In a major relief to FCI OEN Connectors, the Banglore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that limitation not applicable to refund of customs duty paid in excess.
The appellant has challenged the Order-in-Appeal passed by the Commissioner (Appeals), Kochi, whereby the Commissioner (Appeals) has upheld the rejection of refund claim under Section 11B of the Central Excise Act. It is the case of the appellant that they have filed a refund claim of Rs.14,88,888/- being the service tax paid on ocean freight for the period April 2017 to June 2017 but High Court of Gujarat in the case of SAL Steel Ltd. Vs UOI has clearly held that the levy in question was ulta vires Section 64, Section 66B and Section 65B(52) of the Finance Act, 1994 which decision was followed by the Gujarat High Court again in the case of Polycab India Limited Vs UOI wherein, the High Court had held that the levy of service tax on ocean freight is unconstitutional.
Mr. Neethu James, Advocate for the appellant and Mrs. C.V.Savitha, Authorized Representative for the Respondent, considered the rival contentions and have also gone through the various decisions relied upon during the course of arguments. The tribunal clarified that a case where the service tax has been held to be unconstitutional hence, the tax which is paid would amount to the one paid under mistake of law.
The coram of Judicial Member, P. Dinesha held that when the customs duty is paid in excess, the department is liable to refund the same and the limitation provided under Section 27 of the said Act of 1962 will not be applicable. Therefore, the Tribunal has erred in law and fact, solely relying on Section 27 of the said Act of 1962 while dismissing the application of the appellant-Company.
“I do not find any justification in the reasons adopted for rejection of the refund claim by the lower authorities and hence, the impugned order is not sustainable in the eye of law. Therefore, the impugned order is set aside and the appeal is allowed with consequential benefits, if any, as per law,” the court said.
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