2013 (12) TMI 523 - AT - Customs

Denial of refund claim - Bar of limitation - Higher amount of Customs duty paid - Refund claim filed after reassessment - Held that - The duty was admittedly paid on 6-1-2010, on the basis of assessed Bill of Entry. The letter for reassessment was filed on 15-6-2010, that is within period of six months from the date of deposit of duty. If the Assistant Commissioner would have reassessed the Bill of Entry within a short period i.e. before 6-7-2010, when the limitation of 6 months expired, the appellant would have filed the refund claim accordingly. It is a fact that without reassessment order, refund could not have been filed by the appellant. As soon as the reassessment order was passed on 13-7-2010, the appellant filed the refund claim on 30-7-2010, i.e. within a period of six months from the date of reassessment order. Period of six months shall start running from the date of order of reassessment. Revenue cannot take the benefit of its own action, in late passing of reassessment order and then rejecting the refund claim on limitation. Admittedly, the appellant could not have filed a refund claim before passing of assessment order so as to escape period of limitation - Decided in favour of assessee.

Summary

Issues:
1. Refund claim barred by limitation.
2. Interpretation of provisions regarding refund of duty.
3. Entitlement to claim refund in case of reassessment.
4. Effect of challenging the order of assessment on refund claim.

Analysis:
1. The appellant imported aluminium scrap and paid excess customs duty, leading to a refund entitlement of Rs. 79,560. The refund application was rejected by lower authorities as time-barred since duty was paid on 6-1-2010, and the refund was filed on 30-7-2010. The appellant argued that the limitation period should start from the date of reassessment order, not the date of duty payment. The Tribunal agreed, stating that the refund claim was filed within six months of the reassessment order, as per the provisions of Rule 2.7(4). The Tribunal emphasized that the limitation period should start from the date of reassessment, not the original duty payment date, to prevent the Revenue from benefiting from its late reassessment action.

2. The Tribunal further analyzed the definition of assessment under Section 2(2) of the Customs Act, which includes reassessment. Section 27 allows refund of duty paid based on an assessment order, which encompasses reassessment. Therefore, the duty refund arising from reassessment should be considered as part of the assessment order. Since the refund claim was filed within one month of the reassessment order, the Tribunal concluded that the claim was not time-barred under Section 27.

3. Additionally, the Tribunal addressed the issue of entitlement to claim a refund in case the assessment order is under challenge, citing the Supreme Court's decision in the case of Priya Blue. The Tribunal noted that without reassessment, the appellant could not have claimed a refund. As the reassessment was completed within the limitation period, and the refund claim was filed promptly after reassessment, the Tribunal held that the claim was not barred by limitation.

4. Considering all the above points, the Tribunal set aside the lower authorities' decision and allowed the appeal, granting consequential relief to the appellant. The Tribunal emphasized the importance of reassessment in determining the refund claim's validity and highlighted that the limitation period should be calculated from the date of reassessment, not the original duty payment date.