2014 (6) TMI 479 - AT - Customs

Denial of refund claim of redemption fine and penalty - Reduction in quantum of fine and penalty - Bar of limitation - Held that - Section 27 of the Customs Act, 1962, deals with the refund claim arises out of duty and interest. The Section 27 ibid does not talk about the refund of redemption fine and penalty. Therefore, the provisions of Section 27 of the Customs Act are not applicable to the facts of the case. Therefore, the orders of the lower authorities holding that the refund claim is time barred, is not sustainable - Decided in favour of assessee.

Summary

Issues:
Refund claim rejection based on time bar under Section 27 of the Customs Act, 1962.

Analysis:
The appellant appealed against the rejection of their refund claim for redemption fine and penalty as time-barred under Section 27 of the Customs Act, 1962. The appellant had initially paid a redemption fine of Rs.10,00,000/- and a penalty of Rs.5,00,000/- at the time of import, which were later reduced to Rs.2,50,000/- and Rs.10,000/- respectively by the Tribunal. Subsequently, the appellant filed a refund claim for the excess amount paid, which was rejected by the lower authorities citing the one-year limitation period under Section 27 of the Customs Act. The appellant contended that Section 27 does not cover redemption fine and penalty refunds, and therefore, the time limit does not apply.

Upon review, it was observed that Section 27 of the Customs Act, 1962, specifically pertains to duty and interest refunds and does not mention redemption fine and penalty refunds. Consequently, the provisions of Section 27 were deemed inapplicable to the present case. The Tribunal found that the lower authorities erred in holding the refund claim as time-barred based on Section 27. As a result, the appeal was allowed, and any consequential relief was granted to the appellant.

This judgment clarifies the scope of Section 27 of the Customs Act, emphasizing that it does not encompass refund claims for redemption fine and penalty. The decision highlights the importance of accurately interpreting statutory provisions to determine the applicability of time limits in refund cases. The Tribunal's ruling sets a precedent for similar cases where refund claims for specific charges are disputed based on statutory time constraints, ensuring a fair and just application of the law in customs matters.