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Issues: (i) Whether a refund claim in respect of duty paid under protest was barred by limitation under section 27 of the Customs Act, 1962. (ii) Whether interest was payable on the refunded amount.
Issue (i): Whether a refund claim in respect of duty paid under protest was barred by limitation under section 27 of the Customs Act, 1962.
Analysis: The duty had been paid under protest for all the bills of entry, and the protest was never shown to have been vacated by any adverse speaking order. In such circumstances, the payment could not be treated as voluntary, and the refund proceedings were not hit by the ordinary limitation applicable to refund claims. The Court accepted the view that the claim was maintainable notwithstanding the passage of time.
Conclusion: The issue was decided in favour of the assessee and against the revenue.
Issue (ii): Whether interest was payable on the refunded amount.
Analysis: The refund was not being claimed with interest from the initial date of payment, but only after the statutory period following the grant of refund. The revenue's objection on interest was therefore not accepted, and the entitlement to interest on delayed refund was upheld.
Conclusion: The issue was decided in favour of the assessee and against the revenue.
Final Conclusion: The appeal by the revenue failed, the refund order was sustained, and the assessee was held entitled to refund with interest.
Ratio Decidendi: Where duty is paid under protest and the protest is not vacated by a speaking order, the refund claim is not barred by limitation under section 27 of the Customs Act, 1962, and delayed refund may carry interest in accordance with law.
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