2019 (8) TMI 1044 - AT - Customs

Refund claim - requirement of re-assessment order of bill of entry - time limitation - condonable period of delay - section 27 of Customs Act - HELD THAT - Admittedly the lower authorities have not found that the appellant is not entitled for the refund on merits and I find that the communications issued by the Assistant Commissioner requiring the obtaining of re-assessment order are not as per the procedure prescribed under Chapter 14 of the Customs Manual which is relating to Customs refunds especially when an application for refund is filed under Section 27 of the Customs Act. As per Chapter 14 of the Customs Manual Section 27 of the Customs Act 1962 deals with such refund of duty and interest and therefore any application filed will have to be processed and disposed of in the manner laid down under Section 27 read with the procedure under the Customs Manual. There is no dispute that the application for refund filed vide acknowledgement dated 11.03.2013 was within the prescribed period of one year and as regards the other conditions under Section 27 the same are not disputed by the Revenue - the rejection by the Ld. First Appellate Authority of the appeal as time-barred cannot sustain and accordingly the same is set aside. Refund claim - Section 11B of the Central Excise Act - HELD THAT - The appellant is entitled to refund subject to the guidelines issued by the Hon ble jurisdictional High Court in the case of M/S. 3E INFOTECH VERSUS CUSTOMS EXCISE SERVICE TAX APPELLATE TRIBUNAL COMMISSIONER OF CENTRAL EXCISE (APPEALS-I) 2018 (7) TMI 276 - MADRAS HIGH COURT where it was held that when service tax is paid by mistake a claim for refund cannot be barred by limitation merely because the period of limitation under Section 11B had expired. The matter is therefore remanded to the file of the Adjudicating Authority - appeal allowed by way of remand.

Summary

Issues involved:
1. Rejection of appeal as time-barred by the Commissioner of G.S.T. and Central Excise (Appeals).
2. Requirement of obtaining re-assessment order for refund claim.
3. Interpretation of Section 27 of the Customs Act, 1962 post-amendment.
4. Dispute over the time-limit for filing an appeal.
5. Applicability of the principle of refund under Section 11B of the Central Excise Act.

Analysis:

Issue 1: Rejection of appeal as time-barred
The appellant filed an appeal against the Order-in-Appeal rejecting the appeal as time-barred. The Ld. Consultant argued that the time-limit could not extinguish the appellant's right to a refund, citing relevant case law. The Ld. AR supported the lower authorities' findings, emphasizing the delay in filing the appeal. The Tribunal found that the lower authorities did not dispute the appellant's entitlement to a refund on merits. The Assistant Commissioner's insistence on obtaining a re-assessment order was deemed incorrect as it was not a requirement post the 2011 amendment to Section 27 of the Customs Act.

Issue 2: Requirement of obtaining re-assessment order for refund claim
The Tribunal noted that the Assistant Commissioner's insistence on obtaining a re-assessment order for the refund claim was not in line with the prescribed procedure under Chapter 14 of the Customs Manual. The appellant's application for a refund was within the prescribed period, and the conditions under Section 27 were not disputed by the Revenue. The Tribunal highlighted that Section 27 does not mandate the claimant to obtain an assessment or re-assessment order, especially post the 2011 amendment.

Issue 3: Interpretation of Section 27 of the Customs Act post-amendment
The Tribunal emphasized that the Revenue's insistence on assessment/re-assessment orders for the refund claim was not in accordance with the law post the 2011 amendment. The Tribunal found that the Revenue disregarded the legal requirements and kept insisting on unnecessary documentation, which was not mandated by Section 27 of the Customs Act.

Issue 4: Dispute over the time-limit for filing an appeal
The Tribunal ruled that the rejection of the appeal as time-barred by the Ld. First Appellate Authority was unsustainable. The Tribunal set aside the rejection, emphasizing that the appellant's right to a refund should not be hindered by procedural delays or time-limits, especially when the entitlement to the refund on merits was not in question.

Issue 5: Applicability of the principle of refund under Section 11B of the Central Excise Act
The Tribunal referred to a decision by the Hon'ble jurisdictional High Court, stating that a claim for refund cannot be barred by limitation if a tax is paid by mistake. The Tribunal applied the principle to the case at hand, remanding the matter to the Adjudicating Authority to process the refund claim in accordance with the guidelines issued by the High Court.

In conclusion, the appeal was treated as allowed by way of remand, emphasizing the appellant's entitlement to a refund and the incorrect insistence on unnecessary documentation by the Revenue.