TaxTMI 
TaxTMI 
2025 (11) TMI 391
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....aside the Order-in-Original dated 26.11.2024 passed by respondent No. 2- Assistant Commissioner (Refund), Central Excise, Customs House, Kandla, rejecting the claim of the petitioner for refund of the double payment of duty amounting to Rs. 78,55,766/- deposited through Challan TR-6. 5. Brief facts of the case are that the petitioner, who is engaged in the business of manufacture of goods like Alkyd resin, Acrylic resin, Urea resin, Polyester resin, Epoxy resin, Polyamide resin and other resin etc., since last more than Twenty years, imported various goods at Kandla Port. Such imported goods were allowed to be cleared for home consumption by the Customs Office by finally assessing 11 Bills of Entry filed by the petitioner. The petitioner was also in possession of the valid Advance Authorization. Since the goods were covered under 11 Bills of Entry and were imported against valid Advance Authorization, the Custom Officer assessed import duty including the integrated tax as 'Nil' thereby allowing the exemption from payment of duties on the imports made against valid Advance Authorization in view of the Notification No. 18/2015-Cus and as amended by Notification No. 79/2017-Cus dat....
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.... 11 Bills of Entry re-assessed and paid the differential amount of IGST along with interest by electronic challan generated through Customs EDI System on 29.03.2024 amounting to Rs. 78,55,766.28. According to the petitioner, therefore, double of payment of IGST amount to the tune of Rs.78,55,766.28 was made by the petitioner; one by the Demand Draft dated 07.06.2023 through Challan and, another by electronic challan generated through Customs EDI System on 29.03.2024. 5.6 The petitioner therefore, by letters dated 06.07.2024 and 12.7.2024, raised the refund claim along with relevant documents for refund of the manual Challan filed on 07.06.2023 amounting to Rs. 78,55,766/-. 5.7 It is the case of the petitioner that during the interregnum period, the petitioner has made various correspondences with the respondent-Department regarding the re-assessment of 11 Bills of Entry generating the Challans for the same amount of duty which were deposited by the petitioner on 07.06.2023 and again automatically calculated on Customs EDI System for payment of such duty. 5.8 On receipt of the refund claim of the petitioner, the Assistant Commissioner of Customs by letter dated 13.09.2024 c....
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....t Commissioner, however, by order dated 26.11.2024 rejected the refund claim of the petitioner relying upon the provisions of section 27 of the Act by observing as under: "11.3 Vide letter F. No. CUS/RFD/Misc/469/2024-Ref dated 24.10.2024, Cash section was requested to verify the said deposit challans and submit its report. The cash section vide letter F. No. 5/3-MISC/2021-22/CASH dated 25.10.20041 certified that the above referred challan is deposited with cash section of the Kandla customs Treasury, simultaneously same has been credited in the Government Account. 11.4 The Superintendent (Recovery), Custom House, Kandla vide letter dated 25.06.2024, reported that; "As per latest record available with section OIO No. 10/DSR/(10)CC(ADIN)/MUMBAI/2024-25 dated 22.05.2024 has been issued against M/s. Macro Polymers Pvt. Ltd." Whereas, on perusal of the copy of said OIO viz No. 10/DSR/(10)CC(ADIN)MUMBAI/2024-25 dated 22.05.2024, it is observed that the taxpayer has filed appeal in CESTAT vide appeal No. C/EH/11230/20 dated 24.06.2024 and OIO is still pending in CESTAT.. And after insertion/amending section 126E, the appeals with Pre-Deposit is to be c....
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....payment made by the petitioner with all the tax liabilities. It was pointed out that the Adjudicating Authority has admitted that there was double payment of Rs. 78,55,766/- and therefore, out of the two payments made by the petitioner of the same amount, the amount of Rs. 78,55,766/- cannot be said to be a tax and hence, as per the Article 265 of the Constitution of India, the amount is liable to be refunded to the petitioner forthwith. 6.3 It was also submitted that the Hon'ble Supreme Court in para 75 of the Judgement rendered on 28.04.2023 in case of Cosmo Films Ltd (supra), the petitioner was directed to approach the jurisdictional Commissioner and apply with the documentary evidence within six weeks from the date of the Judgement for claiming the refund of Input Tax Credit and therefore, it was incumbent upon the petitioner to deposit the amount of tax within six weeks from 28.04.2023 for submitting claim for refund of the Input Tax Credit with documentary evidence of duty payment. Accordingly, the petitioner deposited the amount on 03.06.2023 through manual Challan T.R.6 as no procedure, circular or tariff advice was issued and circulated by the respondent-Revenue even af....
