Excess Duty Payment cannot be Treated as Deposit: CESTAT upholds Time-Barred Refund Rejection [Read Order]

In a recent ruling, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal held that the excess duty payment could not be treated as a deposit and upheld the decision of the Commissioner ( Appeals ) in rejecting the time-barred refund claim

In this case, the appellant, IFGL Refractories Ltd had filed a refund claim with the Assistant Commissioner of Customs for Rs.5 lakhs on 10.08.2023. It was submitted that the assessee had made double payment of duty due to ‘ ICEGATE error ‘

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So here the assessee claimed that it had paid the duty twice. The original authority was of the opinion that the claim was not filed before the expiry of the one-year period from payment of Duty and interest and thus it was time-barred. The original authority excluded the period from 15.03.2020 to 28.02.2022 based on the Supreme Court’s order extending the limitation period due to COVID-19. Even with this exclusion, the refund application, due by 29.05.2022, was filed late and deemed time-barred under Section 27 of the Customs Act, 1962.

The Commissioner ( Appeals ) after relying on various judgments, held that the refund claim was hit by limitation as it had been filed after 15 months.

The appellant submitted that the payment made was not in the nature of duty and it was more in the nature of deposit and thus it was a case of double payment and that Section 27 of the Customs Act would not be applicable.

The CESTAT observed that refunds, except those arising from unconstitutional levies, must comply with statutory provisions, including a limitation period, and that in the present case, the double payment was due to miscommunication or ICEGATE issues, and not due to unconstitutional provisions or legal misinterpretation.

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The bench was of the view that the excess payment was in the nature of duty and would be required to be dealt with in accordance with the provisions under Section 27 of the Customs Act.

The CESTAT comprising A K Jyotishi ( Technical Member ) upheld the order of commissioner appeals and dismissed the appeal filed by the assessee. Thus, the CESTAT upheld the rejection of the time-barred refund claim for double customs duty payment.

To Read the full text of the Order CLICK HERE

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