Refund claims and duty leviability must be examined together before limitation can defeat recovery

A refund claim for countervailing duty could not be finally rejected on limitation alone where the authorities had not first determined whether the limitation provision under Section 27(1) of the Customs Act applied to the claim or whether the duty was leviable on the facts. The underlying dispute also required consideration of the tariff framework in force during the relevant period. Because the core objection to levy and the applicability of limitation had not been examined, the refund rejection was set aside and the matter was remitted for fresh decision in accordance with law.

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Issues: Whether the refund claim for countervailing duty could be rejected as time-barred under Section 27(1) of the Customs Act, 1962, and whether the authorities were required to decide the underlying question of leviability of the duty.

Analysis: The refund was declined only on limitation, without any finding on whether the countervailing duty was leviable at all in the facts of the case. The legal regime applicable at the relevant time was also in issue, as the claim related to a period when the levy was said to arise under the then governing tariff framework. Since the authorities below had not examined the core objection to the levy, and had not addressed whether the limitation provision invoked by the refund authority applied to the claim, the matter required reconsideration on the merits and in accordance with law.

Conclusion: The rejection of the refund claim could not stand on the existing record, and the matter was remitted to the Assistant Collector of Customs for a fresh decision.

Ratio Decidendi: A refund claim cannot be finally rejected on limitation alone when the authority has not determined the applicability of the limitation provision or adjudicated the basic question of duty leviability.

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