2002 (3) TMI 196 - AT - Customs

Summary

Issues:
1. Validity of protest for refund claim under Section 27 of the Customs Act.
2. Applicability of limitation provisions under Section 27 for refund claims.
3. Requirement of a formal letter of protest for refund claims.
4. Interpretation of the Supreme Court's decision in Mafatlal Industries case.
5. Applicability of the decision in Pratibha Processors case to the present scenario.

Analysis:

Issue 1: Validity of protest for refund claim under Section 27 of the Customs Act
The case involved the importation of raw material under the DEEC Scheme, where the Customs authorities insisted on payment of interest on duty. The party paid the interest 'under protest,' clearly endorsed in the TR-6 challan. The Assistant Commissioner rejected the refund claim, stating that a valid letter of protest was required. However, the Tribunal held that the protest recorded in the TR-6 challan was sufficient for the refund claim under Section 27, relying on the Supreme Court's decision in Mafatlal Industries case.

Issue 2: Applicability of limitation provisions under Section 27 for refund claims
The refund claim was filed beyond the limitation period prescribed under the second proviso to Section 27(1) of the Customs Act. However, the Tribunal held that the protest noted in the TR-6 challan was a valid and sufficient protest for the refund claim, and thus, the claim was not barred by limitation under Section 27.

Issue 3: Requirement of a formal letter of protest for refund claims
The authorities contended that a formal letter of protest was necessary for refund claims under Section 27. In contrast, the Tribunal held that the protest recorded in the TR-6 challan was acceptable, especially in the absence of any specific provision mandating a formal letter of protest under the Act or Rules.

Issue 4: Interpretation of the Supreme Court's decision in Mafatlal Industries case
The Tribunal interpreted the Supreme Court's ruling in Mafatlal Industries case, emphasizing that the department cannot question the grounds of protest and that the protest noted in the TR-6 challan sufficed for the refund claim under Section 27 of the Customs Act.

Issue 5: Applicability of the decision in Pratibha Processors case to the present scenario
Drawing from the decision in Pratibha Processors case, the Tribunal concluded that since no Customs duty or interest was payable on the imported goods, the amount paid was not duty or interest but merely a sum of money. Therefore, the limitation provisions of Section 27 could not be applied for the refund claim.

In conclusion, the Tribunal allowed the appeal, holding the appellants entitled to a refund of the interest amount paid 'under protest' at the time of clearing the imported raw material, setting aside the impugned order and granting consequential reliefs to the appellants.