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TMI Blog2023 (9) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... er that pursuant to a certificate dated 2.7.2019 by Petitioner s Chartered Accountants that Petitioner engaged with the Customs Department. All that the Certificate states is that based on verification of such records as produced to them and as per the information and explanation given to them by the Petitioner, they have certified that the Company filed a claim for refund of the IGST paid as the same was paid twice against the import of the components - There is no whisper of the time or the circumstances under which said mistake was discovered by the Petitioners. It appears that the said certificate had been issued at the behest of the Petitioner itself and the certificate nowhere suggests that the Chartered Accountants had discovered the mistake at a point in time and brought it to the notice of the Petitioner. The Petitioner has relied upon the decision of the Hon ble Supreme Court in the case of Vedanta Limited vs. Commissioner of Customs (Port) and Anr. [ 2016 (12) TMI 266 - SC ORDER ] . The Petitioner therein had filed application for refund of the amount of the customs duty paid in excess as the goods for export were short shipped. The Commissioner of Customs h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of this case, no interference is called for in the impugned order dated 8 November 2019 passed by the Assistant Commissioner of Customs, Refund Section, ACC, Mumbai, under Section 27 of the Customs Act, 1962 - Petition dismissed. - NITIN JAMDAR AND ABHAY AHUJA, JJ. For the Petitioner : Mr. Rahul Totala a/w. Mr. Ashwin Poojari i/b. RT Legal, Advocate. For the Respondents : Mr. Pradeep S. Jetly, Senior Advocate a/w. Mr. Jitendra B. Mishra, Advocate. Mr. Rafiq Dada, learned Senior Advocate along with Advocate Mr. Zubair Dada, Amicus Curiae. JUDGMENT (PER COURT): 1. This Petition impugns the rejection of a refund claim of Rs. 38,90,832/- vide order dated 8 November 2019 passed by the Respondent no. 3-Assistant Commissioner of Customs, Refund Section, ACC, Mumbai, as being time barred and not sustainable under Section 27 of the Customs Act, 1962, (the Customs Act ) and seeks a direction to the Respondent no. 3 to refund the said amount to the Petitioner. Additional affidavit dated 6 August 2021 has also been filed by the Petitioner in support of the Petition. 2. The Petitioner, being a company incorporated under the Companies Act, 1956, engage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) The excess/double duty claimed as refund has not been passed on to any other person by this importer/buyer. Date 30.07.2019 For CUMMINS TECHNOLOGIES INDIA PVT LTD Authorised Signature (emphasis supplied) 7. On 8 November 2019, Respondent no. 3 rejected the claim of refund as time barred and not sustainable under Section 27 of the Customs Act, as the application was filed beyond a period of one year from the date of payment of duty. For the sake of convenience the said order of rejection is quoted as under : OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS;(IMPORT) REFUND SECTION, AIR CARGO COMPLEX, SAHAR ANDHERI(EAST), MUMBAI-400 099. F.No. S/3-MISC-177/19-20/CRC-1/ACC(R)(1) Date: 08.11.2019 To, M/s. Cummins Technologies India Pvt. Ltd., GAT No. 311/1B, At Post Kasar, Amboli 34 Taluka, Mulshi (Paud), Pune-412111. Sub : Refund application of Rs. 38,90,832/-reg. During the scrutiny of the submitted documents along with refund application it is found that: (III) The duty paid against these Bs/E is in July, 2017 and you have filed the refund in this Section on 24.10.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n excess, Petitioner has immediately within 20 days taken steps as they were advised in law for seeking return of the same. It is submitted that the Petitioner was intimated the mistake by the Chartered Accountant on 2 July 2019; thereafter, the customs department sent an email to Petitioner on 10 July 2019 and Petitioner made an application for refund on 30 July 2019, which is within twenty days; (iv) Alternatively, it is submitted that the limitation period prescribed under Section 27 of the Customs Act is not applicable, more particularly in the background of the email dated 10 July 2019 from the Customs Department. It is submitted that in any event, in view of Section 29 (2) of the Limitation Act, 1963, the application for refund before the authority was within time as the limitation would begin from the date of knowledge of the mistake and not from the date of making of the excess payment; (v) It is submitted on behalf of the Petitioner that the rejection order dated 8 November 2019 was received by Petitioner by speed post on 18 November 2019; thereafter, in view of the surge in the Covid -19 virus there was a lock down imposed in the country from March 2020; Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner has not challenged the assessment order till date and therefore, Petition is liable to be dismissed on this ground alone. 