TaxTMI 
TaxTMI 
2023 (9) TMI 199
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.... being a company incorporated under the Companies Act, 1956, engaged in the business of designing, manufacturing and distributing, importing various raw materials to manufacture and distribute exhaust after treatment systems. While importing the raw material, vide three bills of entry no. 2297141, 2297232 and 2297331 respectively, Petitioner paid IGST of Rs. 38,90,832/- on 5 July 2017. Thereafter, Petitioner paid an amount of Rs. 42,08,551/- on 11 July 2017 in respect of the three bills of entry. 3. It is submitted on behalf of the Petitioner that, in 2019, while conducting an internal audit, the Chartered Accountant of the Petitioner viz. U.V. Bodas & Co. noticed the mistake that Petitioner had paid an excess customs duty of Rs. 38,90,832/- by making payment of Rs. 42,08,551/- on 11 July 2017 instead of a differential of Rs. 3,17,719/-. 4. Thereafter, Petitioner engaged with the Customs Department. By an email dated 10 July 2019 from the Icegate Service Manager addressed to Petitioner regarding pending confirmation of the payment made by the Petitioner, Petitioner was informed that Petitioner's issue had been resolved by rejection of the main challan due to less duty payment and....
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....er Section 27 of the Customs Act, 1962: 27. Claim for refund of duty;- 3[1] Any person claiming refund of any duty or interest,- (a) paid by him; or (b) borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, Before the expiry of one year, from the date of payment of such duty or interest the refund claim should be filed within one year after payment of duty. In the present case the refund claim filed by you is Time Barred and is not sustainable as per Section 27 of the Customs Act, 1962. Therefore, you are requested to collect your documents. (Vinod Nautiyal) Asstt. Commissioner of Customs Refund Section,ACC, Mumbai." 8. Aggrieved by the aforesaid order of rejection of the claim for refund of excess duty paid, Petitioner has filed this Petition on 14 September 2020 seeking to quash and set aside the said order with further direction for refund of the amount of Rs. 38,90,832/- to the Petitioner. 9. We have heard Mr. Rahul Totala with Mr. Ashwin Poojari, learned Counsel for the Petitioner and Mr. Pradeep Jetly, learned Senior Counsel and Mr. ....
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....ar that the Writ Petition has been filed three years after the date of the excess payment on 11 July 2017, however, in view of the suo- moto decision of the Supreme Court with regard to the extension of limitation period due to Covid, the intervening period from 15 March 2020 to 28 February 2022 stands excluded and therefore, the writ petition has been filed within a period of three years from the date of excess payment and within a few months from the date of receipt of communication rejecting the request of Petitioner. Therefore, there is no laches in filing the Writ Petition. 11. Learned Counsel draws the attention of this Court to the decisions of the Hon'ble Apex Court in the case of Vedanta Limited vs. Commissioner of Customs (Port) and Another (2017) 12 SCC 744 and Salonah Tea Co. Limited and Others vs. Superintendent of Taxes, Nowgong and Others (1988) 1 SCC 401 in support of his contentions. 12. The Respondents have opposed the Petition and filed reply dated 6 January 2021. Mr. Pradeep Jetly, learned Senior Counsel for the Respondents would firstly submit that the refund application as filed by Petitioner was not maintainable. Learned Senior Counsel would submit that Pe....
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.... for further period of only thirty days. However, the Petitioner has failed to file the appeal within the maximum period of ninety days, which expired on 16 February 2020, considering that the impugned order was dated 8 November 2019. Learned Senior Counsel would submit that even if the date of receipt of the impugned order i.e. 8 November 2019 was considered, even then the appeal is time barred. He would submit that the said period of ninety days has expired much before the date of 15 March 2020 and therefore, the benefit of the suo moto order of the Hon'ble Apex Court extending or excluding the time period between 15 March 2020 and 28 February 2022 on account of the Covid- 19 pandemic would not be available to the Petitioner. Learned Senior Counsel, therefore, submits that the order has attained the finality and cannot be re-opened in writ jurisdiction and therefore Petition is liable to be rejected on this ground alone. 15. Learned Senior Counsel draws the attention of this Court to the decisions of the Apex Court in the case of Assistant Commissioner (CT) LTU. Kakinada and others Vs. Glaxo Smithkline Consumer Healthcare Limited (2020) 19 SCC 681., and Collector of Central ....