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....ion 27 of the Customs Act. The same is reproduced herein below: "27. Claim for refund of duty: (1) ..... (1)(A).... (B) Save as otherwise provided in this section, the period of limitation of one year shall be computed in the following manner, namely:- (a) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 25, the limitation of one year shall be computed from the date of issue of such order; (b) where the duty becomes refundable as a consequence of any judgement, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year shall be computed from the date of such judgement, decree, order or direction. (c) where any duty is paid provisionally under section 18, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in case of re-assessment, from the date of such re-assessment." 9. Simultaneously, It would be essential to refer Para 75 of the judgement Dated 28.04.2023, passed by the Hon'ble Supreme Court of India in Cosmo Films (sup....
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....nd is itself a time-barred claim, the question of interest on refund would not arise and the Petitioner is not entitled to interest on such claims." 7.1 Referring to the above averments it was submitted that admittedly, the refund claim made by the petitioner is beyond the limited period of one year as mentioned in section 27(1B) of the Act and the last date of filing of the refund of claim was 06.06.2024. However, the petitioner filed its refund claim on 13.06.2024. 7.2 It was therefore submitted that no interference may be made in the impugned order as the same is passed by exercising the jurisdiction by respondent No. 2 and if the petitioner is aggrieved, the petitioner should avail the alternative efficacious remedy by preferring appeal in accordance with law. 8. Having heard learned advocates for the parties and considering the facts of the case, it is not in dispute that the petitioner has deposited Rs. 78,55,766/- twice; once on 07.06.2023 and secondly, on 29.03.2024 after passing of the reassessment orders of the Bills of Entry by the respondent-authority. 9. It is not in dispute that the petitioner is not required to pay amount of duty twice as per the decision....
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.... under sub-section (10) of section 73 for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, in respect of a tax period for the financial year 2017-18, up to the 30th day of September, 2023; (ii) excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation under sub-section (10) of section 73 of the said Act for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of erroneous refund; (iii) excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation for filing refund application under section 54 or section 55 of the said Act. 2. This notification shall be deemed to have come into force with effect from the 1st day of March, 2020. [F. No. CBIC-20001/2/2022-\GST] RAJEEV RANJAN, Under Secy." 23. The entry no.9(c) of Chapter 99 of GST Tariff-Services, reads as under:- "Supply of service by a Government Entity to Central Government, State Gover....
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.... prior to the date of issue of the invoice; (d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction; [(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises:] (f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof; (g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and (h) in any other case, the date of payment of tax." 28. Therefore, the contention of the petitioner that the Section 54(1) of the CGST Act is not applicable in the facts of the case is not tenable in view of the fact that the petitioner is liable to pay the GST under the Act. However, in view of the Notification No.32/2017, the petitioner was not granted e....
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....tion thus for consideration is whether the appellant should be deprived of the relief on account of the laches and delay. It is true that the appellant could have even when instituting the suit agitated the question of legality of the demands and claimed relief in respect of the earlier years while challenging the demand for the subsequent years in the writ petition. But the failure to do so by itself in the circumstances of the case, in our opinion, does not disentitle the appellant from the remedies open under the law. The demand is per se not based on the net profits of the immovable property, but on the income of the business and is, therefore, without authority. The appellant has offered explanation for not raising the question of legality in the earlier proceedings. It appears that the authorities proceeded under a mistake of law as to the nature of the claim. The appellant did not include the earlier demand in the writ petition because the suit to enforce the agreement limiting the liability was pending in appeal, but the appellant did attempt to raise the question in the appeal itself. However, the Court declined to entertain the additional ground as it was beyond the scope....
