2018 (4) TMI 853 - AT - Customs

Refund claims rejected for late filing under Custom Act; Tribunal upholds decision. State gov't failed to claim exemption timely.

The Tribunal upheld the rejection of refund claims due to being filed beyond the limitation period under Section 27 of the Custom Act, 1962. The ... Refund of customs duty - limitation for refund under Section 27 of the Customs Act, 1962 - payment of duty without protest / final payment principle - state government department - duty liability and due diligence in claiming exemptions - claim barred by limitationRefund of customs duty - limitation for refund under Section 27 of the Customs Act, 1962 - payment of duty without protest / final payment principle - state government department - duty liability and due diligence in claiming exemptions - claim barred by limitation - The refund claims filed by the appellant are barred by limitation and therefore liable to be rejected. - HELD THAT: - The Tribunal upheld the finding that the refund applications were filed beyond the one year period prescribed by sub section (1) of Section 27 of the Customs Act, 1962. The goods were assessed and duty was discharged by challans in May and June 2005, and no protest was registered at the time of payment; on the material before the authorities the payments were final. The appellant, being a state government department, was required to consider available exemptions before discharging duty and has not shown that duty payment was made under compulsion by Customs. The First Appellate Authority's reasoning (paras 10 and 11 of its order) treating the payments as final and holding the refund claims time barred was accepted as correct. Reliance placed on earlier decisions to treat limitation as inapplicable where duty was not payable was not found to be applicable on the facts, because there was no evidence of payment under protest or of compulsion by Customs. [Paras 10, 11]Impugned order upholding rejection of refund claims as barred by limitation is correct; appeal dismissed.Final Conclusion: The order of the First Appellate Authority rejecting the refund claims on the ground of limitation is affirmed and the appeal is dismissed. Issues:Rejection of refund claims on the ground of limitation.Analysis:The appeal was filed against the rejection of refund claims due to being filed beyond the limitation period. The appellant, a state government department, imported a rubber dam which was fully exempted by Notification. The goods were cleared without claiming the benefit of the Notification. The refund application was filed after being pointed out by CAG during record checking. The Adjudicating Authority rejected the refund claim as it was filed after one year from duty payment, citing Section 27 of the Custom Act, 1962. The 1st Appellate Authority also upheld the rejection.The appellant argued that the custom duty was not payable, relying on precedents like Monnet International Ltd. and Hind Agro Industries. They also cited the judgment of the Hon'ble High Court of Karnataka in the case of Hitachi Koki India Pvt. Ltd. to support their stance that the limitation period under Section 27 of the Custom Act would not apply in such circumstances. However, after considering the submissions and authorities cited, the Tribunal found no merit in the appeal.The Tribunal noted that the refund claims were indeed filed beyond the limitation period. Despite being a state government department, the appellant did not consider exemptions before paying the duty, and no protest was registered against the duty payment, indicating their acceptance of duty liability. The 1st Appellate Authority's findings were deemed correct, as the duty payments were made without protest before the limitation period lapsed.The Tribunal upheld the Impugned Order, stating that the factual matrix and Section 27 of the Custom Act, 1962 applied to the case. It was concluded that the rejection of the refund claims based on limitation was correct and legal, warranting no interference. Consequently, the Impugned Order was upheld, and the appeal was dismissed.