Duty paid under court order treated as protest payment, keeping customs refund claims within limitation

Customs duty paid pursuant to a High Court interim order permitting release of imported goods on payment under protest was treated as duty paid under protest for refund purposes. Because the clearances under all 28 Bills of Entry were made subject to final orders in pending proceedings, the duty could not be regarded as finally assessed and the one-year limitation under section 27 of the Customs Act, 1962 did not bar the refund claims. The settled principle applied was that payment made under a court order during pending litigation is payment under protest, even without a separate protest in the prescribed form.

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Issues: Whether customs duty paid pursuant to the High Court's interim order directing release of goods on payment under protest was to be treated as duty paid under protest, with the result that the one-year limitation under section 27 of the Customs Act, 1962 would not apply to the refund claims.

Analysis: The imported goods were cleared only after the High Court permitted release on payment of duty under protest and subject to final orders in the writ petition. The records also showed that the adjudicating authority in the de novo proceedings treated the clearances under all 28 Bills of Entry as being under protest and accepted reassessment upon production of Essentiality Certificates. In that situation, the duty payment could not be regarded as finally assessed for the purpose of refund limitation. The Court further relied on the settled principle that duty paid under a court order pending proceedings is payment under protest and does not require a separate protest under the prescribed procedure.

Conclusion: The duty paid on all 28 Bills of Entry was held to be payment under protest, and the refund claims were held not barred by limitation under section 27 of the Customs Act, 1962. The appeal was therefore allowed with consequential relief.

Ratio Decidendi: Duty paid pursuant to a court order allowing clearance of goods subject to final orders in pending proceedings is payment under protest, so the statutory refund limitation does not run against such claims.

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