Jindal Stainless Limited Vs Commissioner of Customs (CESTAT Hyderabad)
Introduction: The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Hyderabad recently allowed a refund claim by Jindal Stainless Limited, originally rejected due to delays attributed to the Covid-19 pandemic. Jindal Stainless Limited had challenged the Order-in-Appeal passed by the Commissioner of Customs (Appeals) Guntur, arguing that the original authority and the first appellate authority passed orders with a revenue bias, ignoring the impact of the pandemic on filing timelines.
Analysis: The case hinged on the interpretation of Section 27 of the Customs Act 1962, which permits a refund of customs duty or interest paid. The appellant’s legal counsel argued that a delay in filing the refund claim should not be applicable due to the Supreme Court’s suo motu order dated 10/01/2022, excluding the pandemic period from computing the prescribed period of limitation under various laws. The revenue authority’s stance was contradictory, claiming that the late fee did not qualify as customs duty or interest, thus refund of late fee is not covered by Section 27, while simultaneously arguing that the assessment could not be challenged without challenging the order of assessment.
The court ruled in favor of Jindal Stainless Limited, stating that the refund claim was a simple return of the amount paid by the appellant under a mistaken notion of law and thus was subject to general principles of restitution.
FULL TEXT OF THE CESTAT HYDERABAD ORDER
The appellant challenged the Order-in-Appeal dated 21/07/2022 passed by Commissioner of Customs (Appeals) Guntur.
2. Vide public notice no.21/2020 dated 26/03/2020, late filing fee in respect of bills of entry was waived in view of the COVID-19 pandemic . The facility of such waiver was withdrawn by public notice dated 10/062020. Meanwhile, the appellant’s CHA could not file the bills of entry in time and accordingly late fee of Rs. 12,77,591/- was paid as the appellants were not aware of the waiver of late fee vide public notice cited above . On realising the mistake, the appellants filed a refund claim for the above amount on 24/08/2021. A show cause notice dated 07/01/2022 was issued to the appellant and the original Adjudicating Authority rejected the refund claim in terms of the show cause notice. An appeal filed by the appellants before the First Appellate Authority came to be rejected. Hence, this appeal.
3. Shri N V Ramana Rao, learned Counsel, appearing on the behalf of the appellant would submit that the Original Authority and the First Appellate Authority passed the orders with a revenue bias without following the judicial discipline and without considering the submissions of the appellant. He submits that Hon’ble Supreme court vide suo motu order dated 10/01/2022 ordered that the period from 15/03/2020 to 28/02/2022 shall stand excluded in computing the prescribed period of limitation under various laws ; If the order is followed , there is no delay in filing the refund claim.
4. He further submits that Commissioner (Appeals) traversed beyond the scope of show cause notice while rejecting the appeal by considering factors which were not agitated in the procedures; Revenue shifted their stand at different stages; Department completely ignored the judicial pronouncements that the limitation under Section 11B of Central Excise Act, 1944 or for that matter Section 27 of Customs Act, 1962, to the cases involving tax paid under a mistaken notion of law. He further submits that even though it was clear that the late fee was paid when not payable, the department did not accede to the request for reassessment; rejecting the refund of tax/amount paid under a mistaken notion of law, is contrary to the Article 265 of the Constitution of India.
5. Shri P Amaresh , Authorised Representative, appearing for the revenue submits that the application dated 24/08/2021 was time barred ; It should have been filed before 01/05/2020 i.e; within one year of payment of late fee on 30/04/2021.
6. He further submits that Section 27 of the Customs Act 1962 envisaged refund of customs duty or interest paid thereof . The late fee paid by the applicant does not take the colour of Customs duty or interest. He would also submit that the appellant have not availed the provisions for the waiver of late fee in terms of Section 46(3) of the Customs Act, 1962 and Regulation 4(3) of the bill of entry (electronic integrated declaration and paperless processing) Regulations , 2018 or the public notice dated 26/03/2020. He further submits that challenging the assessment order including self assessment is a prerequisite for refund claim of any amounts; as the order was not challenged, refund cannot be sanctioned under Section 27 ibid. He relies upon the following case law.
