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TMI Blog2024 (11) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority, after going through the facts and submissions made by the appellant, inter alia, held the refund claim as time barred as the same was not filed before the expiry of one year period from payment of Duty and interest. In fact, the original authority also excluded the period from 15.03.2020 till 28.02.2022 on account of Hon'ble Supreme Court's general order with regard to extension of limitation period due to COVID-19 and thereafter worked out the due date for filing refund application as on or before 29.05.2022. However, since even after this exclusion, the refund application was filed much beyond the limitation period, it was held as time barred, considering the statutory provisions under Section 27 of the Customs Act, 1962. He also distinguished various case laws cited by the appellant and relied on the judgment of Hon'ble Supreme Court holding that for the refund of any amount under Section 11B, the time limitation has to be followed mandatorily. He has also relied on the judgments in the following cases in support of his conclusion that provisions for time limit under the statute are mandatory and that a statutory authority cannot traverse beyond the confines of law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g judgments in support that time limit prescribed under Section 27 of the Customs Act would not be attracted in the facts of the case:- a) Mafatlal Industries Ltd Vs UOI [1997 (89) ELT 247] b) CCE (Appeals) Vs KVR Construction [2012 (26) STR 195 (Kar)] c) Geojit BNP Paribhas Financial Services Ltd Vs CCE [2015 (39) STR 206] d) Hind Agro Industries Ltd Vs CC [2008 (221) STR 336] e) GB Engineers Vs UOI [2016 (43) STR 345] f) Joshi Technologies International Vs UOI [2016 (339) ELT 21] 6. Learned Advocate for the appellant has mainly argued that in the facts of the case, the amount deposited again on 17.01.2020 was not in the nature of duty but it was in the nature of deposit and therefore, the provisions of Customs Act would not be applicable and instead the provisions of General law of limitation would be applicable. As per the limitation law, three years period is admissible and if the period between 15.03.2020 and 28.02.2022 is excluded in view of the order of the Hon'ble Supreme Court for exclusion of the same for computing limitation period on account of COVID, then the claim has been filed well within the period of three years. He has vigorously canvassed that Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f) Andrew Telecom (I) Pvt Ltd Vs CC & CE, Goa [2014 (34) STR 562 (Bom)] g) Uniroyal Marine Exports Ltd Vs CCE, Kozhikode [2021 (54) GSTL 156 (Ker)] h) Cummins Technologies India Pvt Ltd Vs UOI [2023 (386) ELT 494 (Bom)] Essentially, in all these cases cited by learned AR, various Hon'ble High Courts have taken a view that in view of the decision of Hon'ble Supreme Court in Mafatlal Industries Ltd (supra), even in the case of excess or double payment of tax or duty due to mis-construction, mis-interpretation or error of facts or law, the same has to be regulated by the provisions and rigour of limitation as provided under statutory provisions. In the case of MGM International Exports Ltd (supra), the Hon'ble Madras High Court held that payment of tax and appropriation and collection by service tax department at best was on account of mis-construction of provision of Finance Act and therefore, any refund of such tax paid or borne by any person would be governed by provisions of Central Excise Act as made applicable to refund under Finance Act, 1994. In the case of Cannanore Handloom Exports (supra), the Hon'ble High Court of Kerala relying on their earlier judgment of Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions vide their email dt.30.10.2024 in view of permission granted by the Bench for filing of additional submissions to the appellant as well as the department. 11. Learned Advocate has again reiterated that in view of the judgments cited viz., Mafatlal Industries Ltd vs UOI, UPL Ltd vs UOI, DHL Express India Pvt Ltd Vs CST and Vedanta Ltd Vs CC (all cited supra), the payment of duty by them in respect of which refund has been sought, cannot be treated as duty and therefore, will not be regulated by limitation provided within Section 27 of the Customs Act. He has further relied and elaborated on the judgments in the case of Ericsson India Pvt Ltd Vs CC [2022 (5) TMI 587 - CESTAT New Delhi], wherein it was held that double payment cannot be treated as duty and must be refunded as the department has no legal authority to retain them. Similarly, in the case of United News of India Vs UOI [2004 (168) ELT 442 (Del)], the Hon'ble Delhi High Court ruled that payments made in advance without assessment do not constitute duty and should be refunded without applying Section 27 limitations. He has further submitted that the Customs Authorities should refund excess payment suo moto rely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les under Article 265 of the Constitution in light of the Mafatlal (supra) and Vedanta (supra) case which are binding. 