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2023 (9) TMI 199 - HC - CustomsRefund of excess duty paid - time barred or not - application filed beyond a period of one year from the date of payment of duty - Section 27 of the Customs Act - whether there has been a mistake and whether the said mistake in having paid excess or double duty, in the present case, was bonafide or not? - HELD THAT - Petitioner is a corporate involved in various kinds of businesses, having eight divisions expected to be guided and advised by a professional set of Managers as well as Chartered Accountants. To demonstrate bonafides, a corporate of the stature of the Petitioner ought to demonstrate that due care and diligence were exercised. Admittedly, although the payment of excess duty was made in July, 2017, it is only in 2019 that while conducting an internal audit, the mistake that Petitioner had paid excess customs duty was noticed and it is only thereafter that pursuant to a certificate dated 2.7.2019 by Petitioner s Chartered Accountants that Petitioner engaged with the Customs Department. All that the Certificate states is that based on verification of such records as produced to them and as per the information and explanation given to them by the Petitioner, they have certified that the Company filed a claim for refund of the IGST paid as the same was paid twice against the import of the components - There is no whisper of the time or the circumstances under which said mistake was discovered by the Petitioners. It appears that the said certificate had been issued at the behest of the Petitioner itself and the certificate nowhere suggests that the Chartered Accountants had discovered the mistake at a point in time and brought it to the notice of the Petitioner. The Petitioner has relied upon the decision of the Hon ble Supreme Court in the case of Vedanta Limited vs. Commissioner of Customs (Port) and Anr. 2016 (12) TMI 266 - SC ORDER . The Petitioner therein had filed application for refund of the amount of the customs duty paid in excess as the goods for export were short shipped. The Commissioner of Customs had rejected the refund application as being made beyond the prescribed time. The Hon ble Supreme Court held that the provisions of Section 27 of the Customs Act would not apply to the case on its plain language and accordingly directed refund of the excess amount of customs duty to be paid within a specified time - decision in the case of Vedanta Limited vs. Commissioner of Customs (Port) and Another would not apply to the facts of this case, as in that case the goods were short shipped, which meant no duty could be levied and there is no finding that the mistake was not bonafide, but that is not the case here. In the facts of the present case, the Petitioner has not been able to establish that the mistake was bonafide. Section 27 of the Customs Act clearly requires that any person claiming refund of any duty is to make an application in the form or manner as may be prescribed before the expiry of one year from the date of payment of such duty or interest. In the present case, the petitioner has filed refund application on 30.07.2019, after more than two years of payment of duty and therefore, even if the date of 11.7.2017 is considered as the payment of duty, the one year would end on 10 July 2018 which is clearly beyond the period of one year as contemplated by the Customs Act and is barred by limitation. The claim of refund made by the Petitioner nowhere states or submits that the tax or duty had been claimed or collected by misinterpreting or misapplying the provisions of law. There would therefore be no question of unjust enrichment as claimed by the Petitioner in the Respondent no. 3 rejecting the refund claim on the ground of limitation. Further, the period of ninety days has expired much before 16 March 2020, and therefore, the benefit of the suo motu order of the Hon'ble Apex Court extending or excluding the time period between 16 March 2020 and 20 February 2022 on account of Covid-19 pandemic, as claimed by the Petitoner, would also not be available to the Petitioner - it is clear that the Petitioner has been negligent in pursuing its statutory remedies and now is seeking the indulgence of this Court in its writ jurisdiction which we are not inclined to exercise as we have found that the Petitioner has not been able to establish that the mistake was bonafide nor has the Petitioner come with clean hands. In the facts and circumstances of this case, no interference is called for in the impugned order dated 8 November 2019 passed by the Assistant Commissioner of Customs, Refund Section, ACC, Mumbai, under Section 27 of the Customs Act, 1962 - Petition dismissed.
Issues Involved:
1. Applicability of Section 27 of the Customs Act, 1962. 2. Violation of Article 265 of the Constitution of India. 3. Delay and laches in filing the refund application. 4. Requirement to challenge self-assessment orders before claiming a refund. 5. Maintainability of the Writ Petition. Summary: Applicability of Section 27 of the Customs Act, 1962: The petitioner sought a refund of Rs. 38,90,832/- paid as excess customs duty, which was rejected by the Assistant Commissioner of Customs as time-barred under Section 27 of the Customs Act, 1962. The court held that Section 27 clearly mandates that any refund claim must be made within one year from the date of payment of duty. The petitioner filed the refund application more than two years after the payment, making it time-barred. The court emphasized that the mistake in payment must be bona fide to invoke the general law of limitation, which the petitioner failed to establish. Violation of Article 265 of the Constitution of India: The petitioner argued that the retention of excess duty by the customs authorities violated Article 265 of the Constitution, which mandates that no tax shall be collected without the authority of law. The court, however, found that since the petitioner had filed the refund application under Section 27 of the Customs Act, the limitation prescribed therein applied. The court concluded that there was no violation of Article 265 as the tax was collected under the authority of law. Delay and laches in filing the refund application: The court noted that the petitioner discovered the mistake during an internal audit in 2019, two years after the payment. The petitioner filed the refund application on 30 July 2019, which was beyond the one-year limitation period. The court held that the petitioner's delay in filing the refund application and the subsequent writ petition indicated negligence and lack of bona fide mistake. The court also noted that the petitioner failed to file an appeal against the self-assessment order within the statutory period. Requirement to challenge self-assessment orders before claiming a refund: The respondents argued that the petitioner should have challenged the self-assessment orders before filing the refund application. The court referred to the Supreme Court's decision in ITC Ltd. Vs. Commissioner of Central Excise, Kolkata IV, which held that self-assessment orders must be challenged before claiming a refund. However, the court did not base its decision on this ground, as the refund application was already time-barred under Section 27. Maintainability of the Writ Petition: The court held that the writ petition was not maintainable due to the petitioner's failure to establish a bona fide mistake and the statutory limitation under Section 27. The court also noted that the petitioner had not approached the court with clean hands, given the delay in filing the refund application and writ petition. Conclusion: The court dismissed the petition, upholding the rejection of the refund claim by the Assistant Commissioner of Customs as time-barred under Section 27 of the Customs Act, 1962. The court emphasized the importance of adhering to statutory limitations and the requirement to demonstrate bona fide mistakes in refund claims.
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