Tribunal allows SAD refund appeal, rules Section 27(1B)(C) prevents time-barred rejection for provisional assessments

CESTAT Ahmedabad allowed the appeal concerning denial of SAD refund on limitation grounds. The Tribunal followed precedent from SHIRDI TRADERS case, holding that under Section 27(1B)(C), refund claims cannot be rejected as time-barred when bills of entry remain under provisional assessment at filing time. The Tribunal emphasized statutory provisions clearly define payment dates for provisional assessments, and Board Circular restrictions were properly ignored in similar cases. Despite Revenue's opposition, the Tribunal ruled limitation period must be calculated harmoniously with statutory provisions, making time-barred rejection impermissible for unfinalized assessments.

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The Appellate Tribunal (CESTAT Ahmedabad), presided by Hon'ble Mr. Somesh Arora, addressed an appeal concerning the denial of refund of Special Additional Duty (SAD) on the ground of limitation expiry at the time of claim filing. The appellant relied on the precedent set in SHIRDI TRADERS & Others vs. Commissioner of Customs, Jamnagar (Prev.) (Final Order No. A/11365-11375/2023), where similar facts existed, including unsettled assessment of bills of entry, yet the refund claims were allowed.The Tribunal cited para 4 of that decision, emphasizing that the statutory provision under Section 27(1B)(C) clearly defines the date of payment for provisional assessments, and the relevant notification contains "no clause providing otherwise." The Tribunal noted that the Board Circular was "correctly ignored" in SUZUKI MOTORCYCLE INDIA P. LTD vs. C.C. (Import & General), where it was held that a refund "cannot be rejected as time barred" under similar circumstances, and the matter was remanded for adjudication on admissibility.The Revenue's representative opposed but deferred to the Court's discretion. Following the binding precedent, the Tribunal allowed the appeal, holding that the refund claim should not be barred by limitation despite the provisional assessment status at the time of filing.In sum, the Tribunal reaffirmed that under Section 27(1B)(C), the limitation period for refund claims in provisional assessments must be reckoned harmoniously with statutory provisions, and time-barred rejection is impermissible where the assessment remains unfinalized. The appeal was accordingly allowed.

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