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....988) 33 ELT 648 9. Collector of Central Excise, Chandigarh Vs. M/s Daoba Co- Operative Sugar Mills Ltd., Jalandhar. (supra). 10. Assistant Commissioner (CT) LTU, Kakinada and Ors. Vs. Glaxo Smith Kline Consumer Health care Limited. (supra). 11. Mafatlal Industries Ltd. and Anr. Vs. Union of India and Ors. (1997) 5 SCC 536. 19. After taking us through the aforesaid decisions, Mr. Dada, would submit that if monies including duty or tax or cess are paid under a bonafide mistake of law or fact then the limitation under the provisions of Section 11-B of the Excise Act or under Section 27 of the Customs Act would not apply and the claim for return of the same is to be made within the time prescribed under the general law of limitation from the date of discovery or knowledge of the said bonafide mistake. 20. A perusal of the decisions in the cases of M/s. Hindustan Cocoa Products Vs. The Union of India and Others (supra), M/s Parijat Construction Vs. Commissioner of Central Excise, Nashik (supra), Commissioner of Central Excise (Appeals) Vs. KVR Constructions 2012(26) STR 195 (KAR) suggest that earlier it was only payments made under a mistake of law would not fall within the p....
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....e added, which was already paid on 11 April 2016 for another consignment claiming that this additional amount paid was not a duty nor a claim of any benefits under any other head under the customs law but merely a mistake committed by Petitioner in paying duty for some goods on two occasions and therefore, the same could not be treated as duty as referred to in Section 27 of the Customs Act and therefore the limitation thereunder would not be applicable. After hearing the parties, the Gujarat High Court recorded that the aforesaid facts were undisputed, however, because of the bonafide mistake committed on the part of Petitioner he added the amount of Rs. 17,25,172/-, which was already paid towards customs duty just prior to one day before the second payment and that it was also not in dispute that the excess amount was paid by the Petitioner and that the authority had rejected the claim only on the ground of limitation. 21.3 After examining the provisions of Section 27 and 27A of the Customs Act and relying upon the other similar decisions of the Gujarat High Court, it was held that the Petitioner had made an application within reasonable time and on that ground also he would be ....
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....or the amount paid in twice against the same import vide three bill of entries nos. 2297141, 2297232 and 2297331 respectively. The Respondent no. 3 has rejected the refund application of the Petitioner on the ground that, the refund application filed by the Petitioner is time barred in pursuant to Section 27 of the Customs Act, 1962. 4. The Petitioner is constrained to file this Writ Petition challenging the impugned order issued by Respondent no. 3, for rejecting the lawful refund claim of the Petitioner to which he is legally entitled. Also, the law does not prescribe any legal remedy to the Petitioner to challenge the veracity of the letter rejecting the refund claim before any appellate authority. Therefore, the Petitioner has no other option but to file the instant Writ Petition. 5.1 The Petitioner was incorporated in the year 1994 and one of its division Cummins Emissions Solutions is engaged in the business of global designing, integrator, manufacturer and distributor of exhaust after treatment systems and components for 'on and off-highway' medium duty, heavy duty and high horsepower engine markets. 5.2 Petitioner has been importing various materials to manufacture....
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...., by inaction and arbitrariness of the Respondent no. 3, the petitioner begs to prefer the present Writ Petition under Article 226 of the Constitution of India, inter alia, on the following amongst other grounds : GROUNDS b. The Respondent failed to acknowledge the fact that, the amount paid in excess by the Petitioner against the import made cannot take the nature of duty as prescribed under Section 27 of the Customs Act, 1962 and hence the applicability of Section 27 of the Customs Act, 1962 does not arise. e. According to Section 27 sub-section 3(1) of the Customs Act, 1962, 'Any person claiming refund of any duty or interest' : Paid by him or borne by him, may make an application in such form and such manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year from the date of payment of such duty or interest the refund claim should be filed within one year after payment of duty. k. The impugned order is violative of Article 265 of the Constitution of India which provides that "no tax shall be levied or collected except by authority of law". Any letter refusing the refund of rig....
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....aying in paragraph 6 of the Petition, that the Petitioner is seeking refund of duty being paid twice by mistake, and that amount paid in excess by the Petitioner cannot take the nature of duty as prescribed in Section 27 of the Customs Act and that the impugned order is violative of Article 265 of the Constitution of India, there is no pleading or any material to show or establish or demonstrate that the said mistake was bonafide. As elucidated above, if the act of having paid excess duty has been a mistake, then the same should have been a bonafide mistake. 29. Petitioner, as noted above, is a corporate involved in various kinds of businesses, having eight divisions expected to be guided and advised by a professional set of Managers as well as Chartered Accountants. To demonstrate bonafides, a corporate of the stature of the Petitioner ought to demonstrate that due care and diligence were exercised. Admittedly, although the payment of excess duty was made in July, 2017, it is only in 2019 that while conducting an internal audit, the mistake that Petitioner had paid excess customs duty was noticed and it is only thereafter that pursuant to a certificate dated 2.7.2019 by Petitione....
