2017 (11) TMI 1123 - HC - Customs

Refund claim - bank guarantee furnished - time limitation - EPCG Scheme - Held that - The Commissioner (Appeals) allowed the appeal filed by the petitioner and set aside the order passed by the respondent dated 25.4.2011. Further, the Commissioner (Appeals) directed that status quo to be maintained till the petitioner produces EODC and once it is produced and if it is found to be in order, the amount recovered by encashing the bank guarantee should be refunded - Therefore, now calling upon the petitioner to approach the Assistant Commissioner (Refunds) is presumably with an intention to reject the said application as being time barred, as the Assistant Commissioner (Refunds) is likely to take a stand that the application should have been filed for refund within one year from the date of payment of duty. Bond furnished by appellant shall stand cancelled - Bank guarantee less administrative charges to be refunded - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Validity of EPCG license and export obligation fulfillment.
2. Refund of duty demanded by the respondent.
3. Requirement of filing an application for refund under Section 27 of the Act.
4. Authority to consider the refund application.
5. Relegation of petitioner to Assistant Commissioner (Refunds).
6. Time limitation for filing refund application.

Issue 1: Validity of EPCG license and export obligation fulfillment:
The petitioner, engaged in textile manufacturing and export, imported capital goods under the Export Promotion Capital Goods Scheme. Despite fulfilling the export obligation within the stipulated time, the Joint Director General of Foreign Trade did not issue the requisite certificate. Subsequently, an Order-in-Original was passed demanding duty payment. The petitioner appealed, and the Commissioner (Appeals) set aside the original order, directing refund upon production of the Export Obligation Discharge Certificate (EODC).

Issue 2: Refund of duty demanded by the respondent:
After securing the EODC, the petitioner requested a refund, but faced delays and was directed to file a refund claim with specific documents. The respondent insisted on following the refund application process under Section 27 of the Act, leading to a dispute regarding the refund procedure.

Issue 3: Requirement of filing an application for refund under Section 27 of the Act:
The respondent contended that the petitioner must file a formal refund application under Section 27, emphasizing the need to adhere to the statutory provision for refund claims.

Issue 4: Authority to consider the refund application:
The respondent argued that the appropriate authority should evaluate the refund application as per the statutory provisions, implying that the petitioner should approach the designated authority for refund processing.

Issue 5: Relegation of petitioner to Assistant Commissioner (Refunds):
The respondent insisted that the petitioner should pursue the refund application through the Assistant Commissioner (Refunds) and that the petitioner's claim should be considered following the standard procedure.

Issue 6: Time limitation for filing refund application:
Considering the time elapsed since the original duty payment and subsequent refund request, concerns arose regarding the potential time limitation for filing the refund application, especially in light of the respondent's stance on the application process.

In the judgment, the Court held that the respondent's directive for the petitioner to approach the Assistant Commissioner (Refunds) was unsustainable, citing a precedent that supported the petitioner's position. The Court emphasized that the petitioner need not file a separate refund application under Section 27, as the respondent could consider the refund claim directly. Given the previous appellate order and the factual circumstances, the Court allowed the writ petitions, canceled the bond, and directed the respondent to refund the encashed amount within a specified timeframe, excluding administrative charges.