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2018 (9) TMI 380 - HC - CustomsRefund of CVD paid - duty was paid under protest - rejection of refund of duty with interest on the ground that it is barred by limitation - Section 27 of the Customs Act 1962 - petitioner made an application for refund under Section 27 of the Customs Act 1962 only on 6-5-2015 i.e. beyond the period of one year from the date of the order of CESTAT namely 9-5-2013. Held that - Under Section 11B the application for refund of duty of excise must be made before the expiry of one year from the relevant date. Relevant date is defined in Explanation (B)(ec). Thus the application for refund must be made before the expiry of one year from the date of the judgment decree order or direction of the authority Tribunal or Court. What is important and what is different in Section 11B of the Central Excise Act from Section 27 of the Customs Act is that Section 11B does not contain a provision similar to sub-section (1B) of Section 27 of the Customs Act 1962 which opens with the words Save as otherwise provided in this section . Thus Explanation (B) including clause (ec) thereof is not subject to the proviso. Under Section 27 of the Customs Act sub-section (1B) is subject to the second proviso to sub-section (1). The respondents apprehension that if the petitioner s submission is accepted there would be no period of limitation is not well founded. An application for refund must be made within a reasonable period of time. What is reasonable a period of time would depend on the facts of each case. This apprehension in any event cannot be the basis of denying a just claim on the ground of limitation. Refund allowed - petition allowed - decided in favor of petitioner.
Issues Involved:
1. Whether the petitioner’s claim for refund of duty with interest is barred by limitation under Section 27 of the Customs Act, 1962. 2. Applicability of the second proviso to Section 27(1) of the Customs Act, 1962 in cases where duty was paid under protest. 3. Interpretation of sub-section (1B) of Section 27 in relation to the second proviso to Section 27(1). 4. Comparison of Section 27 of the Customs Act, 1962 with Section 11B of the Central Excise Act, 1944. Detailed Analysis: 1. Whether the petitioner’s claim for refund of duty with interest is barred by limitation under Section 27 of the Customs Act, 1962: The petitioner sought a writ of certiorari to quash an order dated 13-2-2017, which rejected its claim for a refund of duty with interest on the ground that it was barred by limitation. The petitioner had paid the Countervailing Duty (CVD) under protest at the time of clearance of goods in 2007. The petitioner’s appeal before the Commissioner (Appeals) was allowed for five bills of entry but dismissed for the remaining three. The Tribunal later allowed the appeal for the remaining three bills on 9-5-2013. The petitioner applied for a refund on 6-5-2015, beyond the one-year period from the Tribunal's order. 2. Applicability of the second proviso to Section 27(1) of the Customs Act, 1962 in cases where duty was paid under protest: The second proviso to Section 27(1) states that the limitation of one year shall not apply where any duty or interest has been paid under protest. Since the petitioner paid the duty under protest, the period of limitation would not apply to their case for a refund and interest. The Deputy Commissioner of Customs initially rejected the refund claim on the ground of limitation, which was later quashed by the High Court, directing a fresh order after affording the petitioner an opportunity of being heard. 3. Interpretation of sub-section (1B) of Section 27 in relation to the second proviso to Section 27(1): Sub-section (1B) of Section 27 stipulates the terminus a quo for the period of limitation. It states that the limitation of one year shall be computed from the date of the judgment, decree, order, or direction of the Appellate Authority, Tribunal, or Court. However, sub-section (1B) opens with the words “Save as otherwise provided in this section,” making it subject to the second proviso to sub-section (1). The second proviso explicitly states that the limitation of one year shall not apply where any duty or interest has been paid under protest. Therefore, sub-section (1B) must be read together with sub-section (1) and the second proviso, meaning the one-year limitation does not apply in this case. 4. Comparison of Section 27 of the Customs Act, 1962 with Section 11B of the Central Excise Act, 1944: The Supreme Court’s judgment in Dena Snuff (P) Ltd. v. Commissioner of Central Excise, Chandigarh, was considered, but it was found not applicable to this case. Section 11B of the Central Excise Act requires an application for refund to be made before the expiry of one year from the relevant date, defined as the date of the judgment, decree, order, or direction. Unlike Section 27 of the Customs Act, Section 11B does not contain a provision similar to sub-section (1B) of Section 27, which is subject to the second proviso. Thus, the second proviso to Section 27(1) of the Customs Act overrides sub-section (1B), whereas Section 11B of the Central Excise Act does not have such an overriding provision. Conclusion: The High Court concluded that the petitioner’s claim for a refund is not barred by limitation due to the second proviso to Section 27(1), which exempts cases where duty was paid under protest from the one-year limitation period. The Tribunal’s order dated 9-5-2013 does not alter this exemption. The impugned order was set aside, and the petitioner’s claim for a refund was allowed, to be computed and paid by 30-4-2018.
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