Custom duty Refund Limitation Starts Starts from Re-Assessment Date: CESTAT Mumbai
Seal For Life India Pvt Ltd Vs Commissioner of Customs (NS-I) (CESTAT Mumbai)
In the case of Seal For Life India Pvt Ltd Vs Commissioner of Customs (NS-I), the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Mumbai ruled on the appropriate limitation period for claiming a refund under Section 27(1B) of the Customs Act. The dispute arose from five bills of entry filed by the appellant between April 30 and May 28, 2018, which were reassessed between March 31 and July 8, 2019, resulting in a refund amount of ₹11,83,845. The appellant submitted a refund application on July 22, 2019, which was rejected by the refund sanctioning authority on December 3, 2019, citing that the application was made after the one-year limit from the filing of the bills of entry. The subsequent appeal to the Commissioner (Appeals) was dismissed due to a perceived delay in filing the appeal.
The CESTAT’s examination focused on the statutory provisions of Section 27 of the Customs Act, which specifies that the limitation period for refunds must be calculated from the date of reassessment, not from the initial filing of the bills of entry. The tribunal emphasized that the appellant’s refund application was timely, falling within the permissible period since it was filed after the reassessment. The CESTAT found both the sanctioning authority’s and the Commissioner’s interpretations of the limitation period to be incorrect. Consequently, the tribunal ordered the refund of ₹11,83,845 along with applicable interest, underscoring that the principles of unjust enrichment were not applicable in this instance as no evidence suggested the appellant had unjustly benefited from the duty paid. Thus, the tribunal’s decision reaffirms the significance of adhering to the correct starting point for calculating the limitation period in customs refunds.
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal was heard on 24.07.2024 and the same is taken up for orders today.
2. Fact that gives rise to the present dispute is that five bills of entry filed and assessed between 30.04.2018 and 28.05.2018 of the Appellant Importer were subjected to re-assessment at lower rate of duty consequent upon availment of benefit of Notification No. 50/2017-Customs prevailing during the period and the re-assessment was done between 31.03.2019 and 08.07.2019 that resulted in refund of Rs.11,83,845/-. Appellant submitted refund application on 22.07.2019 but the refund sanctioning authority rejected the same by his adjudication order dated 03.12.2019 on the ground that refund was sought after one year of the filing of bills of entry in respect of those five imports. Learned Commissioner (Appeals), without noting in his order about the date of filing of appeal, that appellant claims to have filed on 31.01.2020, dismissed the appeal on the ground that it was filed after sixty days of the assessment order. Appellant is before this forum challenging legality of the said order passed by the Commissioner (Appeals).
3. I have heard both the sides and perused the appeal paper book, relevant provisions of law contained in section 27 of the Customs Act that deals with period of limitation in case of the re-assessment. It reads:
Section 27(1B)
(a) In the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 25, the limitation of one year shall be computed from the date of issue of such order;
(b) Where the duty becomes refundable as a consequence of any judgment, decree order or direction of the appellate authority, Appellant Tribunal or any court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction.
(c) Where any duty is paid provisionally under section 18, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in case of re-assessment, from the date of such reassessment.
(Underlined to emphasise)
4. Going by the above referred statutory provision application for refund filed on 22.07.2019 for re-assessment of bills of entry done between 31-03-2019 to 08.07.2019, was well within the period of limitation for which appellant is entitled to get the refund as sough for and therefore, the order of refund sanctioning authority in computing the period from the date of filing of bill of entry and that of the Commissioner (Appeals) in computing the period of appeal from the date of passing of assessment orders were both irregular and unsustainable in law apart from the fact that without filing a refund application, section 18 sub-clause 4 commands for such refund/adjustment within three months from the date of reassessment subject to stipulation containing in sub clause 5 as to if the same is to be refunded to the fund or to the importer. In the instant case allegation of such unjust enrichment not being available on record, Appellant is entitled to get the refund itself alongwith interest. Hence the order:
The order
5. The Appeal is allowed and order passed by the Commissioner of Customs (Appeals),Mumbai-II, Raigad vide Order-in- Appeal No. 220(CRC)/2021 (JNCH)/Appeals dated 22.03.2021 is hereby set aside. Appellant is entitled to get the refund of Rs.11,83,845/- with applicable interest and the Respondent-Department is directed to pay the same within two months of receipt of this order.
(Order pronounced in the open court on 11.09.2024)
