1989 (6) TMI 201 - AT - Customs

Refund claim rejected as time-barred despite arithmetical error plea

The Tribunal upheld the rejection of the refund claim as time-barred under Section 27 of the Customs Act, despite considering the argument of an ... Refund - Limitation Issues:1. Rejection of refund application as time-barred under Section 27 of the Customs Act, 1962.2. Applicability of Section 27 in case of arithmetical mistake in the refund claim.3. Power of the Appellate Tribunal to rectify mistakes under Section 129B of the Customs Act.Analysis:1. The appellants imported component parts for machine tools and were advised to file a refund claim due to an excess recovery of duty. The claim was rejected for being filed after six months from the date of payment, as required by Section 27(1) of the Customs Act. The Collector of Customs upheld the rejection, leading to the present appeal challenging the time-barred decision.2. The appellants argued that the excess amount collected was due to an arithmetical mistake, not falling under Section 27. They cited provisions from the Income Tax Act regarding rectification of mistakes and previous cases emphasizing interpretation rules favoring the taxpayer. However, the Tribunal relied on precedent where a similar issue was held time-barred under Section 27, citing Supreme Court judgments supporting their decision.3. The Tribunal considered the power of rectification under Section 129B of the Customs Act. While the appellants sought rectification based on an arithmetical mistake, the Tribunal clarified that Section 27 and 129B serve different purposes, and the latter does not override the former. The Tribunal highlighted the absence of provisions allowing rectification beyond four years and suggested legislative amendments to enable corrections for arithmetical errors to prevent injustice to parties.In conclusion, the Tribunal rejected the appeal, upholding the time-barred status of the refund claim under Section 27. Despite acknowledging the arithmetical mistake argument, the Tribunal emphasized the limitations of rectification powers under Section 129B and recommended legislative amendments to address such issues effectively.