Case Law Details
IFGL Refractories Ltd Vs Commissioner of Central Tax (CESTAT Hyderabad)
CESTAT Hyderabad held that refund claim for excess payment of customs duty after one year period from payment of duty is barred by limitation. Accordingly, refund claim rejected as time barred.
Facts- The appellants had filed a refund claim with Assistant Commissioner of Customs (CRS), Visakhapatnam for Rs.5,03,984/- on 10.08.2023. The said refund claim was that the appellant had paid the Duty twice due to ‘ICEGATE error’. Firstly, on 10.01.2020 and again on 17.01.2020. This double payment was made because the first payment on 10.01.2020 was not appropriated against the Bill of Entry No. 6415996 dt.10.01.2020, hence another payment made on 17.01.2020.
The original refund sanctioning authority, after going through the facts and submissions made by the appellant, inter alia, held the refund claim as time barred as the same was not filed before the expiry of one year period from payment of Duty and interest. Commissioner (A) also held that refund claim has been filed after 15 months and therefore, hit by limitation.
Conclusion- Held that in this case there has been a mistake in making excess payment of Customs Duty, which is not being disputed by either sides, however, this excess payment, whether it is in the nature of duty or otherwise has been discussed in detail the foregoing paras and it is clear that in the given set of facts, it was in the nature of duty only and therefore, it would be required to be dealt with in accordance with the provisions under Section 27 of the Customs Act in view of various judgments cited in support of the submissions that refund of any amount under the Customs Act has to be dealt with in accordance with Section 27 only and not otherwise.
The claim was filed before the customs authority, who is a creature of statute and therefore, he is bound by the provisions of the Act itself while considering the claim for refund unlike the Hon’ble High Courts and Hon’ble Supreme Court, who have wider jurisdiction and power under Article 226 and Article 32 of the Constitution respectively. It is also no longer res integra that the Tribunal is a creature of statute, which has to function within the four walls of statute itself. Therefore, in the facts of the case, no fault can be found with the rejection of the refund claim, which has admittedly been filed beyond the limitation period under the relevant statute i.e., Customs Act, 1962 and therefore, there is no ground for interfering with the order of the Commissioner (Appeals).
FULL TEXT OF THE CESTAT HYDERABAD ORDER
M/s IFGL Refractories Ltd (hereinafter referred to as the Appellant) are in Appeal against the OIA No. VIZ-CUSTM-000-APR—299-23-24 dt.19.02.2024 (impugned order), whereby, the Commissioner (Appeals) has disallowed the appeal filed by the appellant.
2. The brief facts of the case are that the appellants had filed a refund claim with Assistant Commissioner of Customs (CRS), Visakhapatnam for Rs.5,03,984/- on 10.08.2023. The grounds taken for the said refund claim was that the appellant had paid the Duty twice due to ‘ICEGATE error’. Firstly, on 10.01.2020 and again on 17.01.2020. This double payment was made because the first payment on 10.01.2020 was not appropriated against the Bill of Entry No. 6415996 dt.10.01.2020, hence another payment made on 17.01.2020.
3. The original refund sanctioning authority, after going through the facts and submissions made by the appellant, inter alia, held the refund claim as time barred as the same was not filed before the expiry of one year period from payment of Duty and interest. In fact, the original authority also excluded the period from 15.03.2020 till 28.02.2022 on account of Hon’ble Supreme Court’s general order with regard to extension of limitation period due to COVID-19 and thereafter worked out the due date for filing refund application as on or before 29.05.2022. However, since even after this exclusion, the refund application was filed much beyond the limitation period, it was held as time barred, considering the statutory provisions under Section 27 of the Customs Act, 1962. He also distinguished various case laws cited by the appellant and relied on the judgment of Hon’ble Supreme Court holding that for the refund of any amount under Section 11B, the time limitation has to be followed mandatorily. He has also relied on the judgments in the following cases in support of his conclusion that provisions for time limit under the statute are mandatory and that a statutory authority cannot traverse beyond the confines of law and cannot grant relief by bypassing the bar of limitation:-
a) M/s Cummins Technologies India Pvt Ltd Vs Assistant Commissioner, Mumbai [Writ Petition No. 4193 of 2022 (High Court – Bombay)]
b) Miles India Ltd Vs ACC [1987 (30) ELT 641 (SC)]
c) CCE Vs Doaba Coop. Sugar Mills [AIR 1988 SC 2052 – 1988 (37) ELT 478 (SC)]
4. Commissioner (Appeals), in the impugned order, has examined various case laws relied upon by the appellant and, inter alia, held that in the facts of the case, the duties were paid by the appellant in accordance with the self assessed bill of entry and that there was no case of either provisional assessment or payment of duty under protest. He also held that the amount paid in excess by the appellant is excess payment of duty by their own submission for the reason that claim has been filed in prescribed Customs Sevottam receipt form as “Duty paid erroneously due to technical glitches BE No. 6415996” and therefore, it is not in the nature of deposit but excess payment of duty for which the refund claim has to be governed by Section 27. He has further relied on various case laws, including Para 99 of judgment of Hon’ble Supreme Court in the case of Mafatlal Industries Ltd Vs UOI [1997 (89) ELT 247 (SC)], wherein by majority judgment, it was held that wherever refund of tax or duty is claimed on the ground that it has been collected from petitioner/plaintiff by mis-interpreting or mis-applying the provisions of law, even such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactment before the authorities specified thereunder and within the period of limitation prescribed therein. Therefore, relying on various judgments, in the facts of the case, he has held that refund claim has been filed after 15 months and therefore, hit by limitation.