13. Mr. Jetly would next submit that the refund application being barred by limitation was correctly rejected by the authorities. Learned Senior Counsel would submit that the payment of duty was made by Petitioner on 5 July 2017 and on 11 July 2017; as per Section 27 of the Customs Act, which is the only provision pertaining to refund of duty, the refund application is to be made within a period of one year from the date of payment of duty. However, in the present case Petitioner had filed the refund application only on 30 July 2019 i.e. after more than two years of payment of duty and therefore, the Respondent No. 3 was right in rejecting the claim on the ground of limitation. Learned Senior Counsel submits that the authorities had no power to grant the refund and were bound by the provisions of Section 27. 14. Mr. Jetly further submits that the impugned order dated 8 November 2019 rejecting the refund claim of Petitioner was appealable before the Commissioner (Appeals) under the provisions of Section 128 of the Customs Act. However, the appeal was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the limitation prescribed for seeking refund under Section 27 of the Customs Act where excess duty has been paid as in the facts of this case, keeping in mind Article 265 of the Constitution of India which requires that no tax can be collected without authority of law and requested Mr. Rafiq Dada, learned Senior Counsel of this Court along with Counsel Zubair Dada to assist the Court. 18. The learned Amicus Curiae have very meticulously taken us through the law thus far on the subject by drawing our attention to the following decisions: 1. M/s Hindustan Cocoa Products Ltd Vs. The Union of India and Ors. 1994 SCC OnLine Bom, 169. 2. M/s Parijat Construction Vs. Commissioner of Central Excise, Nashik. Central Excise Appeal No. 306 of 2016. 3. Salonah Tea Co. Ltd. and Ors. Vs. Superintendent of Taxes, Nowgong and Ors. (supra). 4. M/s DHL Express India Pvt. Ltd. Vs. The Commissioner of Service Tax, Bengluru Service Tax-1. CSTA No.5/2018 of Karnataka High Court. 5. UPL Limited Vs. Union of India and Ors. R/Special Civil Application No. 2239 of 2019 dated 28 July 2021 6. Vedanta Limited Vs. Commissioner of Customs (Port) and Anr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of UPL Limited vs. Union of India and Ors. (supra), that it was held that payment made on account of a bonafide mistake would not be covered by the limitation under Section 27 of the Customs Act. 21.2 In that case Petitioner therein had imported certain goods for which total amount of Rs. 17,25,172/- was deposited in IDBI Bank towards customs duty and for which e-payment receipt was issued by the authority on 11 April 2016. Petitioner therein had imported another consignment of goods and had paid an amount of Rs. 95,07,943/- on 12 April 2016 on the next date of the earlier first deposit. It was the case of the Petitioner that it was supposed to pay customs duty for the second consignment of Rs. 77,82,771/-, however, due to oversight and bonafide mistake, the Petitioner paid an amount of Rs. 95,07,943/- adding the earlier amount of Rs. 17,25,172/-. Having come to know about the same an application in Form 102 under Section 27 of the Customs Act was filed with the Respondent authority on 24 January 2018 and the ground of claim was stated to be that the duty amount of Rs. 17,25,172/- was paid twice through oversight and mistake and therefore, the same was liable to be refunded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olutions, Cummins Business Services, Cummins Fuel Systems India, Cummins Technical Center India, Phaltan Engine Plant, Global Analytics Center, Supply Chain Operations. It is also a leading global designer, integrator, manufacturer and distributor of exhaust after treatment systems and components for on and off-highway medium duty, heavy duty and high horsepower engine markets and expected to be conducting its affairs and management in a diligent manner guided by professionals. 25. In the course of its business, Petitioner has been importing various materials to manufacture and distribute exhaust after treatment systems; while importing the said materials Petitioner paid IGST for imports made vide three bills of entry nos. 2297141, 2297232 and 2297331 of a total of Rs. 38,90,832/- on 5 July 2017. It is the Petitioner s case that pursuant to request by the Respondent, to pay differential duty, instead of paying difference in duty, the Petitioner has paid an amount of Rs. 42,08,551/- on 11.7.2017 in respect of the three bills of entry resulting in payment of excess or double duty. 26. This Writ Petition has been filed inter alia submitting as under: 3. The present Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Customs Air Cargo Complex, Sahar Andheri Mumbai 400099. Annexed herewith and marked as Exhibit C to the copy of refund application dated 30.07.2019. 5.5 Thereafter, the Assistant Commissioner of Customs i.e. Respondent no. 3 issued a order dated 08.11.2019 rejecting the refund application filed by the Petitioner on the ground that the refund application filed by the Petitioner is not within the prescribed time limit as given under Section 27 of the Customs Act, 1962. Annexed herewith and marked as Exhibit D to the copy of order dated 08.11.2019. 