12. He has also made additional submissions stating that in the facts of the case, they were forced to make additional payment on 17.01.2020 because the payment made on 10.01.2020 was rejected and therefore, the payment on 17.01.2020 is nothing but under protest. They have made a payment of Rs.50,393/- on 17.01.2020. 13. Learned AR has submitted, by way of additional submissions dt.30.10.2024, that it is not correct to say that the appellant had not claimed the refund of the amount as duty as they had paid the amount of Rs.5,03,984/- vide Challan No. CKL9331354 as customs duty and again filed for refund on 04.08.2023 asking for refund of customs duty paid in excess and therefore, the claim has to be examined within the purview of Section 27 of the Customs Act. He has also submitted that the reliance placed on the decisions viz., UPL Ltd (supra) and DHL Express India Pvt Ltd (supra) are not correct as these decisions have not taken into consideration the majority decision of the constitutional bench in the case of Mafatlal Industries Ltd (supra) at Para 99 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellants have claimed the same as refund of excess paid customs duty and have filed the claim before the appropriate authority under the Customs Act and also went in appeal against the order to the appellate authority governed by the Customs Act. Learned AR relies on the judgment of Hon'ble Supreme Court in the case of Miles India Ltd Vs Asst. Collector of Customs [1987 (30) ELT 641 (SC)], wherein, it was, inter alia, held that there was no error in the order passed by the CEGAT against which the appellant had come to Hon'ble Supreme Court. The issue was whether the Customs Authorities, acting under the Act, were justified in disallowing the claim for refund as they were bound by the period of limitation provided therefor under Section 27(1) of the Customs Act, 1962 or otherwise. The Tribunal, relying on the judgments of Hon'ble Supreme Court in the case of Commissioner of Sales Tax, UP Vs M/s Parson Tools and Plants, Kanpur [AIR-1975-SC-1039] and in the case of Sharif Ahmad and others etc Vs The Regional Transport Authority, Meerut and others etc [AIR- 1978-SC-209], had, inter alia, held that any claim filed before the Customs Authorities for refund of excess duty has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same cannot be retained by the Department and needs to be refunded. They have also relied on certain decisions of the coordinate benches of Hon'ble Gujarat High Court, where refunds have been allowed under similar situation. Essentially, the Hon'ble High Court has held that where the payment of duty has been made under mistake, the statutory time limit would not be applicable. Similarly, in the case of DHL Express India Pvt Ltd (supra), the Hon'ble High Court of Karnataka, inter alia, keeping in view the judgment of Hon'ble Supreme Court in the case of Mafatlal Industries Ltd (supra), held that when the duty is paid without authority of law, the refund provisions under Section 27 of the Customs Act would not be applicable and the limitation in terms of Limitation Act would be applicable. This judgment relied on the cases of Mafatlal Industries Ltd, KVR Construction (supra), Geojit BNP Paribhas Financial Services Ltd (supra), Hind Agro Industries Ltd (supra), GB Engineers (supra) and Joshi Technologies International (supra) and came to the conclusion that for the customs duty paid in excess, the Department is liable to refund the same and limitation provided under Section 27 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me to time) or Section 11B (as it obtained before 1991 or subsequent thereto), they invariably purported to be exhaustive on the question of refund. Rule 11, as in force prior to August 6, 1977, stated that "no duties and charges which have been paid or have been adjusted....shall be refunded unless the claimant makes an application for such refund under his signature and lodges it to the proper officers within three months from the date of such payment or adjustment, as the case may be". Rule 11, as in force between August 6, 1977 and November 17, 1980 contained sub-rule (4) which expressly declared: "(4) Save as otherwise provided by or under this rule, no claim of refund of any duty shall be entertained". Section 11B, as in force prior to April, 1991 contained sub-section (4) in identical words. It said : "(4) Save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be entertained". Sub-section (5) was more specific and emphatic. It said : "Notwithstanding anything contained in any other law, the provisions of this section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alidity was beyond challenge. To repeat - and it is