5. The appellants, in their grounds of appeal, have mainly relied on the fact that this payment is not in the nature of duty and it is more in the nature of deposit and there is clearly a double payment. They have mainly relied on various case laws where it has been held that if any amount is paid by mistake, the authority has no right to retain the same or that the said excess amount paid is not in the nature of duty and hence, the time barring provision under Section 27 of Customs Act, 1962, would not be applicable. They have relied on the following judgments in support that time limit prescribed under Section 27 of the Customs Act would not be attracted in the facts of the case:-
a) Mafatlal Industries Ltd Vs UOI [1997 (89) ELT 247]
b) CCE (Appeals) Vs KVR Construction [2012 (26) STR 195 (Kar)]
c) Geojit BNP Paribhas Financial Services Ltd Vs CCE [2015 (39) STR 206]
d) Hind Agro Industries Ltd Vs CC [2008 (221) STR 336]
e) GB Engineers Vs UOI [2016 (43) STR 345]
f) Joshi Technologies International Vs UOI [2016 (339) ELT 21]
6. Learned Advocate for the appellant has mainly argued that in the facts of the case, the amount deposited again on 17.01.2020 was not in the nature of duty but it was in the nature of deposit and therefore, the provisions of Customs Act would not be applicable and instead the provisions of General law of limitation would be applicable. As per the limitation law, three years period is admissible and if the period between 15.03.2020 and 28.02.2022 is excluded in view of the order of the Hon’ble Supreme Court for exclusion of the same for computing limitation period on account of COVID, then the claim has been filed well within the period of three years. He has vigorously canvassed that Department cannot retain any unlawful amount and they are bound to return the same to the appellant. It has not been disputed that the amount of duty in respect of same Bill of Entry has been paid twice; once on 10.01.2020 and another on 17.01.2020. As regards the claim being filed as late as on 10.08.2023, he informs that they had realized their mistake on 17.01.2020 itself, however, they were not aware as to who would be the authority with whom they have to pursue the refund of the amount and initially they pursued the matter with the banks. However, on being advised for filing claim with the Customs Authority, they filed the claim before the Customs Authority. He has relied on various case laws, as cited supra, and submits that since Section 27 would not be attracted in the facts of the case, they are entitled for the refund.