5.6 However, in the instant matter, the Petitioner has filed refund application on 30.07.2019 for the amount which was paid twice which is deposit which was paid on 05.07.2017. 5.7 Further the Respondent no. 3 while rejecting the refund application issued a mere letter rejecting the lawful refund claim of the Petitioner on the ground of limitation. It is pertinent to note that, the impetuous manoeuvre of the Respondent no. 3 of issuing a letter cannot be challenged before any appellate authority as the law doesn t prescribe any provision for the challenging the same. 5.8 The Petitioner states that the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27. In the additional affidavit filed on behalf of the Petitioner, in support of the Writ Petition, it is stated on oath that it is the email dated 10.7.2019 from the Customs Department insisting that Petitioner make payment of unpaid challan reflecting on the ICEGATE portal which has resulted in double duty payment on duty on 5.7.2017. It is submitted in the Petition as well as in the affidavit that the Petitioner paid duty twice on 5.7.2017 and 11.7.2017 and because they paid excess on 5.7.2017, the Petitioner filed refund application dated 30.7.2019 under Section 27 of the Customs Act for refund of excess amount paid on 5.7.2017 to the Assistant/Deputy Commissioner of Customs Air Cargo Complex, Sahar, Andheri, Mumbai in proper format which came to be rejected by an order dated 8.11.2019 on the ground that the refund application filed by the Petitioner was not within the prescribed time limit under Section 27 of the Customs Act. It has been submitted that Petitioner had filed refund application for an amount which was paid twice and which was a deposit and the rejection on the ground of limitation is invalid and illegal as the same cannot be challenged before any Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide Bill Of Entry Nos. 2297141, 2297232 and 2297331. The Company had paid IGST of total Rs. 38,90,832 (Rs. 87,077 Rs. 7,32,344 and Rs. 30,71,411 respectively). 2. The Company had filed a claim of refund of the said IGST paid, as the same is paid twice against the import of the components. 3. As per the consistent accounting practice followed by the Company, the said IGST paid is has not been added to the cost of manufacture of the end product nor any ITC credit availed. 4. The said amount of IGST paid thereon, (total amount Rs. 38,90,832), is shown as receivable in the General Leger of the Company, up to the date of this report. Hence, the above refund claim Rs. 38,90,832 made by the Company does not amount to unjust enrichment. For U.V.Bodas Co. FRN 101537W Chartered Accountants Sd/- Illegible U.V.Bodas Proprietor M. No. 041343 Pune 2nd July, 2019 UDIN : 19041343AAAALU2933 31. All that the Certificate states is that based on verification of such records as produced to them and as per the information and explanation given to them by the Petitioner, they have certified that the Company fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner made payment of unpaid challan reflecting on the ICEGATE portal. That, in our view, is completely fallacious in as much as the second payment dated 11 July is of the year of 2017 whereas the email of 10 July from the Respondent Authorities is of the year 2019. The Petitioner clearly has no explanation for the two year delay in filing the refund application on 30.7.2019 and is somehow or the other now unsuccessfully attempting to explain the delay by completely illogical sequence of events which cannot be countenanced in fact or in law. The Petitioner it seems to us is not approaching this Court with clean hands. 34. It is unbelievable and rather surprising that the Petitioner s management as well as the Chartered Accountants missed out this rather glaring financial spectacle. Limited companies are expected to conduct their management and affairs professionally and with due care and diligence. There is no explanation, whatsoever, on the fact that Petitioner, despite being a public listed company, could not have discovered the lapse in time. What due care and diligence was exercised by Petitioner or its Management is also not specified. And after the mistake was discovered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mistake was usually followed in case of a refund of tax made under mistake, however, as observed earlier, the mistake of law or fact has to be bonafide and as we have held that the Petitioner has not been able to establish that the said mistake was bonafide, the said decision would not assist the Petitioner. 37.2. For the same reason, the decision of the Allahabad High Court in the case of Guru Charan Industrial Works Vs. Union of India and Others (supra), where the Allahabad High Court held that a Writ Court can be approached for refund of tax within a period of three years from the date of knowledge of mistake of law that either in respect of monies paid to the government or the State, the State had no right to receive or that there was an exemption from payment under any provision of law and that the statutory limitation under Section 11B would not apply would not assist the Petitioner as in the case at hand we have held that the Petitioner has been unable to establish that the said mistake was a bonafide mistake of law or fact. To invoke remedy under Article 226, the Petitioner has to come with clean hands in addition to the mistake being bonafide, which we have alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. 