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....nd therefore the said refund claimed does not amount to unjust enrichment. Nowhere does the Certificate state as to the circumstances under which such a mistake had occurred, what efforts were taken to exercise due care and diligence so that the said mistake could be said to be a bona fide mistake; it has not even been considered necessary to mention or explain the same in the said certificate. There is no whisper of the time or the circumstances under which the said mistake was discovered by the Petitioners. It appears that the said certificate had been issued at the behest of the Petitioner itself and the certificate nowhere suggests that the Chartered Accountants had discovered the mistake at a point in time and brought it to the notice of the Petitioner. 32. Thereafter, the following communication dated 10.7.2019 was received from the Respondent Customs : "Pending confirmation | Incident IM00817480 is pending for the confirmation Dear Sir/Madam, In reference to your an incident number IM00817480, your issue has been resolved. Solution is : Mentioned Challan is rejected with 03 (less duty payment error code. According to the 03 case user can follow the rules, user can r....
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....duty and also made an application under Section 27 of the Customs Act for refund of duty. Therefore, now to say that the amount paid in excess by the Petitioner against import made cannot take the nature of duty as prescribed under Section 27 of the Customs Act or that the impugned order was therefore violative of Article 265 of the Constitution of India would in our view not be tenable in the facts of this case. Even an admission by the Respondents that excess duty has been paid would in our view not make any difference. 36.1 The Petitioner has relied upon the decision of the Hon'ble Supreme Court in the case of Vedanta Limited vs. Commissioner of Customs (Port) and Anr. (supra). The Petitioner therein had filed application for refund of the amount of the customs duty paid in excess as the goods for export were short shipped. The Commissioner of Customs had rejected the refund application as being made beyond the prescribed time. The Hon'ble Supreme Court held that the provisions of Section 27 of the Customs Act would not apply to the case on its plain language and accordingly directed refund of the excess amount of customs duty to be paid within a specified time. 36.2 The decis....
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.... thereunder have no application, the decision will be guided by the general law and the date of limitation would be the starting point when the mistake or the error comes to light, but as held in the said decision, in making claims for refund before the departmental authority, an assessee is bound within the four corners of the statute and the Rules framed thereunder must be adhered to; the authorities functioning under the Customs Act are bound by the provisions of the Customs Act and if the proceedings are taken under the Customs Act by the department, the provisions of limitation prescribed in the Customs Act will prevail. 39. Mr. Dada has also taken us to the Nine Judge Bench decision in the case of Mafatlal Industries Limited and Another vs. Union of India (supra). In the said decision reference was made in paragraph 73 to the decision of the Supreme Court of the United States of America in the case of United States Vs. Jefferson Electric Manufacturing Company 291 US 386 (1933) where the United State's Supreme Court has considered that if the tax is illegally levied under the system then in force, the tax payer had acquired a right to have it refunded without showing whether ....
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....ne year from the date of payment of such duty or interest. In the present case, the petitioner has filed refund application on 30.07.2019, after more than two years of payment of duty and therefore, even if the date of 11.7.2017 is considered as the payment of duty, the one year would end on 10 July 2018 which is clearly beyond the period of one year as contemplated by the Customs Act and is barred by limitation. Paragraph 108(i) of the decision of the Hon'ble Supreme Court in the case of Mafatlal Industries Limited and Another vs. Union of India and Others (supra) lays down that where a refund of tax or duty is claimed on the ground that it has been collected by misinterpreting or misapplying the provisions of law, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactments, Section 11B under the Excise Act or under Section 27 under the Customs Act before the Authorities specified thereunder and within the period of limitation prescribed therein, and any Writ Petition in that regard has to be considered and disposed of in accordance with the statutory provisions as the power under Article 226 has to be exercised to effe....
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.... or otherwise. 44.3 Addressing the contention that no appeal lies against the order of self-assessment, the Hon'ble Supreme Court quoting Section 128 of Customs Act, held that as the order of self-assessment nonetheless is an assessment order passed under the said Act obviously it would be appealable by any person aggrieved thereby. The Hon'ble Supreme Court concluded that the provision of Section 27 cannot be invoked in the absence of amendment or modification having being made in bill of entry on the basis of which self-assessment has been made. The order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution proceedings for refunding the amount. It is not assessment or re-assessment. The Hon'ble Supreme Court held that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance to law by taking recourse to appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and re-assess the duty for making refund. Finally it was held that in case any per....
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....en if the date of receipt of the impugned order i.e. 18 November 2019 was to be considered, even then the Appeal would be time barred. 46. In Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Consumer Health Care Limited (supra), the Hon'ble Supreme Court has categorically observed that if a writ petitioner chooses to approach the High Court after expiry of maximum limitation period in the statute, the High Court cannot disregard the statutory period for redressal of the grievance and entertain the writ petition of such a party as a matter of course. The following paragraphs of the said decision are usefully quoted as under : "In the subsequent decision in Mafatlal Industries Ltd. v/s. Union of India, this Court went on to observe that an Act cannot bar abd curtail remedy under Article 226 or 32 of the Constitution. The Court, however, added a word of caution and expounded that the Constitutional Court would certainly take note of the legislative intent manifests in provisions on the Act and would exercise its jurisdiction consistent with the provisions of the Act and would exercise its jurisdiction consistent with the provisions of the enactment. To....