Customs refund limitation turns on departmental disclosure of excess duty, requiring merits review of the refund claim.

Where excess customs duty was first disclosed to the assessee by the department itself, the date of such knowledge was treated as relevant for computing limitation under Section 27 of the Customs Act, 1962. The HC held that the refund claim could not be rejected solely as time-barred in these circumstances and that the authority had to examine the claim on merits, including the disputed refund quantum, rather than defeat a legitimate claim by a strict limitation objection.

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Issues: Whether the refund application under Section 27 of the Customs Act, 1962 was barred by limitation, and whether the claim should be examined on merits.

Analysis: The duty had been paid pursuant to the assessment order, but the assessee was informed only later by the department itself that the goods had been wrongly assessed and that excess duty had been collected. The application for refund was filed soon after such intimation. On these facts, the date of knowledge was treated as material for computing limitation, and the department was not permitted to defeat a legitimate refund claim by insisting on limitation where the excess levy had first been disclosed by its own communication. The matter also involved a dispute on the quantum of refund, which required adjudication on merits.

Conclusion: The refund claim was not held to be barred by limitation, and the authority was directed to consider it on merits.

Ratio Decidendi: Where excess customs duty is first disclosed by the department itself, the date of such knowledge is a relevant factor in deciding limitation for refund, and the claim cannot be rejected solely on the basis of Section 27 of the Customs Act, 1962 without examining the merits.

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