2024 (11) TMI 1356 - AT - Customs

Refund claim - rejection of refund claim for non-fulfillment of conditions 2(e)(iii) since the date of sales invoice being prior to out-of-charge and he also rejected the claim for non-fulfilment of condition 2(c) of Notification No. 102/2007 dated 14.9.207 since the refund claim pertained to Kolkata Port. Whether the degree of negligence is so high that a substantive matter of refund is to be denied due to a procedural lacuna? - HELD THAT - As since the refund was filed on time albeit in the wrong jurisdiction the claim could not have been rejected on the ground of time bar but should have been transferred to the Competent Authority. That being the case the claim has to be examined and decided by the proper officer having jurisdiction over the matter since any order passed without jurisdiction would be void ab initio as such a defect cannot be correct even by consent of parties (See Kiran Singh Ors. Vs. Chaman Paswan Ors. 1954 (4) TMI 48 - SUPREME COURT . In the circumstances the appeal is allowed by way of remand with a direction that the preferred claims may be placed before the jurisdictional authority by the respondent within 30 days of receipt of this order who shall then examine and finalize the matter within 60 days of receipt of the claim paper from the respondent. The appellant shall also cooperate in ensuring the same.

Summary

Issues:
Appeal against Order in Appeal, Refund claim rejection for non-fulfillment of conditions, Jurisdictional error in filing refund claim, Negligence on part of the appellant, Refund claim filed before wrong authority, Procedural lacuna leading to denial of refund, Transfer of application for refund claim to competent authority, Time bar for filing refund claim, Rejecting refund claim for delay in filing before proper authority.

Analysis:

The appellant filed an appeal against Order in Appeal C. Cus. II No. 354/2014 dated 24.12.2014 passed by the Commissioner of Customs (Appeals - II), Chennai, regarding the refund claim for 4% SAD paid on imported goods. The refund claim was partially allowed by the refund sanctioning authority, leading to the appellant's appeal before the learned Commissioner (Appeals). The First Appellate Authority further allowed a partial refund but rejected a portion of the claim, resulting in the present appeal (para 2).

The appellant, through their learned Advocate, argued that the refund claim was filed in time but was disposed of after a significant delay by the Ld. Original Authority. The appellant contended that the rejection of the refund claim amounting to Rs. 2,21,192/- was unjustified, especially considering the timely filing of the claim and the circumstances surrounding the case. The appellant highlighted discrepancies in the decision of the First Appellate Authority and requested the rejection of the claim to be set aside for the sake of justice (para 3.1).

During the hearing, the Ld. Counsel for the appellant and the Ld. AR representing the revenue presented their arguments. The Member (Technical) noted that the impugned claim was filed in time, albeit before the wrong Authority. The Member questioned whether a procedural error should lead to the denial of a substantive refund and pointed out the department's negligence in not returning the claim promptly. Reference was made to a similar case decided by the Member in FINAL ORDER NO. 40857 / 2023, highlighting the importance of procedural fairness and the obligation of the department to facilitate the refund process (para 4).

In the detailed analysis, the Member emphasized that rejecting the refund claim solely based on a delay in filing before the proper authority, despite the claim being submitted on time, was not justifiable. Citing relevant legal principles and judgments, the Member agreed with the decision of the Commissioner (Appeals) and concluded that the appeal should be accepted. The Member highlighted the need for the claim to be examined and decided by the proper officer with jurisdiction, emphasizing the invalidity of any order passed without proper jurisdiction (para 5, 5.1).

Consequently, the Member allowed the appeal by way of remand, directing the respondent to place the preferred claims before the jurisdictional authority within a specified timeframe for examination and finalization. Cooperation from both parties was requested to expedite the process, and the appeal was disposed of accordingly (para 6).