The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench directed re adjudication and set aside rejection on ground of time-bar and premature refund claim.
The appellant M/s Sai Exports imported consignment of 100% Knitted Polyester Fabrics vide various Bills of Entry. They declared a price between USD 2.26 per kg and USD 4.0 per kg. After examination, the department enhanced the price between USD 2.85 per kg and USD 4.94 per kg. The declared value was thus rejected by the department. The appellant paid the duty under protest and cleared the goods.
The appellant firstly filed an appeal before the CESTAT and then before Madras High Court to issue direction to allow refund and the same was allowed in favour of the appellant. Later a refund claim was filed before the Commissioner of Customs. The refund claim before the Commissioner was rejected on the ground that it was time barred and premature. The issue to be decided is whether the rejection of refund claim on the grounds of (1) time-bar (2) premature. The Tribunal considered each of the issues in detail.
The question is whether Sub-section (1B) of Section 27 of the Customs Act, 1962 which says that the limitation of one year has to be computed from the date of judgment, decree or order of court would come into application even if the duty is paid under protest. In the case on hand, although refund claim is made out of a consequence of judgement, decree or order, the appellant having paid duty under protest, the limitation of one year envisaged in Section 27 of the Customs Act, 1962 will not apply.
The second ground on which the refund claim is rejected is that the claim is premature. It is the case of the Department that the claim is made without re-assessment / final assessment of the Bills of Entry. The view taken by the department that the refund claim is time-barred as well as premature appears to be self-contradictory.Even after accepting the final order of Tribunal, they have not passed an order of final reassessment. The inaction on the side of the department cannot be a ground to reject the refund claim as premature.
A Coram consisting of CS SulekhaBeevi, Judicial Member held that “I hold that rejection of refund claim on the ground of time-bar and premature is set aside. The department is directed to complete the re-assessment and then process the refund claim.”
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