2024 (6) TMI 1190 - HC - Customs

Refund claim limitation period under Section 27(1B)(c) starts from actual communication of assessment finalization to assessee

The Gujarat HC dismissed an appeal regarding a refund claim rejection based on limitation grounds. The court held that the limitation period under section ... Refund claim rejected on the ground of being time barred - Relevant date for computation of period of limitation for filing refund claim - “date of service” of finalization of provisional assessment - section 27 (1B) (c) of the Customs Act, 1962 - HELD THAT:- Once the provisional assessment is done and the assessee is entitled to the refund claim, then he has to make application within a period of one year under section 27 read with section 27(1B) of the Act. The assessee made application on 19.08.2016 with a prayer for finalizing of custom duty by way of final assessment which means that till that point of time, the assessee was not aware about the final assessment - Merely because the Custom Department has uploaded the final assessment orders on portal is not sufficient compliance of intimation to the assesee as it is a condition sine quanon to file the refund claim within one year as per section 27 (1B)(c) of the Act from the date of finalization provided such order of assessment is communicated to the assessee. Therefore, the Tribunal has rightly taken into consideration the various documents intimating the respondent assessee about the finalization of provisional assessment communicated by the respondent. There are no infirmity in the impugned order of the Tribunal and no question of law much less any substantial question of law arises - appeal dismissed. Issues Involved:1. Determination of the relevant date for computation of the period of limitation for filing a refund claim under Section 27 of the Customs Act, 1962.2. Validity of the CESTAT's decision to allow the respondent's appeal against the rejection of their refund claim as time-barred.Issue-wise Detailed Analysis:1. Determination of the Relevant Date for Computation of the Period of Limitation for Filing a Refund Claim:The primary issue revolves around the interpretation of the 'relevant date' for computing the period of limitation for filing a refund claim under Section 27(1B)(c) of the Customs Act, 1962. The appellant-Revenue contended that the relevant date should be the date of adjustment of duty after the final assessment. However, the CESTAT held that the 'date of service' of finalization of provisional assessment is the relevant date for this purpose.The CESTAT relied on the precedent set by the Indian Oil Corporation case, which stated that the date of communication of the final assessment order is crucial for the computation of the limitation period. The Tribunal observed that prior to the amendment of Section 18 on 13-7-2006, refunds arising from the completion of provisional assessments did not undergo the process of Section 27. However, post-amendment, the bar of limitation and the principle of unjust enrichment were applicable.The Tribunal found that the date of service of the final assessment order is decisive for the purpose of claiming refunds, as it ensures that the assessee is aware of the final assessment, enabling them to file a refund claim within the prescribed time limit.2. Validity of the CESTAT's Decision to Allow the Respondent's Appeal:The second issue pertains to whether the CESTAT was correct in allowing the respondent's appeal against the rejection of their refund claim as time-barred. The respondent-assessee had filed 16 Bills of Entry for the import of Liquified Natural Gas (LNG), which were assessed provisionally. Upon final assessment, the respondent claimed a refund for the excess duty paid. The Adjudicating Authority rejected the refund claim as time-barred, stating that the refund application was filed beyond the one-year limitation period from the date of final assessment.The respondent-assessee argued that they were not aware of the final assessment until they received communication from the Customs Department. The Tribunal noted that the Custom Department's mere uploading of the final assessment orders on the portal did not constitute sufficient compliance with the requirement of intimation to the assessee. The Tribunal emphasized that the assessee must be formally communicated about the final assessment to trigger the limitation period.The Tribunal considered various documents and communications that indicated the respondent was informed of the final assessment at a later date, thus validating their refund claim as filed within the permissible period. The Tribunal's decision was based on the principle that the limitation period should commence from the date the assessee is officially informed about the final assessment.Conclusion:The High Court upheld the Tribunal's decision, affirming that the 'date of service' of the final assessment order is the relevant date for computing the limitation period for filing a refund claim. The Court found no infirmity in the Tribunal's order and dismissed the appeal, concluding that no substantial question of law arose in this case. The High Court's judgment reinforces the importance of formal communication of the final assessment to the assessee for the purpose of determining the limitation period for refund claims under the Customs Act, 1962.