7. Learned AR has reiterated the grounds taken by the Commissioner (Appeals) in the impugned order for rejecting the appeal of the appellants. He pointed out that it is apparent from the claim filed by the appellant that it is for refund of an amount paid as duty of Customs, even though he might have paid excess duty, but such excess payment of duty is also required to be regulated by statutory provisions governing grant of refund under the Act. Additionally, he submits that the issue is no longer res integra in the light of catena of judgments of Hon’ble High Courts and Tribunals, wherein the judgment of Hon’ble Supreme Court in the case of Mafatlal Industries Ltd (supra) has been considered and relied upon. He has relied on following case laws in support that in the facts of the case, the time limit applicable under Section 27 would be attracted and since the refund claim has been admittedly filed beyond the permissible statutory time limit, therefore, the refund claim is inadmissible and has been rightly rejected by refund sanctioning authority and subsequently, upheld by Commissioner (Appeals):-
a) MGM International Exports Ltd Vs Asst. Commissioner of ST, Chennai [2021-TIOL-989-HC-MAD-ST]
b) Cannanore Handloom Exports Vs CCE,C & ST, Calicut [2021 (44) GSTL 345 (Ker)]
c) Southern Surface Finishers Vs Asst. Commissioner of CE, Muvattupuzha [2019 (28) GSTL 202 (Ker)]
d) CC, NS-II Vs Purab Textile Pvt Ltd [2019 (365) ELT 285 (Bom)]
e) Commissioner of ST, Chennai Vs Nataraj and Venkat Associates [2015 (40) STR 31 (Mad)]
f) Andrew Telecom (I) Pvt Ltd Vs CC & CE, Goa [2014 (34) STR 562 (Bom)]
g) Uniroyal Marine Exports Ltd Vs CCE, Kozhikode [2021 (54) GSTL 156 (Ker)]
h) Cummins Technologies India Pvt Ltd Vs UOI [2023 (386) ELT 494 (Bom)]
Essentially, in all these cases cited by learned AR, various Hon’ble High Courts have taken a view that in view of the decision of Hon’ble Supreme Court in Mafatlal Industries Ltd (supra), even in the case of excess or double payment of tax or duty due to mis-construction, mis-interpretation or error of facts or law, the same has to be regulated by the provisions and rigour of limitation as provided under statutory provisions. In the case of MGM International Exports Ltd (supra), the Hon’ble Madras High Court held that payment of tax and appropriation and collection by service tax department at best was on account of mis-construction of provision of Finance Act and therefore, any refund of such tax paid or borne by any person would be governed by provisions of Central Excise Act as made applicable to refund under Finance Act, 1994. In the case of Cannanore Handloom Exports (supra), the Hon’ble High Court of Kerala relying on their earlier judgment of Division Bench of the same Court in the case of Southern Surface Finishers (supra), inter alia, held that mistake, if committed by the assessee, whether it be on law or facts, the remedy would be only under the statute and if that be so, the question of law has to be answered in favour of Revenue and against the assessee. Therefore, in this case also, even though the payment was made erroneously, the provision of statute would be applicable. In the case of Uniroyal Marine Exports Ltd (supra), the Hon’ble High Court of Kerala, relying on the judgment of Mafatlal Industries Ltd (supra) and Southern Surface Finishers (supra),reiterated the findings that the remedy for the mistake, be it of law or fact, has to be governed by the statutory provisions.
8. Learned AR has also relied on the judgment of Hon’ble Bombay High Court in the case of Cummins Technologies India Pvt Ltd (supra), wherein, the Hon’ble Court has dismissed the appeal of the appellant and upheld the Assistant Commissioner’s rejection of refund claim as being time barred and not sustainable under Section 27. The Hon’ble High Court had gone through various case laws and distinguished such case laws as follows:-
a) Collector Vs Doaba Co-Operative Sugar Mills [1988 (37) ELT 478 (SC)]
b) Commissioner Vs KVR Construction [2012 (26) STR 195 (Kar)]
c) DHL Express India Pvt Ltd Vs Commissioner [2021 (377) ELT 594 (Kar)]
d) Mafatlal Industries Ltd Vs UOI [1997 (89) ELT 247 (SC)]
e) Parijat Construction Vs Commissioner [2018 (359) ELT 113 (Bom)]
f) UPL Ltd Vs UOI [2022 (379) ELT 183 (Guj)]
g) Vedanta Ltd Vs Commissioner [2017 (345) ELT 577 (SC)]
9. Learned AR has also pointed out that the appellants have filed the claim in the proper format indicating it as a claim for refund of duty and not that of deposit and all through they have been claiming as refund of double payment of duty, which has been made by them under certain mistake. Therefore, even if it is a double payment of duty, it was deposited as duty initially as also claimed as refund of duty in their claim for refund. Therefore, the said amount cannot become a deposit and has to be examined for the purpose of refund on account of any excess payment or any other ground well within the four walls of the statutory provisions governing refund under the Customs Act.
10. Learned Advocate for the appellant has further submitted certain additional submissions vide their email dt.30.10.2024 in view of permission granted by the Bench for filing of additional submissions to the appellant as well as the department.