41. We are, therefore, of the considered view that in the facts and circumstances of the case, there being no bonafide mistake of law or fact established by the Petitioner, the limitation prescribed under Section 27 of the Customs Act would apply to the case of the Petitioner. 42. Section 27 of the Customs Act is quoted as under: 27. Claim for refund of duty (1) Any person claiming refund of any duty or interest, (i) paid by him; or (ii)borne by him, may make an application in such form or manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest. PROVIDED that where an application for refund has been made before the date on which the Finance Bill, 2011 receives the assent of the President, such application shall be deemed to have been made under sub-section (1), as it stood before the date on which the Finance Bill, 2011, receives the assent of the President and the same shall be dealt with in accordance with the provisions of sub-section (2): PROVIDED FURTHER that the limitation of one year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TC LTD V/s Commissioner of Central Excise, Kolkata IV (supra) to submit that the refund application was not maintainable. That, Petitioner ought to have filed an appeal against the self assessed bills of entry and only on setting aside of the said assessment, the refund application could have been filed. And that, the Respondent no. 3 was right in rejecting the refund claim on the ground of limitation. 44.2 The Hon ble Supreme Court in the case of ITC LTD V/s Commissioner of Central Excise, Kolkata IV (supra) has observed that endorsement made on the bill of entry is an order of assessment. That u/s 17(1) of Finance Act 2011, there is a provision to self assess the duty, if any, leviable on such goods by importer or exporter as the case may be. Self-assessment is an assessment as per the amended Section 2(2). Section 27 of Customs Act provides that any person claiming refund of any duty or interest paid or borne by him may make an application in prescribed form and manner for the refund before the expiry of one year from date of payment of such duty / interest. No doubt the expression which was used in Section 27(1)(i) that, In pursuance of order of assessment has been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd then an application for refund. 44.4 Similar view has taken by this Court in Andrew Telecom (i) V/s Commissioner of Custom and Central Excise Goa 2014 (34) S.T.R. 562 (BOM). A Division Bench of this Court has in the case of Commissioner of Custom (Import) V/s Indian Farmers Fertilizer Co-operative Ltd. 2009 (243) E.L.T. 687 (Bom) has held that till assessment order is rectified, the question of refund would not arise. 44.5 However, the Respondent authorities have not rejected the refund application of the Petitioner on the ground that the self-assessment order should have been modified. In any case, since we have already observed that the application for refund of the excess of duty under Section 27 of the Customs Act was filed beyond the period of limitation, and having held the Petitioner has been unable to establish that the mistake was bona fide, the Petitioner would not be able to escape the limitation under Section 27, we do not deem it necessary to consider the issue of maintainability of the refund application, which has been rejected on the ground of limitation. 45. Mr. Jetly, learned Counsel for the Respondents, has also submitted that unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind the legislative intent and not to render the statutory provision otiose . 47. Further, the period of ninety days has expired much before 16 March 2020, and therefore, the benefit of the suo motu order of the Hon'ble Apex Court extending or excluding the time period between 16 March 2020 and 20 February 2022 on account of Covid-19 pandemic, as claimed by the Petitoner, would also not be available to the Petitioner. 48. Therefore, it is clear that the Petitioner has been negligent in pursuing its statutory remedies and now is seeking the indulgence of this Court in its writ jurisdiction which we are not inclined to exercise as we have found that the Petitioner has not been able to establish that the mistake was bonafide nor has the Petitioner come with clean hands. 49. The Petition also suffers from delay and laches. Even assuming that the impugned order rejecting the refund claim of the Petitioner on 8.11.2019 was received by the Petitioner on 18.11.2019, the Petitioner has filed the present Petition only on 14th September 2020. Therefore, apart from the fact that the Petition is filed more than three years after the date of excess payment of customs duty on 11.7. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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