2022 (5) TMI 587 - AT - Customs

Refund Claim of excess duty - time limitation - it is alleged that since there were Bills of Entry which were still provisionally assessed, the limitation of those bills have to be counted after the final assessment - HELD THAT - There is no denial to the fact that Bills of Entry in both these appeals (8 BE in Appeals No. 52292/2021 and 5 BE in Appeals No. 50001/2022, the duty as was to be paid at the relevant time has been paid twice, once on 24.11.2014 and another on 25.11.2014. There is no denial to the fact that second payment was made because the payment made on 24.11.2014 was not reflected in ICES portal. The said admitted facts makes it clear that on the same number of BEs duty has been paid twice. As per Constitution of India Article 265, thereof duty cannot be collected beyond what is permissible by the law. This Bench in the case of DEXTEROUS PRODUCTS PVT LTD VERSUS C.C.E. S.T., INDORE 2018 (12) TMI 381 - CESTAT NEW DELHI that though of the decision of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA 1996 (12) TMI 50 - SUPREME COURT was in favour of the department, but the Hon ble Apex Court in th said case has discussed in length the various situations of the seeking refund. While appreciating the same this Bench has already held that section 11B of Central Excise Act which is para materia to section 27 of the Customs Act (as has been involved in the present case) and the time bar therein is not applicable to the cases similar to the present one. The amount paid for the same duty but twice, one of the payment has to be refunded. Otherwise also in terms of section 17 of Limitation Act, whenever there is an application for a relief from the consequences of a mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake, or could with reasonable diligence, have discovered it. Since from this angle also, the bar of limitation is held to have wrongly applied against the impugned refund application - the duty was for Bills of Entry which were provisionally assessed, the fact remains is that duty which was to be paid at the relevant time has been paid twice, it is opined that remanding the matter back for reconsideration is not justified. The gist of Mafatlal Industries case also is that once it is established that more than what is payable under the statute has been paid by the tax-payer, the tax-payer automatically gets a right to get back the whole amount - The Authority without parity of law cannot be permitted to retain the amount because the appellant paying the double duty has committed a mistake. The appeals are allowed.

Summary

Issues Involved:
1. Limitation period for refund claims.
2. Double payment of duty.
3. Provisional vs. final assessment of Bills of Entry (BoE).
4. Applicability of Section 11B of Central Excise Act and Section 27 of Customs Act.
5. Judicial precedents on excess payment and refund.

Detailed Analysis:

1. Limitation Period for Refund Claims:
The core issue is whether the refund claim was filed within the prescribed limitation period. The Commissioner (Appeals) held that the refund claim for finally assessed BoEs was time-barred as it was not filed within one year of duty payment. However, for provisionally assessed BoEs, the claim was deemed premature. The Tribunal, referencing the Constitution of India Article 265 and judicial precedents, concluded that excess duty paid is not subject to the same limitation rules, especially when paid under a mistake. The Tribunal cited the case of Union of India vs ITC Ltd., emphasizing that tax authorities cannot retain amounts collected without legal authority and must refund excess amounts.

2. Double Payment of Duty:
It was undisputed that the appellant paid duty twice on the same BoEs due to an error in the ICES portal, which did not reflect the initial payment. The Tribunal emphasized that one of these payments must be refunded as per the principle that duty cannot be collected beyond what is permissible by law (Article 265 of the Constitution). The Tribunal rejected the notion that the refund claim was for the amount paid on 24.11.2014, clarifying that the claim was for the excess amount paid.

3. Provisional vs. Final Assessment of BoEs:
The Commissioner (Appeals) remanded the matter for re-examination of provisionally assessed BoEs. The Tribunal, however, noted that since the BoEs had not been finally assessed, the duty paid twice should be refunded. The Tribunal found no justification for remanding the matter back, especially since the BoEs had not been finalized even at the time of the judgment.

4. Applicability of Section 11B of Central Excise Act and Section 27 of Customs Act:
The Tribunal discussed the applicability of Section 11B of the Central Excise Act, which is analogous to Section 27 of the Customs Act. Citing the case of Mafatlal Industries, the Tribunal held that these sections do not apply to cases of excess payment due to a mistake of law. The Tribunal referenced previous decisions, such as Dexterous Products Pvt Ltd. and Parijat Construction, which established that the limitation period does not apply to refunds of amounts paid by mistake.

5. Judicial Precedents on Excess Payment and Refund:
The Tribunal relied on several judicial precedents to support its decision. It referenced cases like Dexterous Products Pvt Ltd., CCE vs Motorola India Pvt Ltd., and Parijat Construction, which held that excess payments made by mistake must be refunded and are not subject to the limitation period under Section 11B. The Tribunal also criticized the Commissioner (Appeals) for not following judicial protocol and for misapplying the facts and legal provisions.

Conclusion:
The Tribunal set aside the order under challenge, allowing both appeals with consequential relief. It held that the refund of the excess amount paid must be granted, emphasizing that the Department has no authority to retain amounts collected beyond what is legally permissible. The Tribunal's decision underscores the principle that taxpayers are entitled to refunds of excess payments made under mistake, irrespective of the statutory limitation periods typically applicable to refund claims.