Admissibility of Refund claim of duty paid under protest

PJ/Case Laws/2011-12/1268

Admissibility of Refund claim of duty paid under protest - filed after 6 months

Case: REDINGTON INDIA LTD. Vs. COMMISSIONER OF CUSTOMS, CHENNAI

Citation: 2011 (269) E.L.T. 233 (Tri.- CHENNAI)

Issue:- Refund claim of duty paid under protest – dispute settled but refund claim filed after periof of 6months - Whether refund claim is admissible?

Brief Facts:- Appellant-importer paid duty under protest on the goods imported vide 3 bills of entry. They were disputing the assessment made by the Department and claiming nil rate of duty. The dispute of assessment was decided by the Lower Appellant Authority on 24.5.2007 by virtue of which the appellants became eligible for refund of the impugned amount in the respect of the impugned three Bills of Entry. The appellant filed a refund claim only on 21.2.2008. The Original Authority has rejected the refund claim filled by the appellants in respect of three Bills of Entries holding the same to be time-barred. The Lower Appellant Authority has rejected the appeal of the appellants. Hence, this appeal filed before the Tribunal.

Appellant’s Contention:- Appellant stated that in respect of three Bills of Entry the appellant has paid the duty under protest on 27.12.2006. He argued that in respect of amount paid under protest, the time limit prescribed under Section 27 of the Customs Act, 1962 does not apply hence the Authority have wrongly rejected the refund claim of the appellants as time-barred. He also refers to the Department Manual which states that for duty paid under protest, the time limit of six months does not apply.

Respondent’s Contention:- Revenue stated that the protest lodged by the appellants automatically gets vacated after the assessment dispute is decided finally by the Lower Appellate Authority. Revenue also states that the protest does not entitle the appellants to claim a refund without any time limit. Revenue cites the specific provision in the fourth proviso to sub-section (1) of the section 27 under which the time limit of six months is applicable from the date of the order of the Appellate Authority.

Reasoning of Judgement:- The Tribunal held that the main provision under Section 27(1) requires a refund claim to be filled within six months from the date of payment of duty. The second proviso to Section 27 (1) states that the limitation of Six month shall not apply where any duty has been paid under protest. Subsequently the forth proviso states that where the duty becomes refundable as a consequence of any judgement, degree, order or direction of the Appellate Authority, Appellate Tribunal or any Court, the limitation of six months shall be computed from the date of such judgement, degree, order or direction. Both these provisions require to be read harmoniously.

It was held that the dispute in assessment came to finality once the matter was decided in favour of the appellants by the lower appellant authority and the department choose not to file any further appeal against the same. Once the very cause of the protest came to an end by the resolution of the assessment dispute at the hands of the Lower Appellate Authority, it cannot be held that the protest would survive beyond the date of the order passed by the lower appellate authority in favour of the appellants. Thereafter, it was the duty of the appellants to take steps to file necessary refund claims within the time limit prescribed. The forth proviso prescribing limitation of six months from the date of a judgment order of the appellate authority, applicable in this case. The appellant had only six months time from 24.5.2007(Date of decision in favour of the appellant) to file a refund claim. As they have not filed refund claim within the prescribed time limit, the refund claim is not admissible. No interference required with the orders of the Lower Authority

Decision:- Appeal dismissed.

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PJ/Case Laws/2011-12/1268

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