2005 (12) TMI 502 - AT - Customs

Appeal allowed, refund ordered for Bank Guarantee amount with interest.

The appeal was allowed, and the refund of the amount appropriated towards the Bank Guarantee was ordered to be refunded to the appellant with interest ... Refund - Limitation - Bank Guarantee Issues:Claim for refund rejected as time-barred under Section 27(i)(b) of the Customs Act, 1962.Analysis:The appeal arose from the rejection of a refund claim as time-barred under Section 27(i)(b) of the Customs Act, 1962. The appellant had furnished a Bank Guarantee against an advance license, which was enforced on a specific date. The claim for refund was filed after a considerable period. Both authorities held the refund as not maintainable due to being barred by time. The appellant contended that the Bank Guarantee was only a security and not required to be appropriated, thus Section 27 was inapplicable. Citing various judgments, the appellant argued for the refund.The learned SDR opposed the prayer, stating that the Bank Guarantee was to be encashed towards duty, invoking Section 27 of the Customs Act. Referring to a Tribunal judgment, the SDR argued against the appellant's position.Upon consideration, the judge noted that the judgments cited by the appellant applied to the present case. Various cases were discussed, emphasizing that Bank Guarantees were considered as security and not payment towards duty. The judge highlighted that the Bank Guarantee in question was to be refunded without the time bar, following the precedent set by several judgments. The judge differentiated the present case from a previous Tribunal judgment, concluding that the refund claim should be allowed with interest within a specified timeframe.In conclusion, the appeal was allowed, and the refund of the amount appropriated towards the Bank Guarantee was ordered to be refunded to the appellant with interest within three months from the date of the order.