necessary to do so - so long as Section 11B is constitutionally valid, it has to be followed and given effect to. We can see no reason on which the constitutionality of the said provision - or a similar provision - can be doubted. It must also be remembered that Central Excises and Salt Act is a special enactment creating new and special obligations and rights, which at the same time prescribes the procedure for levy, assessment, collection, refund and all other incidental and ancillary provisions. As pointed out in the Statement of Objects and Reasons appended to the Bill which became the Act, the Act along with the Rules was intended to "form a complete central excise code". The idea was "to consolidate in a single enactment all the laws relating to central duties of excise". The Act is a self-contained enactment. It contains provisions for collecting the taxes which are due according to law but have not been collected and also for refunding the taxes which have been collected contrary to law, viz., Sections 11A and 11B and its allied provisions. Both provisions contain a uniform rule of limitation, viz., six months, with an exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpressly barred by the provisions in the Act, viz., Rule 11 and Section 11B. For this reason, a suit for refund would also not lie. Taking any other view would amount to nullifying the provisions in Rule 11/Section 11B, which, it needs no emphasis, cannot be done. It, therefore, follows that any and every claim for refund of excise duty can be made only under and in accordance with Rule 11 or Section 11B, as the case may be, in the forums provided by the Act. No suit can be filed for refund of duty invoking Section 72 of the Contract Act. So far as the jurisdiction of the High Court under Article 226 - or for that matter, the jurisdiction of this court under Article 32 - is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment. .... .... 96. It would be evident from the above discussion that the claims for refund under the said two enactments constitute an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it. The said enactments including Section 11B of Central Excises and Salt Act and Section 27 of the Customs Act do constitute "law" within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties, imposed thereunder . Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutory doctrine. No person can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble High Court of Chennai also made observation with regard to various case laws cited by the petitioners to the effect that those decisions have either not considered the majority decision of Hon'ble Supreme Court in the case of Mafatlal Industries Ltd (supra) in its proper perspective or have ignored the same altogether. In the case of Uniroyal Marine Exports Ltd (supra), the Hon'ble High Court of Kerala upheld the decision in the case of Southern Surface Finishers (supra). Para 11 of the said order is reproduced below for ease of reference:- "11. At the risk of repetition, here, the assessees paid up the tax and later realised that they are entitled to exemption. Going by the majority judgment, in Mafatlal Industries Limited (supra), we have to find such cases being subjected to the rigour of limitation as provided under Section 11B. The limitation, in the relevant period, being one year, there could be no refund application maintained after that period. We, hence, find the order impugned in the writ petitions to be proper and we dismiss the writ petitions. We hold that the judgment dated 6-7-2015 in WP (C) No. 18126/2015 [2015 (39) S.T.R. 706 (Ker.)] [M/s. Geojit BNP Pariba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents. Where the duty has been levied without authority of law or without reference to any statutory authority or the specific provisions of the Act and the Rules framed thereunder have no application, the decision will be guided by the general law and the date of limitation would be the starting point when the mistake or the error comes to light, but as held in the said decision, in making claims for refund before the departmental authority, an assessee is bound within the four corners of the statute and the Rules framed thereunder must be adhered to; the authorities functioning under the Customs Act are bound by the provisions of the Customs Act and if the proceedings are taken under the Customs Act by the department, the provisions of limitation prescribed in the Customs Act will prevail." 24. I also find that in a recent judgment by the Larger Bench of the Tribunal in the case of Oil and Natural Gas Corporation Ltd [Final Order No. 40696 of 2024 dt.20.06.2024], it was, inter alia, held that all refunds relating to illegal levy have to be pursued under Section 11B of Central Excise Act with an exception to the jurisdiction of High Courts under Article 226 and Supreme Court u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be. Further, it is laid down that these Acts provide a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to the Tribunal which is not a departmental organization, but to this court which is a civil court." 