11. Learned Advocate has again reiterated that in view of the judgments cited viz., Mafatlal Industries Ltd vs UOI, UPL Ltd vs UOI, DHL Express India Pvt Ltd Vs CST and Vedanta Ltd Vs CC (all cited supra), the payment of duty by them in respect of which refund has been sought, cannot be treated as duty and therefore, will not be regulated by limitation provided within Section 27 of the Customs Act. He has further relied and elaborated on the judgments in the case of Ericsson India Pvt Ltd Vs CC [2022 (5) TMI 587 – CESTAT New Delhi], wherein it was held that double payment cannot be treated as duty and must be refunded as the department has no legal authority to retain them. Similarly, in the case of United News of India Vs UOI [2004 (168) ELT 442 (Del)], the Hon’ble Delhi High Court ruled that payments made in advance without assessment do not constitute duty and should be refunded without applying Section 27 limitations. He has further submitted that the Customs Authorities should refund excess payment suo moto relying on the judgment of Hon’ble High Court of Delhi in the case of Indo Rama Synthetics (India) Ltd Vs UOI (supra). Additionally, he has submitted that the excess payment was made on 17.01.2020 under bonafide mistake and on realizing the same, they were making efforts to recover the same through bank, etc., but due to pandemic caused by COVID leading to significant operational disruption from 15.03.2020, they could not do so and therefore, keeping in view the general exclusion of period from 15.03.2020 to 28.02.2022 from the limitation, the three year period would expire on 10.10.2024, whereas, their application has been filed much before that date i.e., 04.08.2023. He has also distinguished the judgments relied by the Commissioner (Appeals) in the OIA. He has submitted as under:-
a) Petronet LNG Ltd. v. Commissioner of Customs, Ahmedabad [2019 (369) ELT 791 (Tri. – Ahmd.)]: The Tribunal’s order was overturned by the Hon’ble High Court on 26.12.2019, where the Supreme Courts Mafatlal principle was applied, allowing the refund. Hence the case is not applicable.
b) Casa Grande Co-operative Housing v. Commissioner of CGST, Mumbai South [2019 (29) GSTL 349 (Tri. – Mumbai)]: This case is currently under appeal in the Hon’ble Bombay High Court, where the appeal has been admitted and is pending adjudication; Again not applicable
c) Cummins Technologies India Pvt Ltd. v. Assistant Commissioner, Refund Section [2023 SCC Online Bom 2943]: in para 22, the obiter clarifies that payment made under Bona fide mistake of law or fact will not fall within the provisions of S. 27 of the Customs Act. The limitation to make a claim in such a case would be the general law of limitation as prescribed under the Limitation Act, 1963. It is also distinguishable on facts, as per para 40 of the judgment, that the Appellant clearly presented the bona fide nature of the mistake by explicitly stating that the second payment was made in excess, a fact that was undisputed by the authority in both orders. In contrast, in Cummins Technologies, the petitioner failed to bring forth the bona fide nature of the mistake upfront. Hence the said judgment is not applicable.
d) The other SC and High Court judgments relied upon by the Commissioner Appeals are factually distinguishable, as they did not consider the extraordinary circumstances of the pandemic and failed to fully uphold the principles under Article 265 of the Constitution in light of the Mafatlal (supra) and Vedanta (supra) case which are binding.
12. He has also made additional submissions stating that in the facts of the case, they were forced to make additional payment on 17.01.2020 because the payment made on 10.01.2020 was rejected and therefore, the payment on 17.01.2020 is nothing but under protest. They have made a payment of Rs.50,393/- on 17.01.2020.
13. Learned AR has submitted, by way of additional submissions dt.30.10.2024, that it is not correct to say that the appellant had not claimed the refund of the amount as duty as they had paid the amount of Rs.5,03,984/- vide Challan No. CKL9331354 as customs duty and again filed for refund on 04.08.2023 asking for refund of customs duty paid in excess and therefore, the claim has to be examined within the purview of Section 27 of the Customs Act. He has also submitted that the reliance placed on the decisions viz., UPL Ltd (supra) and DHL Express India Pvt Ltd (supra) are not correct as these decisions have not taken into consideration the majority decision of the constitutional bench in the case of Mafatlal Industries Ltd (supra) at Para 99 and therefore, they are per incuriam. He has also distinguished the reliance placed by the appellant on the decision of the Apex Court in the case of Vedanta Ltd (supra) as in the said case, there was payment made in advance as also non-consideration of the majority decision in the case of Mafatlal Industries Ltd (supra). In fact, he submits that Hon’ble Bombay High Court in the case of Cummins Technologies (supra) distinguished the Vedanta Ltd decision holding that “the petitioner therein had filed application for refund of the amount of the Customs Duty paid in excess, as the goods for export were short-shipped”, which is not the case in the present appeal.
14. As regards reliance of the appellant on the judgments of Ericsson India and United News of India (supra), the learned AR submits that these decisions have also not taken into consideration Para 99 of the majority decision of the constitutional bench in the case of Mafatlal Industries Ltd (supra), whereby it was held that all refunds except a refund claim arising out of a provision being held as unconstitutional are to be processed under Customs Act only. Moreover, in the case of United News of India (supra), there was an advance amount deposited and the refund was on account of short receipt.
