2014 (5) TMI 406 - AT - Customs

Bar of Limitation - Entitlement for Refund of Duty Section 27 Customs Act, 1962 - Non-challenge of Orders finalizing provisional assessment Held that - The orders finalizing provisional assessment have not been challenged at all and they have attained finality - In respect of the two orders wherein the authority who finalized the whole assessment has observed that the refund will be subject to Section 27 - Irrespective of the legal provisions, the orders became binding on the importer and as a result, rejection of refund claims on the ground that same are time-barred in accordance with Section 27 cannot be found fault with - The appeal filed by assessee in respect of into-bond Bills of Entry No. 1546 deal with in O-I-O No. 73/2006, dated 2-6-2006 holding eligibility of refund of Rs. 5,75,256/- and O-I-O No. 72/2006, dated 2-6-2006 finalizing Bills of Entry Nos. 204006, 204167, 204927, 205181, 205776, 205883, 206378, 206717, 207187, 207460, 207711, 209274 and 210446 involving refund of Rs. 44,45,425/- have to be held as final and in respect of these two refund claims, appeal is rejected and appellants are held to be ineligible for refund on the ground that the refund claims were filed beyond 6 months from the relevant date Decided against Assessees. Bar of Limitation - Entitlement for Refund of Duty Section 27 Customs Act, 1962 Held that - Authority finalizing the provisional assessment did not specifically indicate that the refund is subject to Section 27 - Relying upon CC v. Indian Oil Corporation 2012 (1) TMI 31 - DELHI HIGH COURT - Prior to 18-4-2006 (the date on which Section 18 was amended) the importers were eligible for refund without filing a refund claim - The authority finalizing the provisional assessment was legally bound to refund the excess amount without any application from the importer - Rejection of these refund claims on the ground that they were time-barred cannot be sustained - The refund claims have to be decided in accordance with the provisions of Section 18 as it existed on the dates when the assessment was finalized in accordance with law - Therefore, refund claims dealt with remaining three orders viz. O-I-O No. 79/2006, dated 9-6-2006, No. 81/2006, dated 14-6-2006 and No. 27/2006, dated 5-4-2006 Matter remanded back to original adjudicating authority Decided in favour of assesse.

Summary

Issues:
1. Applicability of time limitation under Section 27 of the Customs Act, 1962 to refund claims arising from finalization of provisional assessment.
2. Challenge to the rejection of refund claims on the ground of being time-barred.
3. Interpretation of legal provisions and binding nature of final assessment orders.
4. Refund eligibility without filing a claim based on pre-amendment Section 18.

Analysis:
1. The primary issue in this case revolved around the applicability of the time limitation prescribed under Section 27 of the Customs Act, 1962 to refund claims resulting from the finalization of provisional assessment under Section 18. The Commissioner rejected five refund claims as time-barred, leading to a dispute over the interpretation and application of the relevant legal provisions.

2. Upon hearing the matter, it was noted that the final assessment orders related to the Bills of Entry were crucial for the resolution of the case. While two orders explicitly stated that the importer was entitled to a refund subject to compliance with Section 27, the other three orders simply mentioned the excess levy found after finalization. The non-challenged final assessment orders were deemed binding on the importer, leading to the rejection of refund claims that were filed beyond the six-month limit as per Section 27.

3. The Tribunal emphasized the importance of the language used in the final assessment orders, highlighting that where the authority explicitly mentioned the refund subject to Section 27, it became binding on the importer. Consequently, the rejection of refund claims based on the time-barred nature was upheld for two specific orders, emphasizing the legal implications of such language in the orders.

4. However, a different approach was taken for the remaining three refund claims where the provisional assessment did not specifically mention Section 27. Citing precedents from the Hon'ble High Courts of Delhi and Gujarat, it was argued that prior to the amendment of Section 18, importers were entitled to refunds without filing a claim. Relying on these decisions, it was contended that the rejection of these refund claims as time-barred was untenable. As the issue was covered by the High Court decisions, the refund claims were remanded for decision in accordance with the provisions of Section 18 pre-amendment.

In conclusion, the Tribunal differentiated between refund claims based on the language used in the final assessment orders, upholding rejections for claims explicitly subject to Section 27 while remanding those not specifically mentioning it for reconsideration in line with the pre-amendment provisions of Section 18.