2024 (6) TMI 350 - AT - Customs

Refund of pre-deposits - amount paid under protest - rejection on the ground of being filed beyond the prescribed period of limitation as per Section 27 of CA - section 11B of CEA - HELD THAT - When fines and penalties are being set aside Revenue is duty bound to refund the said amounts as all for implementation of the order of the Appellate Authority. Such implementation of the order Appellate Authority could not have been fully closed by relying upon the provisions of Section 27 as per the Customs Act Section 27 of the Customs Act define the relevant date in case where refund of duty becomes due in the light of the orders of the Appellate Authorities Courts or Tribunal. From the perusal of the provisions of Section 11B it is noted that period of limitation of one year does not apply when the amount claimed as refund have been paid under protest. Section only recognizes the fact of payment of amounts under protest. It does not recognize the vacation or such a protest once it is established that the amount claimed as refund were paid under protest. There are no reason why such a condition can be imported within the statute which has been not provided. These amounts were paid under protest. The period of limitation shall not apply in the present case and refunds claim have to be adjudicated accordingly treating that these amounts of redemption fine and penalties were paid under protest as per the direction of the department for effecting the clearance of the goods though the order imposing the fine and penalty was challenged in appeal. Thus though it is held that the refund claim has to be processed under the provisions of Section 27 of the Customs Act 1962 as this is a case of consequential refund of penalty and redemption fine the same cannot be held to be barred by the limitation as provided in the said section. There are no merits in the impugned order - appeal allowed.

Summary

Issues Involved
1. Applicability of the Limitation Period u/s 27 of the Customs Act, 1962 for Refund Claims.
2. Refund of Penalty and Fine Paid Under Protest.

Summary of Judgment

1. Applicability of the Limitation Period u/s 27 of the Customs Act, 1962 for Refund Claims
The learned Commissioner (Appeals) held that the limitation period of one year u/s 27(1B)(b) of the Customs Act, 1962 applies to the refund claims, commencing from the date of the Tribunal's Final Order, i.e., 24.08.2018. The Commissioner referenced Supreme Court decisions, including Porcelain Electrical Mfg. Co. (1998), UOI vs. Kirloskar Pneumatic Co. (1996), and Miles India Ltd., which established that refund claims filed before Departmental Authorities are governed by statutory time limits and not general laws of limitation. The appeals were dismissed as the refund claims were filed beyond the prescribed period.

2. Refund of Penalty and Fine Paid Under Protest
The appellants argued that the terms "duty" or "interest" in Section 27 are not equivalent to "penalty" and "fine," and thus the limitation period should not apply to their refund claims. They cited cases like Rajendra Mechanical Industries Ltd. (2005), Abdulla Gani (2013), and Cooper Pharma (2017) to support their contention. The Tribunal noted that the amounts were paid under protest for the release of confiscated goods and that the Tribunal's order allowed for consequential relief. The Tribunal held that the refund claims should be processed under Section 27 but should not be barred by the limitation period as the amounts were paid under protest.

Conclusion
The Tribunal concluded that the amounts paid under protest are not subject to the limitation period u/s 27 of the Customs Act, 1962. Therefore, the impugned order was set aside, and both appeals were allowed.

Final Order
Both appeals are allowed.