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of <h1>Revenue must refund pre-deposits paid under protest when penalties set aside by appellate authorities</h1> <h3>M/s Jyoti Udyog Ltd. Versus Principal Commissioner of Customs, Noida And M/s East India Udyog Ltd. Versus Principal Commissioner of Customs, Noida</h3> M/s Jyoti Udyog Ltd. Versus Principal Commissioner of Customs, Noida And M/s East India Udyog Ltd. Versus Principal Commissioner of Customs, Noida - TMI Issues Involved1. Applicability of the Limitation Period u/s 27 of the Customs Act, 1962 for Refund Claims.2. Refund of Penalty and Fine Paid Under Protest.Summary of Judgment1. Applicability of the Limitation Period u/s 27 of the Customs Act, 1962 for Refund ClaimsThe learned Commissioner (Appeals) held that the limitation period of one year u/s 27(1B)(b) of the Customs Act, 1962 applies to the refund claims, commencing from the date of the Tribunal's Final Order, i.e., 24.08.2018. The Commissioner referenced Supreme Court decisions, including Porcelain Electrical Mfg. Co. (1998), UOI vs. Kirloskar Pneumatic Co. (1996), and Miles India Ltd., which established that refund claims filed before Departmental Authorities are governed by statutory time limits and not general laws of limitation. The appeals were dismissed as the refund claims were filed beyond the prescribed period.2. Refund of Penalty and Fine Paid Under ProtestThe appellants argued that the terms 'duty' or 'interest' in Section 27 are not equivalent to 'penalty' and 'fine,' and thus the limitation period should not apply to their refund claims. They cited cases like Rajendra Mechanical Industries Ltd. (2005), Abdulla Gani (2013), and Cooper Pharma (2017) to support their contention. The Tribunal noted that the amounts were paid under protest for the release of confiscated goods and that the Tribunal's order allowed for consequential relief. The Tribunal held that the refund claims should be processed under Section 27 but should not be barred by the limitation period as the amounts were paid under protest.ConclusionThe Tribunal concluded that the amounts paid under protest are not subject to the limitation period u/s 27 of the Customs Act, 1962. Therefore, the impugned order was set aside, and both appeals were allowed.Final OrderBoth appeals are allowed.
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