to refund excess duty paid during provisional assessments without the need for a formal claim by the assessee.

This detailed analysis highlights the legal arguments, judicial interpretations, and the ultimate decision of the Appellate Tribunal regarding the rejection of a refund claim in the context of provisional assessments under the Customs Act, 1962.