2026-VIL-886-DEL-CU
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CUSTOMS High Court Cases

Customs - Limitation in appeals under Section 128 - Application of Section 14 of Limitation Act 1963 - Effect of ITC Limited decision changing legal position regarding necessity of modification before refund - Appellant imported pressure relief valves and filed refund applications under Section 27 of Customs Act within one-year period relying on binding jurisdictional law under Aman Medical and Micromax cases that treated refund claim as independent remedy not requiring prior modification of assessment. Supreme Court judgment in ITC Limited dated 18.09.2019 altered legal position by holding that refund claim could not be entertained unless assessment was first modified in appeal - Appellant within six days of ITC decision filed application under Section 149 seeking amendment of bills and requested abeyance of refund proceedings pending modification - Refund Authority rejected refund claims on ground that modification of assessments was prerequisite. Appellant thereafter filed appeals under Section 128. Commissioner (Appeals) rejected appeals as barred by limitation - Whether period spent in pursuing refund remedy which became abortive due to ITC Limited decision can be excluded under principles of Section 14 of Limitation Act - HELD - Section 14 of Limitation Act does not apply proprio vigore to appeals before Commissioner but principles underlying Section 14 apply to appeals under Section 128 of Customs Act. Where abortive proceeding undertaken in good faith and with due diligence proves abortive due to defect of jurisdiction or other cause of like nature, period spent in pursuing it may be excluded - Where refund proceeding was original proceeding instituted on 26.08.2019, period preceding that date cannot be excluded. However, distinct ground exists that binding jurisdictional law prevailing at time treated refund claim under Section 27 as independent sufficient remedy and necessity of modification was authoritatively declared only subsequently in ITC Limited - Period spent in pursuing abortive refund remedy and subsequent application under Section 149 liable to be excluded under principles of Section 14 up to 02.06.2020 when legal impediment crystallized. After exclusion, Appeals filed on 31.08.2020 fell within extended period under Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 – Since the Commissioner (Appeals) did not examine appeals on merits, those Appeals are restored to the file of the Commissioner of Customs (Appeals). The Commissioner (Appeals) shall decide them on merits, without reopening the question of limitation - The impugned orders are set aside and the appeals are allowed
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