Limitation Period for Refund Starts from Re-Assessment Date, not Bill of Entry Filing: CESTAT allows Refund u/s 27(1B) of Customs Act [Read Order]

The Mumbai Bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) allowed the refund claim, clarifying that under Section 27(1B) of the Customs Act, the limitation period for filing a refund application starts from the date of re-assessment not the original bill of entry filing date.

Seal for Life India Pvt. Ltd. (Appellant) imported goods and filed five bills of entry between 30.04.2018 and 28.05.2018, with the benefit of Notification No. 50/2017-Customs. These entries were re-assessed at a lower duty rate between 31.03.2019 and 08.07.2019 resulting in a refund of Rs. 11,83,845.

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The appellant applied for the refund on 22.07.2019 but the refund sanctioning authority rejected the application on 03.12.2019, citing that the refund was sought after one year from the date of filing the bills of entry.

On appeal, the Commissioner (Appeals) dismissed the appellant’s case, stating that the appeal was filed after the permitted 60 days following the assessment order.

Aggrieved by the Commissioner (Appeals) decision, the appellant appealed before the Mumbai Bench of CESTAT arguing that their refund application was filed within the legal period allowed, based on the reassessment dates and not from the original date of filing the bills of entry.

The appellant’s counsel contended that Section 27(1B) of the Customs Act allows refund applications to be filed within one year of the reassessment.

A single bench led by Suvendu Kumar Pati (Judicial Member) observed that under Section 27(1B) of the Customs Act in cases of re-assessment, the limitation period for filing a refund application starts from the date of re-assessment, not from the original bill of entry filing.

The tribunal found that both the refund sanctioning authority and the Commissioner (Appeals) incorrectly computed the limitation period, which led to an improper rejection of the refund claim.

The tribunal noted that there was no allegation of unjust enrichment, implying that the refund should go directly to the appellant.

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Therefore, the tribunal set aside the order of the Commissioner (Appeals). The tribunal directed the Customs Department to process and pay the refund within two months of the order. The appellant’s appeal was allowed.

To Read the full text of the Order CLICK HERE

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