2024 (11) TMI 807 - AT - Customs

Refund claim as appellant had paid the Duty twice due to ICEGATE error - double payment was made because the first payment on 10.01.2020 was not appropriated against the Bill of Entry No. 6415996 dt.10.01.2020, hence another payment made on 17.01.2020 - refund sanctioning authority held the refund claim as time barred as the same was not filed before the expiry of one year period from payment of Duty and interest - Whether the amount deposited is in the nature of duty or it is in the nature of deposit and if it is in the nature of deposit, whether Section 27 can be made applicable to the same or otherwise for the purpose of determining the limitation? HELD THAT - Barring the situation where the refund is filed on account of unconstitutionality of the levy itself, all kinds of refund have to be dealt with the statutory provisions within the statute and its entire provisions would be applicable in full force including limitation. In the present appeal, it is not disputed that the amount has been paid twice because of some miscommunication or any other factor including what appellants are saying as malfunctioning of ICEGATE. It is not the case where it has been paid under the provision which has been held to be ultra vires of the constitution or it was paid due to incorrect appreciation of law. At best, it will fall within the category of clerical error or factual mistake or lack of information but by no stretch of imagination, such payment would fall under the nature of deposit or illegal levy. In this case there has been a mistake in making excess payment of Customs Duty, which is not being disputed by either sides, however, this excess payment, whether it is in the nature of duty or otherwise has been discussed in detail the foregoing paras and it is clear that in the given set of facts, it was in the nature of duty only and therefore, it would be required to be dealt with in accordance with the provisions under Section 27 of the Customs Act in view of various judgments cited in support of the submissions that refund of any amount under the Customs Act has to be dealt with in accordance with Section 27 only and not otherwise. Thus, following the various judgments cited by learned AR and especially the majority decision in the case of Mafatlal Industries Ltd 1996 (12) TMI 50 - SUPREME COURT the provisions of Section 27 will be applicable in full force. The claim was filed before the customs authority, who is a creature of statute and therefore, he is bound by the provisions of the Act itself while considering the claim for refund unlike the Hon ble High Courts and Hon ble Supreme Court, who have wider jurisdiction and power under Article 226 and Article 32 of the Constitution respectively. It is also no longer res integra that the Tribunal is a creature of statute, which has to function within the four walls of statute itself. Therefore, in the facts of the case, no fault can be found with the rejection of the refund claim, which has admittedly been filed beyond the limitation period under the relevant statute i.e., Customs Act, 1962 and therefore, there is no ground for interfering with the order of the Commissioner (Appeals).

Issues Involved:

1. Whether the payment made on 17.01.2020 is in the nature of duty or deposit.
2. Applicability of Section 27 of the Customs Act, 1962, regarding the limitation period for refund claims.
3. Consideration of the appellant's argument that the payment was made under protest.
4. Evaluation of case laws cited by both parties concerning the nature of the payment and limitation applicability.

Issue-wise Detailed Analysis:

1. Nature of Payment: Duty or Deposit

The appellant argued that the payment made on 17.01.2020 was not in the nature of duty but a deposit due to a double payment error. The Tribunal noted that the payment was made as if it was customs duty, and the refund claim was filed in the format prescribed for duty refunds. The Tribunal concluded that the payment was in the nature of duty, not a deposit, as it was made under the belief that it was necessary for duty discharge.

2. Applicability of Section 27 of the Customs Act, 1962

The Tribunal extensively discussed the applicability of Section 27 of the Customs Act, which prescribes a limitation period for refund claims. The original refund sanctioning authority and the Commissioner (Appeals) held that the refund claim was time-barred under Section 27, as it was filed beyond the statutory period. The Tribunal reinforced that all claims for refund of duty, except those arising from unconstitutional levies, must adhere to the statutory provisions, including the limitation period under the Customs Act. The Tribunal cited the majority decision in Mafatlal Industries Ltd, emphasizing that the statutory provisions must be followed for claims of refund, and general law of limitation cannot be invoked by authorities functioning under the Customs Act.

3. Payment Made Under Protest

The appellant claimed that the payment was made under protest due to the rejection of the initial payment. However, the Tribunal found no evidence to support this claim. The payment on 17.01.2020 was made under a mistaken belief that the initial payment was not credited, rather than under protest. The Tribunal concluded that the payment was not made under protest, and thus, the statutory provisions for refund under the Customs Act apply.

4. Evaluation of Case Laws

The Tribunal evaluated various case laws cited by both parties. The appellant relied on cases suggesting that double payments should not be treated as duty and should be refunded without applying Section 27 limitations. However, the Tribunal noted that many of these cases did not consider the binding precedent set by the majority decision in Mafatlal Industries Ltd. The Tribunal emphasized that the majority decision in Mafatlal Industries Ltd mandates that all refund claims, other than those arising from unconstitutional levies, must be processed under the statutory provisions of the Customs Act, including the limitation period. The Tribunal distinguished the cases cited by the appellant, finding them inapplicable to the present facts, as they either did not consider the majority decision or were factually different.

Conclusion:

The Tribunal dismissed the appeal, upholding the decision of the Commissioner (Appeals) that the refund claim was time-barred under Section 27 of the Customs Act. The Tribunal emphasized that the statutory provisions, including the limitation period, must be followed for refund claims, and the payment made on 17.01.2020 was in the nature of duty, not a deposit. The Tribunal found no evidence of the payment being made under protest and concluded that the refund claim was rightly rejected for being filed beyond the permissible statutory time limit.

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