Customs refund claims paid under protest may escape the six-month bar and require merits-based adjudication.

Customs duty and interest paid under protest pursuant to a detention notice were treated as outside the six-month limitation in the second proviso to Section 27 of the Customs Act, 1962. The refund authority was required to examine whether the claim satisfied Section 27(2) and to decide whether the amount was refundable or creditable to the statutory fund. On that basis, rejection of the refund application as time-barred was unsustainable, and the matter was remitted for fresh adjudication on merits.

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Issues: Whether the refund application for customs duty and interest paid under protest could be rejected as time-barred, and whether the competent authority was required to decide the refund claim on merits under Section 27 of the Customs Act, 1962.

Analysis: The record showed that the duty and interest were paid under protest pursuant to a detention notice, and no affidavit-in-reply was filed to dispute that position. In such circumstances, the limitation bar of six months was not attracted under the second proviso to Section 27. The amended refund mechanism required the authority to examine whether the claim satisfied the conditions under Section 27(2) and to decide whether the amount was refundable or liable to be credited to the fund established under the Act.

Conclusion: The rejection of the refund claim as time-barred was unsustainable, and the matter had to be determined afresh on merits by the Assistant Commissioner of Customs.

Final Conclusion: The petitioners succeeded to the extent that the impugned rejection was set aside and the refund claim was remitted for fresh adjudication under the statutory refund scheme.

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