15. On the submission of the learned Advocate for the appellant relating to suo moto refund, learned AR has relied on the decision in the case of Rai Bahadur Narain Singh Sugar Mills Ltd Vs CGST [2023 (11) TMI 1163 – CESTAT New Delhi], wherein the Division Bench, inter alia, held that if duty is paid in excess of what is due or paid when it is not due, the assessee can claim refund but there is no mechanism to refund suo moto the duty paid under the Central Excise law. It further held that as per the majority decision of the constitutional bench in Mafatlal Industries Ltd case, the doctrine of unjust enrichment is not applicable to the State. Learned AR also points out that even after excluding the period permitted by the Hon’ble Supreme Court for calculating limitation, they have not filed it within the limitation period as permitted under the Customs Act and in the given set of facts and for the reasons and case laws cited, general law of limitation cannot be invoked by the Customs Authority in respect of any claim of refund of duty made in terms of provisions under the Customs Act before them. It was reiterated that the appellants have claimed the same as refund of excess paid customs duty and have filed the claim before the appropriate authority under the Customs Act and also went in appeal against the order to the appellate authority governed by the Customs Act. Learned AR relies on the judgment of Hon’ble Supreme Court in the case of Miles India Ltd Vs Asst. Collector of Customs [1987 (30) ELT 641 (SC)], wherein, it was, inter alia, held that there was no error in the order passed by the CEGAT against which the appellant had come to Hon’ble Supreme Court. The issue was whether the Customs Authorities, acting under the Act, were justified in disallowing the claim for refund as they were bound by the period of limitation provided therefor under Section 27(1) of the Customs Act, 1962 or otherwise. The Tribunal, relying on the judgments of Hon’ble Supreme Court in the case of Commissioner of Sales Tax, UP Vs M/s Parson Tools and Plants, Kanpur [AIR-1975-SC-1039] and in the case of Sharif Ahmad and others etc Vs The Regional Transport Authority, Meerut and others etc [AIR-1978-SC-209], had, inter alia, held that any claim filed before the Customs Authorities for refund of excess duty has to be treated under Section 27 of the Customs Act because there is no other provision providing for application for refund before the customs authorities, and the parties filing such refund claim are to be regulated by and restricted to the time limit provided therein. It also, inter alia, held that Tribunal while examining orders passed by such customs authorities, acting under the Act, has to examine their propriety and legality solely with reference to the provisions of the Act itself and that it is an established proposition that general law of limitation cannot be invoked before Quasi Judicial Authority in view of propositions laid down by the Hon’ble Supreme Court in the case of CST, UP Vs Parson Tools and Plants, Kanpur (supra) and Sharif Ahmad and others etc Vs The Regional Transport Authority, Meerut and other etc (supra).
16. Heard both the sides and perused the records.
17. The core issue that needs to be decided in the present appeal is whether in the facts of the case, the amount deposited on 17.01.2020 is in the nature of duty or it is in the nature of deposit and if it is in the nature of deposit, whether Section 27 can be made applicable to the same or otherwise for the purpose of determining the limitation. It is not disputed that the amount has been paid twice by the appellant under some misconception that the first amount paid on 10.01.2020 was not duly credited and therefore, again the amount along with differential interest was paid for the same consignment on 17.01.2020. However, as soon as they realized that first amount was already credited/appropriated towards duty liability, they started looking for refund of the second amount, which they had paid again on 17.01.2020. The appellants have tried to justify the delay in filing the refund claim before the Customs authority on two counts viz., firstly, even though they were made aware of their double payment as soon as they paid the second time, but they were pursuing the claim from the wrong entity i.e., banks and secondly, due to COVID they were not able to pursue it vigorously and effectively. They have relied on many case laws, as cited supra, and I have perused those case laws.
