2026-VIL-1580-CESTAT-CHE-CU
  1. Home
  2. 2026-VIL-1580-CESTAT-CHE-CU

CUSTOMS CESTAT Cases

Customs – Export Duty Refund – Limitation under Section 27 – Appellant exported non-alloy steel slabs on which export duty was leviable at the rate of 15 per cent ad valorem and voluntarily paid the same calculated on FOB price. The Board issued Circular dated 10.11.2008 clarifying that a policy decision had been taken that till 31.12.2008 the existing practice of computation of export duty by taking FOB price as cum-duty price may be continued and that with effect from 1st January 2009 the practice of computation shall be changed. Appellant filed refund claim for excess export duty paid. The original authority sanctioned the refund, however the Commissioner (Appeals) rejected the refund claim holding it to be time-barred under Section 27 of the Customs Act, 1962 – Whether the refund claim for excess export duty was time-barred under Section 27 when the cause of action arose only at the stage of ascertainment and reassessment of the excess duty – HELD – The refund claim was not time-barred. The cause of action for refund arose only on the date when the excess duty was ascertained and reassessed vide Note dated 21.09.2015 by the Export Department, and not from the date of original payment. The excess duty remained unassessed until the said Note dated 21.09.2015 and the reassessment carried out vide the Note constituted a valid reassessment within the meaning of Section 27(1B)(c) of the Customs Act. Till the assessment order was rectified, the question of refund would not arise and the refund claim filed prior to such reassessment could not be treated as time-barred on the principle established in Commissioner of Customs (Import) v. Indian Farmers Fertiliser Co-Op. Ltd.. The principle of limitation was accordingly inapplicable. The Tribunal declined to resolve the contention that limitation runs from the date of discovery of the mistake under Section 17 of the Limitation Act, 1963 or that Article 265 of the Constitution provides an independent route to refund, as the arguments were foreclosed by the Nine-Judge Bench decision in Mafatlal Industries Ltd. v. Union of India. Order-in-Original No.44746/2016 sanctioning the refund was correctly passed. The impugned order dated 11.08.2016 rejecting the refund claim is set aside – The appeals are allowed - Customs – Export Duty Refund – Interest – Following the determination that the refund claim for excess export duty was not time-barred and order of refund was rightfully passed, whether interest on the refund was payable – HELD – Interest under Section 27A is payable on the refunded amount. The interest runs from the date immediately following the expiry of three months from the date of reassessment on 21.09.2015, that is, from 22.12.2015, until the date of actual refund, at the notified rate. Although the principle established in Ranbaxy Laboratories Ltd. v. Union of India, provides that interest on delayed refund runs from expiry of three months from the date of receipt of the refund application unaffected by the pendency of appellate proceedings, such a premise did not translate to the present facts without modification. The cause of action for the refund, being the ascertained existence of the excess payment, did not arise until the Note dated 21.09.2015. Prior to 21.09.2015, there was no ascertained sum for the Department to have refunded and no delay on its part in refunding one. The delay lay in the reassessment itself becoming necessary and being carried out. To fix the interest clock at the date of the original application while fixing the limitation clock at the date of reassessment for the identical cause of action would be to hold that the claim was both premature and overdue at the same moment, which is an inconsistency the Tribunal declined to introduce. Ranbaxy, properly applied on these facts, requires interest to run from 21.09.2015, the same date fixed as the relevant date under Section 27(1B)(c). Appeal is allowed to the extent that interest is directed to be computed and paid as above.
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

GST Critical issues: ITC on...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?