2023 (1) TMI 395 - AT - Customs

Refund of SAD - original files/documents/Bills of Entries were seized by Superintendent(Preventive) - rejection of refund also on the ground of time limitation - HELD THAT - In the present case there is no denial of the fact that the appellant was not in position to file the refund claims within the prescribed period of limitation for the reason that the documents on the basis of which these refund claims were to be filed were under seizure and were seized prior to the expiry of the period of limitation. Both the lower authorities have observed that the refund claims could have been filed without these documents on the basis of the book of accounts maintained by the appellant. There are no merits in this observation in view of the specific provisions of Section 27 (1A) reproduced above as per which refund claims are to be filed along with the required documents. Even if the refund claims would have been filed without these documents, the same could again have been rejected for the absence of these documents or returned along with the deficiency memo for being re-submitted. In any case the refund application would not have been acknowledged by the department till it was filed along with all the documents. Undisputedly the necessary documents which were required for filing this refund application were under seizure, and the refund application would not have been acknowledged by the revenue authorities without these documents. The condition which is stated to be the reason for rejection of the refund claims is something which could not have been complied with. Appeal allowed.

Issues Involved:
1. Timeliness of the refund claim under Section 27 of the Customs Act, 1962.
2. Impact of seizure of documents on the ability to file refund claims.
3. Compliance with the conditions set out in Notification No. 102/2007-Cus and its amendments.

Detailed Analysis:

Timeliness of the Refund Claim:
The central issue in this case is whether the refund claims were filed within the statutory time limit prescribed by Section 27 of the Customs Act, 1962. The appellant argued that the delay in filing the refund claims was due to the seizure of the necessary documents by the Customs Department. The documents were seized on 10.03.2017 and returned on 11.01.2018. The appellant filed the refund claims on 22.02.2018, which was beyond the one-year statutory limit from the date of payment of duty.

Impact of Seizure of Documents:
The appellant contended that the delay in filing the refund claims was not due to their fault but because the documents required for filing the claims were seized by the Customs Department. The appellant cited multiple correspondences requesting the return of the documents, which were eventually returned on 11.01.2018. The appellant relied on several judicial decisions, including Stargold International, Gravita India Ltd., and Kaamdaa Impex, to argue that the period during which the documents were seized should be excluded from the limitation period.

Compliance with Notification No. 102/2007-Cus:
The Commissioner (Appeals) rejected the refund claims on the grounds that they were filed beyond the one-year statutory limit and did not comply with the conditions set out in Notification No. 102/2007-Cus. Specifically, the Commissioner noted that the invoices did not have the required endorsement stating that no credit of the additional duty of customs would be admissible. The Commissioner also observed that the appellant could have filed the refund claims based on their book of accounts, even without the seized documents.

Judgment:
The Tribunal considered the arguments and the impugned order. It noted that the appellant was unable to file the refund claims within the prescribed period due to the seizure of documents. The Tribunal found no merit in the observation that the refund claims could have been filed without the seized documents, as Section 27(1A) of the Customs Act requires the claims to be accompanied by specific documents. The Tribunal cited the Custom Manual, 2018, and Regulation 2 of the Customs Refund Application (Form) Regulation, 1995, which mandate the submission of complete documentation for refund claims.

The Tribunal referred to the decisions of the Rajasthan High Court in Gravita India Ltd. and the Madras High Court in Kaamdaa Impex, which held that the period of limitation should be considered from the date the necessary documents were made available by the Customs Department. The Tribunal concluded that the appellant could not have complied with the condition for filing the refund claims due to the seizure of documents.

Conclusion:
The Tribunal allowed the appeal and set aside the impugned order, holding that the refund claims were filed within the stipulated time after excluding the period during which the documents were seized. The Tribunal directed the lower authorities to process the refund claims on merits, considering the exclusion of the period of seizure from the limitation period.

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