18. In the case of UPL Ltd (supra), it was, inter alia, held by the Hon’ble Gujarat High Court that the second payment of Customs Duty paid under bonafide mistake cannot be treated as duty and therefore, the same cannot be retained by the Department and needs to be refunded. They have also relied on certain decisions of the coordinate benches of Hon’ble Gujarat High Court, where refunds have been allowed under similar situation. Essentially, the Hon’ble High Court has held that where the payment of duty has been made under mistake, the statutory time limit would not be applicable. Similarly, in the case of DHL Express India Pvt Ltd (supra), the Hon’ble High Court of Karnataka, inter alia, keeping in view the judgment of Hon’ble Supreme Court in the case of Mafatlal Industries Ltd (supra), held that when the duty is paid without authority of law, the refund provisions under Section 27 of the Customs Act would not be applicable and the limitation in terms of Limitation Act would be applicable. This judgment relied on the cases of Mafatlal Industries Ltd, KVR Construction (supra), Geojit BNP Paribhas Financial Services Ltd (supra), Hind Agro Industries Ltd (supra), GB Engineers (supra) and Joshi Technologies International (supra) and came to the conclusion that for the customs duty paid in excess, the Department is liable to refund the same and limitation provided under Section 27 of the Act would not be applicable. Similarly, in the case of Ericsson India Pvt Ltd [2022 (5) TMI 587 – CESTAT New Delhi], the coordinate bench of this Tribunal, inter alia, held that when the amount is paid twice, one of the payments has to be refunded and in terms of Section 17 of Limitation Act where there is an application for a relief from the consequences of the mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake, or could with reasonable diligence, have discovered it. However, in this case, the Tribunal noted that the bills of entry were provisionally assessed, which were not yet finalized. The Tribunal had relied on various case laws including Mafatlal Industries Ltd (supra). One of the case laws relied heavily by the appellant is Vedanta Ltd (supra), wherein the Hon’ble Supreme Court has held that in their opinion, the provision of Section 27 of the Customs Act would clearly not apply to the present case on its plain language. In the case of Indo Rama Synthetics (India) Ltd [2002 (143) ELT 299 (Del)], the Hon’ble High Court of Delhi was concerned with legality of the application under Section 154 of the Customs Act seeking rectification of certain clerical errors and as a consequence, refund. In the case of CST, UP Vs Auriaya Chamber of Commerce, Allahabad [1986 (25) ELT 867 (SC)], the Hon’ble Supreme Court, examined the applicability of limitation under the statutory provisions of the VAT Act, as also under Limitation Act, Indian Contract Act, etc.
19. I find that the learned AR has relied heavily on majority order of the Hon’ble Supreme Court in Mafatlal Industries Ltd (supra). On the issue of limitation and provisions governing refund, both under Section 11B of Central Excise Act, 1944 and Section 27 of the Customs Act, 1962, the majority decision, inter alia, held that all claims for refund (excepting those which arise as a result of declaration of unconstitutionality of a provision whereunder the levy was created) have to be preferred and adjudicated only under the provisions of respective enactment. The relevant paras and sub-paras of the order are reproduced below for ease of reference:-
“68. Re. : (I) : Hereinbefore, we have referred to the provisions relating to refund obtaining from time to time under the Central Excises and Salt Act. Whether it is Rule 11 (as it stood from time to time) or Section 11B (as it obtained before 1991 or subsequent thereto), they invariably purported to be exhaustive on the question of refund. Rule 11, as in force prior to August 6, 1977, stated that “no duties and charges which have been paid or have been adjusted….shall be refunded unless the claimant makes an application for such refund under his signature and lodges it to the proper officers within three months from the date of such payment or adjustment, as the case may be”. Rule 11, as in force between August 6, 1977 and November 17, 1980 contained sub-rule (4) which expressly declared: “(4) Save as otherwise provided by or under this rule, no claim of refund of any duty shall be entertained”. Section 11B, as in force prior to April, 1991 contained sub-section (4) in identical words. It said : “(4) Save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be entertained”. Sub-section (5) was more specific and emphatic. It said : “Notwithstanding anything contained in any other law, the provisions of this section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in respect of which such amount was collected were not excisable or were entitled to exemption from duty and no court shall have any jurisdiction in respect of such claim.” It started with a non-obstante clause; it took in every kind of refund and every claim for refund and it expressly barred the jurisdiction of courts in respect of such claim. Subsection (3) of Section 11B, as it now stands, is to the same effect – indeed, more comprehensive and all-encompassing. It says, “(3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provision of this Act or the rules made thereunder or in any law for the time being in force, no refund shall be made except as provided in sub-section”.
