2020 (1) TMI 327 - HC - Customs

Refund Claim - time limitation - only contention of the appellants (Revenue) is that since the claim for refund was not made at the time of supply of goods, the said claim cannot be made belatedly - HELD THAT - There are no merit in this appeal. It is undisputed that the goods supplied to Export Oriented Units at the relevant point of time was entitled for tax refund. Therefore, even though the tax that was paid at the time when the goods were exported it did not entitle the respondents to retain the same. Due to various reasons, tax was paid at the time of exporting the goods. In fact the appellants does not dispute the fact that the tax has been wrongly paid. If it is not disputed it cannot be retained. That is what the Learned Single Judge has held. The learned Single Judge has rightly allowed the petition. Present appeal dismissed.

Summary

Issues:
1. Claim for refund made belatedly.
2. Entitlement of tax refund for goods supplied to Export Oriented Units.
3. Dispute over payment of Terminal Excise Duty.
4. Jurisdiction of the High Court to hear the appeal.

The judgment revolves around an appeal filed against an order directing the consideration of a refund claim for goods supplied to Export Oriented Units. The appellants contended that a belated refund claim cannot be entertained. On the other hand, respondent Nos.3 and 4 argued that the supply of goods to Export Oriented Units entitles them to claim a refund of Terminal Excise Duty. The Single Judge allowed the refund claim, prompting the appeal. The High Court noted that the goods supplied were indeed entitled to a tax refund, despite tax payment at the time of export. The appellants did not dispute the erroneous tax payment, leading to the conclusion that it should not be retained. The High Court upheld the Single Judge's decision, emphasizing the rightful allowance of the refund claim, and subsequently dismissed the writ appeal.

The primary issue addressed in the judgment is whether a claim for refund made after the supply of goods to Export Oriented Units can be considered. The appellants contended that such a belated claim should not be entertained. However, the respondent argued that as per the Foreign Trade Policy, the supplier is entitled to claim a refund of Terminal Excise Duty for goods supplied to Export Oriented Units. The High Court found merit in the respondent's argument, emphasizing that the entitlement to tax refund for goods supplied to Export Oriented Units is undisputed. The High Court upheld the Single Judge's decision, highlighting that the tax paid at the time of export, though erroneous, should not be retained if undisputed.

Another crucial aspect of the judgment involved the payment of Terminal Excise Duty during the supply of computer systems to Export Oriented Units. The respondent claimed that the petitioner had supplied goods to Export Oriented Units, making them eligible for a refund of Terminal Excise Duty. The High Court acknowledged this claim and reiterated that the tax paid at the time of export did not entitle the respondents to retain it. The High Court emphasized that the erroneous tax payment should not be disputed if it is acknowledged as incorrect, leading to the rightful allowance of the refund claim by the Single Judge.

Furthermore, the judgment delved into the jurisdiction of the High Court to hear the appeal. The High Court noted the arguments presented by both parties and found no merit in the appeal. It reiterated that the goods supplied to Export Oriented Units were entitled to a tax refund, emphasizing that the tax erroneously paid at the time of export should not be retained. The High Court upheld the decision of the Single Judge, highlighting the correctness of allowing the refund claim and subsequently dismissed the writ appeal, affirming the entitlement to the refund claim for goods supplied to Export Oriented Units.