25. Therefore, the arguments made by the learned AR and the case laws cited would indicate that refund of any kind arising on any ground, except on the ground of unconstitutionality of the levy, has to be dealt with in accordance with the provisions of the statute and even if a person calls a double payment or triple payment as deposit but once it has been paid as if it was being paid in discharge of levy or duty, it would be in the nature of duty itself even if at a later date it was found to be in excess or was not required to be paid at all for any reason other than the levy itself is held as unconstitutional. The law provides for remedy in the Act itself, however, that is subject to certain procedures and limitations. There is no unconstitutionality about either levy of Customs Duty under the proper provisions or for processing of refunds under Section 27. The grounds for seeking refund can be many and varied but the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the rule of limitation under Section 11B was applied. That was applied when the application for refund was made invoking Section 11B of the Central Excise Act, 1944. We have no manner of doubt that when this was the provision invoked, same applies with full force including the rule of limitation prescribed therein. For these reasons, we are of the opinion that the decisions relied upon cannot be of any assistance." 26. Similarly, in the case of DHL Express India Pvt Ltd (supra), reliance has also been placed on Geojit BNP Paribhas Financial Services Ltd (supra), which was held to be "not good law" by the Division Bench of Hon'ble Kerala High Court in the case of Southern Surface Finishers (supra). The judgment in the case of Hind Agro Industries Ltd (supra), relied upon by the appellant, was distinguished by the Division Bench of Hon'ble Delhi High Court in the case of HT Media Ltd [2017 (6) GSTL 266 (Del)]. In fact, in the case of HT Media Ltd (supra), the Hon'ble Delhi High Court, at Para 9, held as follows:- "9. In both, Hind Agro Industries Limited (supra) and Alar Impex Private Limited (supra), the question examined was whether the levy in question, which was cess in one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the matter was remanded. In the case of Formica India Division Vs CCE [1995 (77) ELT 511 (SC)], the facts are on a different footings and can be distinguished from the factual matrix of the present appeal. Appellants have also relied on the judgment of Hon'ble Supreme Court in the case of Auriaya Chamber of Commerce (supra) where the assessment order and the realization of money was based on ultra vires provision of the UP Sales Tax Act and therefore, even as held in the case of Mafatlal Industries Ltd (supra), such cases would not attract Section 27 or limitation. Therefore, this is also not applicable to the present case. 28. Therefore, on appreciation of various case laws of Hon'ble Supreme Court, Hon'ble High Courts and Tribunals, I am of the view that barring the situation where the refund is filed on account of unconstitutionality of the levy itself, all kinds of refund have to be dealt with the statutory provisions within the statute and its entire provisions would be applicable in full force including limitation. In the present appeal, it is not disputed that the amount has been paid twice because of some miscommunication or any other factor including what appellants a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g an additional submission of claiming the payment of excess duty as being "under protest". In so far as their reiterations of judgments are concerned, this has already been discussed in foregoing paras. As far as the issue of payment under protest is concerned, I do not find any ground or evidence on record to suggest that the payment was made under protest. It is a case where the payment made on 17.01.2020 is apparently under certain mistaken belief or fact that the original payment has not been credited to the Government account and therefore, the full amount was again paid. It is obvious from the perusal of the screenshot that it was not accepted on the ground that challan was rejected initially as the duty was short paid, which was made good on 17.01.2020. Thus, the first payment on 10.01.2020 as well as additional payment made subsequent thereto, on 17.01.2020 have all been made in the nature of customs duty only even though it may be an excess payment of duty than what was otherwise required to be paid. In view of the clear decision of the Hon'ble Supreme Court, it is now a settled position that except for unconstitutionality of the levy, the rest of the refunds are to be de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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