By TIOL News Service

MUMBAI, JUNE 09, 2016: THE appellant filed a refund claim for Rs.2,30,569/- on the ground of short shipment of goods covered under Bill of Entry dt. 12.04.2000. The adjudicating authority observed that the duty was paid on 31.5.2000 and refund application was filed by the appellants on 04.12.2000. Inasmuch as the demand was time barred since filed beyond the prescribed period of 6 months in terms of Section27 of Customs Act, 1962.

The Commissioner (A) upheld this order and, therefore, an appeal was filed in CESTAT.

The appellant submitted that since the amount was paid towards the goods which were not imported, the same cannot be treated as duty but is in the form of advance deposit and, therefore, the provision of Section 27, of limitation, is not applicable.

The AR submitted that the arguments made by the appellant were not put forth before the lower authorities and, therefore, cannot be raised at this stage. Moreover, even though the goods were not imported but admittedly the amount paid by the appellant is in the form of Customs duty and under the account head thereof; there is no other provision for refund under the Customs Act except section 27; therefore,limitation of six months envisaged in section 27 is applicable and the refund claim has been correctly rejected as time barred.

The Bench observed -

++ Even though there is a short shipment but the amount paid by the importer/appellant is admittedly as a Customs duty only. Only for the reason that the goods were not imported the nature of the amount paid as duty will not stand altered, therefore whatever duty was paid by the appellant is a Customs duty only. Therefore, the refund of such Customs duty, in my considered view, is governed by Section 27 of the Customs Act, which is the only provision which deals with refund of duty refundable. In my view since the amount claimed as refund by the appellant can be refunded only under Section 27 of the Act, the limitation provided in the said Section shall also apply for sanction of refund. There is no other provision for refund of Customs duty except under Section 27 of the Act, therefore limitation is applicable.

++ In every case of refund the amount is refundable only where it is not payable as duty and accordingly every such amount shall be treated as an amount other than the duty. If this is accepted then Section 27 of the Act will stand redundant, as in every refund matter Section 27 shall not apply for the reason that any amount which is refundable is not a duty and all such amount shall be deemed to be paid other than the duty. Therefore in my considered view at the time of payment the appellant paid the amount under a particular head such as duty and when subsequently it is found that this amount is not payable, the same amount stand refundable to the assessee and such refund is treated as refund of Customs duty only.

Placing reliance on the decisions in Doaba Co-operative Sugar Mills - 2002-TIOL-426-SC-CX, Miles India Limited vs. Assistant Collector of Customs - 2002-TIOL-501-SC-CUS, Anam Electrical Manufacturing Co 1997 - 2002-TIOL-650-SC-CUS & Andrew Telecom (I) Pvt. Ltd. - 2014-TIOL-497-HC-MUM-ST, the Bench concluded that since refund of any amount is covered by Section 27 and there is no other provision, the Tribunal being a creature under the Central Excise/Customs Act cannot go beyond the statute and, therefore, cannot relax the time limitation provided thereunder.

Holding that the refund claim filed after 6 months is hit by limitation and, therefore, correctly rejected by the lower authority, the impugned order was upheld and the appeal was dismissed.

(See 2016-TIOL-1370-CESTAT-MUM)