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....nt with the Government which the revenue cannot retain or withhold. Such claim, therefore, would not fall within Section 11B of the Act. It is true that insofar as the Act is concerned, for refund of duty, the provision is contained in Section 11B. However, merely because there is no specific statutory provision pertaining to return of amount deposited under a mistake, per se, in our opinion, should not deter us from directing the respondents to return such amount. Admittedly, there is no prohibition under the Act from returning such an amount. Allowing the respondents to retain such amount would be, in our opinion, highly inequitable. We may not be seen to suggest that such a claim can be raised at any point of time without any explanation. In a given case, if the petitioner is found to be sleeping over his right, or raises such a claim after unduly long period of time, it may be open for the Government to refuse to return the same and this court in exercise of discretionary writ jurisdiction, may also not compel the Government to do so. 16. In the present case, however, no such inordinate delay is pointed out. The petitioners have contended that the error was noticed by ....
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....t cannot withhold such amount which the petitioner rightfully claimed. Under the circumstances, question of applying limitation under section 11B of the Act would not arise since we hold that retention of such service tax would be without any authority of law." 14.3 Strong reliance was placed upon the decision of the Supreme Court in Salonah Tea Co. Ltd. v. Supdt. of Taxes (supra), wherein it has been held thus: "13. Under Article 113 of the Limitation Act, 1963 the limitation was the period of three years from the date the right to sue accrues. It may be noted that in the instant case under Section 23 of the Act, it was provided that the Commissioner shall, in the prescribed manner refund to a producer or a dealer any sum paid or realised in excess of the sum due from him under this Act either by cash or, at the option of the producer or dealer, be set off against the sum due from him in respect of any other period. Section 23 applies only in a case where money is paid under the Act. If there is no provision for realisation of the money under the Act, the act of payment was ultra vires, the money had not been paid under the Act. In that view of the matter Section....
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....herefore of the view that the view of the High Court in this matter cannot be sustained." 20. In State of M.P. v. Bhailal Bhai, AIR 1964 SC 1006, this Court had occasion to consider what was unreasonable delay in moving the court when tax was paid under a mistake. There the respondents were dealers in tobacco in the State of Madhya Bharat. The State had imposed sales tax on the sale of imported tobacco by the respondents. But no such tax was imposed on the sale of indigenous tobacco. The respondents filed writ petitions under Article 226 of the Constitution for the issue of writ of mandamus directing the refund of sales tax collected from them. They contended that the impugned tax was violative of Article 301(a) of the Constitution and they paid the tax under a mistake of law and the tax so paid was refundable under Section 72 of the Indian Contract Act, 1872. The appellant contended that there was no violation of Article 301 of the Constitution, and even if there was such violation the tax came within the special provision under Article 304(a) of the Constitution and the High Court had no power to direct refund of tax already paid and in any event the High Court should no....
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....ase on 10-7-1973 and there being a statement that the appellant came to know of that fact in October 1973 and there being no denial by the averment made on this ground, the High Court, in our opinion, in the instant case was in error in presuming that there was a triable issue on this ground and refusing to grant refund." (Emphasis supplied) 14.4 Thus, in view of the principles enunciated by the Supreme Court in Salonah Tea Co. Ltd. v. Superintendent of Taxes, Nowgong (supra), in case where money is paid by mistake, the period of limitation prescribed is three years from the date when the mistake was known. Besides, section 17 of the Limitation Act inter alia provides that when a suit or application is for relief from the consequences of a mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake, or could, with reasonable diligence, have discovered it. Therefore, in case where money is paid under a mistake, the limitation would begin to run only when the applicant comes to know of such mistake or with reasonable diligence could have discovered such mistake. Adverting to the case at hand, the mistake is in....
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....o filing of an application in Form-R of the Central Excise Act would indicate that the applicant was intending to claim refund of the duty with reference to Section 11B, therefore, now it is not open to him to go back and say that it was not refund of duty. No doubt in the present case, Form-R was used by the applicant to claim refund. It is the very case of the petitioner that they were exempted from payment of such service tax by virtue of circular dated 17-9-2004 and this is not denied by the Department and it is not even denying the nature of construction/services rendered by the petitioner was exempted from to payment of Service Tax. What one has to see is whether the amount paid by petitioner under mistaken notion was payable by the petitioner. Though under Finance Act, 1994 such service tax was payable by virtue of notification, they were not liable to pay, as there was exemption to pay such tax because of the nature of the institution for which they have made construction and rendered services. In other words, if the respondent had not paid those amounts, the authority could not have demanded the petitioner to make such payment. In other words, authority lacked authority to....