The language could not have been more specific and emphatic. The exclusivity of the provision relating to refund is not only express and unambiguous but is in addition to the general bar arising from the fact that the Act creates new rights and liabilities and also provides forums and procedures for ascertaining and adjudicating those rights and liabilities and all other incidental and ancillary matters, as will be pointed out presently. This is a bar upon a bar – an aspect emphasised in Para 14, and has to be respected so long as it stands. The validity of these provisions has never been seriously doubted. Even though in certain writ petitions now before us, validity of the 1991 (Amendment) Act including the amended Section 11B is questioned, no specific reasons have been assigned why a provision of the nature of sub-section (3) of Section 11B (amended) is unconstitutional. Applying the propositions enunciated by a seven-Judge Bench of this Court in Kamala Mills, it must be held that Section 11B [both before and after amendment] is valid and constitutional. In Kamala Mills, this Court upheld the constitutional validity of Section 20 of the Bombay Sales Tax Act (set out hereinbefore) on the ground that the Bombay Act contained adequate provisions for refund, for appeal, revision, rectification of mistake and for condonation of delay in filing appeal/revision. The Court pointed out that had the Bombay Act not provided these remedies and yet barred the resort to civil court, the constitutionality of Section 20 may have been in serious doubt, but since it does provide such remedies, its validity was beyond challenge. To repeat – and it is necessary to do so – so long as Section 11B is constitutionally valid, it has to be followed and given effect to. We can see no reason on which the constitutionality of the said provision – or a similar provision – can be doubted. It must also be remembered that Central Excises and Salt Act is a special enactment creating new and special obligations and rights, which at the same time prescribes the procedure for levy, assessment, collection, refund and all other incidental and ancillary provisions. As pointed out in the Statement of Objects and Reasons appended to the Bill which became the Act, the Act along with the Rules was intended to “form a complete central excise code”. The idea was “to consolidate in a single enactment all the laws relating to central duties of excise”. The Act is a self-contained enactment. It contains provisions for collecting the taxes which are due according to law but have not been collected and also for refunding the taxes which have been collected contrary to law, viz., Sections 11A and 11B and its allied provisions. Both provisions contain a uniform rule of limitation, viz., six months, with an exception in each case. Sections 11 and 11B are complimentary to each other.
To such a situation, Proposition No. 3 enunciated in Kamala Mills becomes applicable, viz., where a statute creates a special right or a liability and also provides the procedure for the determination of the right or liability by the Tribunals constituted in that behalf and provides further that all questions about the said right and liability shall be determined by the Tribunals so constituted, the resort to civil court is not available – except to the limited extent pointed out therein. Central Excise Act specifically provides for refund. It expressly declares that no refund shall be made except in accordance therewith. The Jurisdiction of a civil court is expressly barred – vide sub-section (5) of Section 11B, prior to its amendment in 1991, and sub-section (3) of Section 11B, as amended in 1991. It is relevant to notice that the Act provides for more than one appeal against the orders made under Section 11B/Rule 11. Since 1981, an appeal is provided to this Court also from the orders of the Tribunal. While Tribunal is not a departmental organ, this court is a civil court. In this view of the matter and the express and additional bar and exclusivity contained in Rule 11/Section 11B, at all points of time, it must be held that any and every ground including the violation of the principles of natural justice and infraction of fundamental principles of judicial procedure can be urged in these appeals, obviating the necessity of a suit or a writ petition in matters relating to refund. Once the constitutionality of the provisions of the Act including the provisions relating to refund is beyond question, they constitute “law” within the meaning of Article 265 of the Constitution. lt follows that any action taken under and in accordance with the said provisions would be an action taken under the “authority of law”, within the meaning of Article 265.
In the face of the express provision which expressly declares that no claim for refund of any duty shall be entertained except in accordance with the said provision, it is not permissible to resort to Section 72 of the Contract Act to do precisely that which is expressly prohibited by the said provisions. In other words, it is not permissible to claim refund by invoking Section 72 as a separate and independent remedy when such a course is expressly barred by the provisions in the Act, viz., Rule 11 and Section 11B. For this reason, a suit for refund would also not lie. Taking any other view would amount to nullifying the provisions in Rule 11/Section 11B, which, it needs no emphasis, cannot be done. It, therefore, follows that any and every claim for refund of excise duty can be made only under and in accordance with Rule 11 or Section 11B, as the case may be, in the forums provided by the Act. No suit can be filed for refund of duty invoking Section 72 of the Contract Act. So far as the jurisdiction of the High Court under Article 226 – or for that matter, the jurisdiction of this court under Article 32 – is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment.
.
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96. It would be evident from the above discussion that the claims for refund under the said two enactments constitute an independent regimen. Every decision favourable to an assessee/manufacturer, whether on the question of classification, valuation or any other issue, does not automatically entail refund. Section 11B of the Central Excises and Salt Act and Section 27 of the Contract Act, whether before or after 1991 amendment – as interpreted by us herein – make every refund claim subject to proof of not passing-on the burden of duty to others. Even if a suit is filed, the very same condition operates. Similarly, the High Court while examining its jurisdiction under Article 226 – and this Court while acting under Article 32 – would insist upon the said condition being satisfied before ordering refund. Unless the claimant for refund establishes that he has not passed on the burden of duty to another, he would not be entitled to refund, whatever be the proceedings and whichever be the forum. Section 11B/Section 27 are constitutionally valid, as explained by us hereinbefore. They have to be applied and followed implicitly wherever they are applicable.
