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2017 (12) TMI 727 - AT - CustomsRefund claim of amount paid under protest - denial on the ground of time limitation - case of appellant is that the amount paid by the appellant during the course of investigation is merely a deposit and this payment does not amount to a duty and Section 27 of the Customs Act, 1962 will not apply to deposits - Held that - the amount was deposited during investigation and later on the Commissioner has held that the appellant was not liable to pay duty and thereafter the appellant filed the refund claim - in the case of Motorola India Pvt. Ltd. 2006 (4) TMI 390 - CESTAT, BANGALORE , it was held that when the amount is paid during the course of investigation, it is not the duty and it is only a deposit and Section 27 of the Customs Act, 1962 is not applicable to deposits made during investigations - unjust enrichment is not applicable nor it has been invoked by the Department. Interest on delayed refund - Held that - the assessee is entitled to interest from the date of expiry of three months from the date of filing the application for refund till the refund is granted. Appeal allowed - decided in favor of appellant.
Issues:
- Appeal against dismissal of refund claim on the ground of limitation. - Applicability of duty payment under protest and unjust enrichment. - Entitlement to interest on delayed refund. Analysis: Issue 1: Appeal against dismissal of refund claim on the ground of limitation The appellant imported safety devices and availed duty exemption. A case was registered for wrongfully claiming duty exemption on smoke detectors and fire alarm systems. The appellant voluntarily paid duty and interest during the investigation. The Commissioner held that the imported goods were entitled to exemption and dropped the duty demand. The appellant filed a refund claim, rejected on the ground of limitation by the lower authority. The Commissioner(Appeals) also dismissed the appeal. The appellant contended that the impugned order was contrary to law and binding precedents. Citing relevant cases, the appellant argued that the payment during investigation was a deposit, not duty, and thus not subject to Section 27 of the Customs Act, 1962. The appellant also argued that the limitation period does not apply when deposits are made under protest. The Tribunal, after considering submissions and precedents, held that the impugned order was not sustainable, allowing the appeal. Issue 2: Applicability of duty payment under protest and unjust enrichment The appellant argued that the duty payment was made under protest, exempting it from the limitation period. Citing cases, the appellant contended that the principle of unjust enrichment does not apply to amounts deposited during investigation. The AR, however, maintained that the refund was time-barred and unjust enrichment applied. The Tribunal found that the amount deposited during investigation was not duty, following precedents that deposits made during investigation are not subject to Section 27 of the Customs Act, 1962. The Tribunal agreed with the appellant that the appeal itself indicated payment under protest and that unjust enrichment was not applicable in this case, ultimately setting aside the impugned order. Issue 3: Entitlement to interest on delayed refund The appellant claimed interest on delayed refund based on relevant judgments. The Tribunal noted that interest on delayed refund was warranted, referencing the entitlement upheld in previous cases. Citing the decision in the case of Ranbaxy Laboratories Ltd., the Tribunal held that interest was due from the date of expiry of three months from the refund application until the refund was granted. Consequently, the appeal was allowed in favor of the appellant, granting interest on the delayed refund. (Order pronounced on 21/11/2017)
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