2018 (8) TMI 111 - AT - Customs

Refund of Differential Duty - quantification of duty on the basis of on shore receipt quantity and not on the basis of quantity mentioned in the bills of lading - rejection of refund on the ground of time limitation - whether refund claim filed by the appellant is governed by Section 27 of the Customs Act, 1962 and consequently it is time-barred or otherwise? Held that - Though the amount of refund claim is related to duty paid and the said amount is customs duty including the duty on the actual receipt quantity. Therefore, the entire amount paid by the appellant is nothing but customs duty only irrespective to the fact that certain portion of the duty was not payable. Under the Customs Act, any amount which is refundable has to pass the test provided under Section 27 of the Customs Act, 1962 - In the said Act, there is no other provisions made for refund of any amount which was paid either without authority of law or was not payable for any reason. Therefore, all the refund claims under the Customs Act has to be dealt with under the provisions of Section 27. The Hon'ble Supreme Court in various judgments held that all the refund claims of customs and excise has to be governed by Section 27 of the Customs Act or Section 11B of the Central Excise Act, 1944 - Any refund filed before the Customs/ Central Excise authorities can only process the claim under Customs/ Central Excise Acts and the departmental authorities have no jurisdiction to go beyond the provisions made under the Act and limitations provided under Section 27/Section 11B - reliance placed in the case of Collector of Central Excise, Chandigarh vs. Doaba Co-operative Sugar Mills 1988 (8) TMI 103 - SUPREME COURT OF INDIA . Calculation of relevant date - Held that - As per clause (b) of sub Section (1B) of Section 27, where the duty became refundable as a consequence of any judgment, decree, order or direction of the appellate authority, the limitation of one year shall be computed from the date of such judgment, decree, order or direction - In the present case, the demand of duty on short imported goods stands set-aside as per the order of Commissioner (Appeal) and as a consequence, the appellant become eligible for refund of the said amount. Therefore, in terms of clause (b) of sub-Section (1B) of Section 27, the period of one year shall be computed from the date of Commissioner (Appeal) order. Accordingly, the refund application filed beyond one year from that date is clearly time barred. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Whether the refund claim filed by the appellant is governed by Section 27 of the Customs Act, 1962.
2. Whether the refund claim is time-barred.

Issue 1: Applicability of Section 27 of the Customs Act, 1962

The primary issue was whether the refund claim filed by the appellant is governed by Section 27 of the Customs Act, 1962. The appellant argued that the refund amount pertains to the duty paid on the quantity of LNG which was not imported into India, and thus, the refund of this amount should not be governed by Section 27. The appellant contended that the limitation under Section 27 is not applicable in this case.

However, the Tribunal found that the amount of refund claim is related to duty paid and is considered customs duty, including the duty on the actual receipt quantity. Therefore, the entire amount paid by the appellant is customs duty, irrespective of whether a portion of the duty was not payable. Under the Customs Act, any amount refundable must pass the test provided under Section 27 of the Customs Act, 1962. The Tribunal emphasized that there is no other provision for refund under the Customs Act, and thus, all refund claims must be dealt with under Section 27.

The Tribunal cited several judgments, including the Hon'ble Supreme Court's ruling in the case of Collector of Central Excise, Chandigarh vs. Doaba Co-operative Sugar Mills, which held that any refund claims must adhere to the period of limitation prescribed in the Central Excise Act and the Rules framed thereunder. The authorities functioning under the Act are bound by its provisions, and any refund proceedings beyond the limitation provided under the Customs/Central Excise Act must be initiated in the Civil Court.

Issue 2: Time-barred Refund Claim

The second issue was whether the refund claim was time-barred. The appellant alternatively argued that the issue of whether duty is payable on the short-landed quantity of LNG was finally decided by the Tribunal on 08.09.2014, and the refund claim filed on 09.09.2015 was within the stipulated period of one year from the relevant date. However, the Tribunal found that the issue on merits was already decided in favor of the appellant by the Commissioner (Appeal) on 04.12.2013, making the appellant eligible for a refund from that date. The Tribunal noted that even though the department filed an appeal against the Commissioner (Appeal) order, no stay was granted, and the departmental authority was bound to sanction the refund claim as per CBEC Circular 572/9/2001-CX dated 22.02.2001.

The Tribunal referred to Section 27(1B) of the Customs Act, which states that the period of limitation of one year shall be computed from the date of the judgment, decree, order, or direction of the appellate authority. Since the Commissioner (Appeal) had already decided the issue on 04.12.2013, the period of one year should be computed from that date. Consequently, the refund application filed beyond one year from 04.12.2013 was deemed time-barred.

The Tribunal also cited the Hon'ble Supreme Court's judgment in the case of Dena Snuff Pvt. Limited vs. CCE, Chandigarh, which held that the period of limitation would start to run from the date of the final decision in the assessee's own case. Thus, the Tribunal concluded that the appellant's refund claim was time-barred as it was filed beyond the stipulated period.

Conclusion:

The Tribunal upheld the impugned order, concluding that the refund claim was governed by Section 27 of the Customs Act, 1962, and was time-barred. The appeal was dismissed.