Customs broker wins CVD refund after department wrongly recovered exempted amount under Notification 30/2004-CE

CESTAT Chandigarh allowed the appeal of a customs broker who sought refund of CVD recovered by the department. The broker had filed Bills of Entry for importers claiming exemption under Notification 30/2004-CE, but department later recovered CVD after one year claiming exemption was unavailable. Though the broker's protest letter dated 06.06.2014 did not specifically mention "Under Protest," CESTAT held the letter's contents showed protest intent. Following Supreme Court's decision in SRF Ltd. case confirming CVD exemption availability, the broker filed refund claim which was rejected as time-barred. CESTAT ruled the amount was deposited under protest on department's insistence, not voluntarily, making refund claim valid with interest.

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Issues Involved:

1. Legality of the rejection of the refund claim by the Commissioner (Appeals).
2. Applicability of the limitation period for refund claims.
3. Whether the duty paid was under protest.
4. Entitlement to interest on delayed refund.
5. Consistency in adjudication by the Appellate Authority.

Issue-wise Detailed Analysis:

1. Legality of the rejection of the refund claim by the Commissioner (Appeals):

The appeal is directed against the order dated 05.02.2019 by the Commissioner (Appeals), which upheld the Order-in-Original dated 13.10.2017, rejecting the appellant's refund claim. The appellant, a Custom Broker, had paid CVD under protest and sought a refund post the Supreme Court's decision in SRF Limited vs. CC, Chennai, which held that the benefit of CVD exemption is available to importers when the question of availing Cenvat Credit on inputs does not arise. The Commissioner (Appeals) rejected the refund due to the absence of "Under Protest" endorsement on Bills of Entry and TR-6 Challans.

2. Applicability of the limitation period for refund claims:

The appellant argued that the amount paid was not a duty but a deposit, thus not attracting any limitation period. The Delhi High Court in Telecare Network India Pvt Ltd vs. UOI supported this view, stating that amounts collected without authority of law are not subject to the limitation period. The Tribunal concurred, noting that the payment was made under duress and not voluntarily, and thus the limitation period did not apply.

3. Whether the duty paid was under protest:

The appellant submitted a letter dated 06.06.2014 to the Additional Commissioner of Customs, indicating that the duty was paid under protest. Although the letter and TR-6 Challans did not explicitly mention "Under Protest," the Tribunal found that the spirit of the letter conveyed protest. The Punjab & Haryana High Court in CCE, Chandigarh-I vs. Ind Swift Lands Ltd held that an act can be under protest even without the specific words "under protest," as long as the conduct indicates compulsion.

4. Entitlement to interest on delayed refund:

The appellant claimed entitlement to interest on the delayed refund under Section 27A of the Customs Act. The Tribunal agreed, stating that the appellant is entitled to a refund along with interest as per the rules.

5. Consistency in adjudication by the Appellate Authority:

The appellant highlighted that in a similar case, the Appellate Authority allowed the refund in the case of Avtar Singh & Co. The Tribunal noted the need for consistency in adjudication and found that the appellant should not be discriminated against when similar facts and circumstances existed.

Conclusion:

The Tribunal concluded that the amount paid by the appellant was not duty but a deposit, and thus not subject to the limitation period. The letter dated 06.06.2014 constituted a valid protest. The Tribunal set aside the impugned order, allowing the appeal and holding that the appellant is entitled to a refund of the amount deposited along with interest on the delayed refund as per rules. The judgments relied upon by the department were found not applicable to the present case.

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