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....dated 11.07.2011 dismissed the Special Leave Petition in Appeal (civil) No.CC 10732 and 10733 of 2011 filed by the Commissioner of wages against the judgment and order of Karnataka High Court in the case of KKR (supra). 32. The Hon'ble Delhi High Court in the case of Teleecare Network (India) Pvt. Ltd. vs. Union of India, reported in 2018 (8) TMI 1901 has held as under:- "12. There is no dispute about the applicability of SRF Ltd (supra); indeed the Revenue's refrain during the hearing was that the amounts could not be refunded because the claims were time-barred and that the petitioner has an alternative remedy. This Court is of opinion that the plea of alternative remedy-an unoriginal and frequently used stereotypical defence by public bodies - in such cases at least dodges the crux of any dispute, i.e the liability of the concerned public body or agency on merits. Sans any dispute with respect to facts, this Court finds it entirely unpersuasive, since Article 144 of the Constitution, compels all authorities to give effect to the law declared by the Supreme Court (as in this case, the SRF Limited judgment). The other plea which the Customs had relied on,....
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..... 9. We are, therefore, of the opinion that the High Court, while disposing of the writ petition under Article 226 of the Constitution of India, was perfectly justified in holding that the bar of limitation which had been put against the respondent by the Collect of Central Excise (Appeals) to deny them the refund for the period September 1, 1970 to May 28,1971, and June 1, 1971 to February 19, 1972 was not proper as admittedly the respondent had approached the Assistant Collector Excise soon after coming to know of the judgment in Voltas case and the assessee was not guilty of any laches to claim refund." 9. In the above cited case, the Supreme Court stated that the Assessee's claim to refund would not be disallowed solely because it seemed barred by limitation. Since the Assessee in that case made the claim for refund shortly after learning about their entitlement for the same, it would not be just to hold that such claim is hit by laches. 11. A similar view has been taken by the Bombay High Court in the case of Parijat Construction Vs. Commissioner Excise, Nashik, reported in 2018 (359) ELT 113 (Bom), where the Bombay High Court has held as under:-....
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....y citizens as soon as they are due in accordance with law. Equally as a corollary of the said statement of law it follows that taxes collected without the authority of law, as in this case, from a citizen should be refunded because no State has the right to receive or to retain taxes or levies realised from citizens without the authority of law. Dealing with the question of bar of limitation for making a claim for refund of tax or duty paid or collected without the authority of law in such cases, the Court opined: (SCC p. 411, para 14) "Normally in a case where tax or money has been realised without the authority of law, the same should be refunded and in an application under Article 226 of the Constitution the court has power to direct the refund unless there has been avoidable laches on the part of the petitioner which indicate either the abandonment of his claims or which is of such nature for which there is no probable explanation or which will cause any injury either to the respondent or any third party. It is true that in some cases the period of three years is normally taken as a period beyond which the court should not grant relief but that is not an inflexible rul....
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....ith effect from 20th of September 1991, no person is entitled to claim and obtain refund of the excess duty paid except in accordance with the provision of Section 11B(2) of the Act, as amended, and that since the respondent had failed to produce any documentary evidence to show that it had not passed on the burden of excess excise duty to the consumers, it was not open to it to claim and obtain the refund. Learned Counsel therefore urged that in accordance with the directions of this Court in its order dated 8.10.1982, the respondent be directed to pay back the amount which was received by them under orders of this Court with interest @ 12% p.a." 35. Considering the above dictum of law, the amount of GST paid by the petitioner is admittedly paid as a self assessment, which the petitioner was not required to pay as per the Notification No.32/2017. Accordingly, in the facts of the case, the amount paid by the petitioner from electronic cash ledger is required to be refunded by the respondent authority and could not have been rejected on the ground of limitation under Section 54(1) of the CGST Act. 36. In view of the foregoing reasons, the impugned order dated 20.07....