2008 (11) TMI 204 - AT - Customs

Refund of customs duty - period of limitation - By letter dated 1st August, 2001,appellants requested the Assistant Commissioner of Customs, Udaipur for waiver of interest under Section 61 of Customs Act, 1962 and also informed that they were depositing the interest under protest for the purpose of release of goods. CBEC rejected their application for waiver of payment of interest on 9-10-2001. Subsequently, the appellant found that they had paid excess amount of interest to the tune of Rs.10,22,523/- and applied for refund claim of the said amount. The Adjudicating Authority rejected the refund claim as time barred and hit by principle of unjust enrichment. The Commissioner (Appeals) upheld the adjudication order - Held that - appellants paid the excess amount of interest by way of erroneous calculation of rate of interest. So, it is not a case of mere calculation mistake - refund was rightly rejected as time bar

Summary

Issues: Appeal against rejection of refund claim as time barred and hit by bar of unjust enrichment under Section 11B of Central Excise Act, 1944.

Analysis:
1. Refund Claim Rejection: The appellant imported capital goods in January 1997 for a cement plant but faced financial crisis. The goods were kept in a warehouse due to inability to clear them. The lease of the factory premises was canceled, and a court directed installation of the plant by December 31, 2001. The appellant deposited customs duty under protest in August 2001 and applied for waiver of interest, which was rejected in October 2001. The refund claim of excess interest paid was rejected as time-barred and hit by unjust enrichment. The Commissioner (Appeals) upheld this decision.

2. Appellant's Arguments: The appellant contended that the interest was paid under protest, making the refund claim not time-barred. They claimed the excess interest payment was refundable as it was paid by mistake, and the limitation under the Customs Act did not apply. The principle of unjust enrichment was argued not to be applicable to capital goods, citing Tribunal decisions.

3. Revenue's Position: The Revenue supported the Commissioner's findings, stating the interest was paid under protest after applying for waiver. They argued that the limitation period started from the rejection of the waiver application in October 2001 and that the refund claim filed in December 2003 was time-barred.

4. Tribunal's Decision: The Tribunal noted the appellant's protest of interest payment in August 2001 but emphasized that the protest was vacated upon the Board's rejection of the waiver application in October 2001. Referring to a previous case, the Tribunal held that refund claims must be filed within six months of dismissal on unjust enrichment grounds. The appellant's claim of excess interest payment due to a calculation error was acknowledged. Ultimately, the Tribunal upheld the rejection of the refund claim as time-barred, not delving into the unjust enrichment aspect. The appeal was dismissed on 7th November 2008.