2014 (12) TMI 1121 - HC - Customs

Denial of refund claim of excess duty - Bar of limitation - Commissioner sanctioned refund claim - Assessee filed separate refund claims after 7 years - Held that - When there is no provision for filing a second refund application, the question of limitation does not arise. Further, the time limit under Section 27(1) of the Customs Act would be for the first application and the appeal is a continuation of the original proceedings and therefore there can be no limitation in respect of the proceedings pursuing the refund claim. Accordingly, both the questions of law are answered in favour of the assessee and against the Revenue. - Decided against Revenue.

Summary

Issues:
1. Consideration of a claim for refund after the expiry of the time limit fixed under Section 27(1) of the Customs Act, 1962.
2. Validity of the order allowing a claim for refund after the expiry of seven years.

Analysis:
1. The case involved a dispute regarding the refund applications filed by the respondent for excess duty paid, which were initially dismissed by the Original Authority. Subsequent appeals were filed, resulting in orders in favor of the claimant by the Commissioner (Appeals). The respondent then filed additional refund applications, which were rejected as belated. The Commissioner (Appeals) dismissed the appeals against this rejection, leading to an appeal before the Tribunal. The Tribunal allowed the appeal, prompting the Revenue to challenge the decision in the High Court based on the substantial questions of law raised.

2. The High Court examined the provisions of the Customs Act and reviewed the Tribunal's order. It noted that there was no requirement for a second refund application after a favorable order by the Commissioner (Appeals). The Tribunal's reasoning emphasized that the Supreme Court's directives in previous cases did not apply to the current situation, as the claims were not pending in any court proceedings when the directives were issued. The Tribunal concluded that the appellants had complied with the statutory requirements by filing refund claims in accordance with the law, and there was no need for a fresh application following successful appeal or revision proceedings. The Court agreed with the Tribunal that the time limit under Section 27(1) of the Customs Act pertained to the first application, and subsequent proceedings were a continuation of the original claim, thus not subject to limitation.

3. Ultimately, the High Court upheld the Tribunal's decision, confirming that the respondent was eligible for the refund amounts claimed. The Court ruled in favor of the assessee, stating that the absence of a provision for a second refund application negated the issue of limitation. Therefore, both substantial questions of law were answered in favor of the assessee and against the Revenue. The order of the Tribunal was affirmed, and the Civil Miscellaneous Appeal was dismissed without costs.