Commissioner of Customs (Preventive) Vs Raymond Apparel Limited (Calcutta High Court)
Conclusion: Assessee was entitled to refund of ₹7.98 crore as once a protest was lodged, it was upon the customs authorities to dispose of it by a speaking, appealable order, failing which, the protest could not be deemed to have lapsed.
Held: In the instant case, the issue revolved around whether a refund application under Section 27 of the Customs Act, 1962, would be barred by limitation when the duty was paid under protest. Tribunal held that duty paid under protest tantamount to challenge to the assessment and further challenging/modification of the assessment for the purpose of refund in such case, the application of the decision of the Hon’ble Supreme Court in ITC Limited Vs. Commissioner of Central Excise, Kolkata-IV [2019-VIL-32-SC-CU] could not apply. Further, Tribunal held that the department had not disputed that duty had been paid under protest by the respondent for all 174 bills of entry and no infirmity could be attributed to the impugned refund order for not fulfilling the requirements of challenge/modification of the bills of entry in terms of the decision of the Hon’ble Supreme Court in ITC Ltd. Accordingly, Tribunal affirmed the Order-in-original dated 24.5.2021, by which the original authority sanctioned refund amounting to Rs.7,98,08,012/- paid against 174 bills of entry under section 27 of the Customs Act, 1962. It was held that once a protest was lodged, it was upon the customs authorities to dispose of it by a speaking, appealable order, failing which, the protest could not be deemed to have lapsed. The court, rejecting the revenue’s contention that the protest became invalid after the Supreme Court’s decision in SRF Ltd. v. Commissioner of Customs, held that such a protest remains in force until explicitly vacated. It further held that marking “under protest” on the Bills of Entry effectively conveyed to the department that the duty was being paid under compulsion, not voluntarily, thus negating the need for reassessment or modification for refund eligibility. High Court also addressed the issue of interest, clarifying that Raymond Apparel Ltd. had not claimed interest from the original date of payment but only after 90 days from the date of refund sanction, thus meeting the statutory conditions. While upholding Tribunal’s decision in its entirety, the Court concluded that there was no illegality in Tribunal’s findings and dismissed the appeal filed by the department. It directed Revenue to refund the full amount of ₹7,98,08,012 along with applicable interest within three days of receiving the server copy of the judgment.