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99. The discussion in the judgment yields the following propositions. We may forewarn that these propositions are set out merely for the sake of convenient reference and are not supposed to be exhaustive. In case of any doubt or ambiguity in these propositions, reference must be had to the discussion and propositions in the body of the judgment.
(i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff – whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter – by mis-interpreting or mis-applying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by mis-interpreting or mis-applying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactment before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 – and of this Court under Article 32 – cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it.
The said enactments including Section 11B of Central Excises and Salt Act and Section 27 of the Customs Act do constitute “law” within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties, imposed thereunder . Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal – which is not a departmental organ – but to this Court, which is a civil court.
(ii) Where, however, a refund is claimed on the ground that the provision of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview of the enactment, can be made either by way of a suit or by way of a writ petition. This principle is, however, subject to an exception : where a person approaches the High Court or Supreme Court challenging the constitutional validity of a provision but fails, he cannot take advantage of the declaration of unconstitutionality obtained by another person on another ground; this is for the reason that so far as he is concerned, the decision has become final and cannot be re-opened on the basis of a decision on another person’s case; this is the ratio of the opinion of Hidayatullah, CJ. in Tilokchand Motichand and we respectfully agree with it.
Such a claim is maintainable both by virtue of the declaration contained in Article 265 of the Constitution of India and also by virtue of Section 72 of the Contract Act. In such cases, period of limitation would naturally be calculated taking into account the principle underlying Clause (c) of subsection (1) of Section 17 of the Limitation Act, 1963. A refund claim in such a situation cannot be governed by the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be, since the enactments do not contemplate any of their provisions being struck down and a refund claim arising on that account. In other words, a claim of this nature is not contemplated by the said enactments and is outside their purview.
(iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., by the people. There is no immorality or impropriety involved in such a proposition.
The doctrine of unjust enrichment is a just and salutory doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant to be exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State. State represents the people of the country. No one can speak of the people being unjustly enriched.
…….. ”
20. As would be apparent from the majority order that even when there is refund emanating from mistake of law or fact or for that matter interpretation, as long as it is not arising due to unconstitutionality of the levy, it has to be preferred within the provisions of the statute itself. The appellants are equating double payment with the unconstitutionality of levy and therefore, treating this as deposit. This interpretation is not correct in as much as a refund arising solely on account of provisions of enactment being held as unconstitutional is a case where there has been initial levy under a specific provision of statute, which was later on found to be unconstitutional and therefore, declared null and void by the higher judiciary. In such case, the amount so paid can be claimed as refund without applying the limitation indicated in the concerned statute. In the case of Assistant Collector of Customs Vs Anam Electrical Manufacturing Co. [1997 (90) ELT 260 (SC)], it was, inter alia, held that where a refund application was filed by the manufacturer/purchaser beyond the statutory time limit as prescribed under Section 11B of Central Excise Act or Section 27 of the Customs Act, such petitions must be held to be untenable in law regardless of any direction to the contrary contained in the order of any appeal, suit or writ petition and that statutory time limit not extendable by any authority or Court in case of ‘illegal levy’. In the case of MGM International Exports Ltd (supra), the Hon’ble High Court of Chennai, relying on the decision of Hon’ble Supreme Court in the case of Mafatlal Industries Ltd (supra) in its proper perspective, inter alia, held that any refund of tax paid or borne by any person would be governed by the provisions of Central Excise Act, 1944 as made applicable to refund under Finance Act, 1994 by virtue of Section 83 of the Finance Act. The Hon’ble High Court of Chennai also made observation with regard to various case laws cited by the petitioners to the effect that those decisions have either not considered the majority decision of Hon’ble Supreme Court in the case of Mafatlal Industries Ltd (supra) in its proper perspective or have ignored the same altogether. In the case of Uniroyal Marine Exports Ltd (supra), the Hon’ble High Court of Kerala upheld the decision in the case of Southern Surface Finishers (supra). Para 11 of the said order is reproduced below for ease of reference:-
“11. At the risk of repetition, here, the assessees paid up the tax and later realised that they are entitled to exemption. Going by the majority judgment, in Mafatlal Industries Limited (supra), we have to find such cases being subjected to the rigour of limitation as provided under Section 11B. The limitation, in the relevant period, being one year, there could be no refund application maintained after that period. We, hence, find the order impugned in the writ petitions to be proper and we dismiss the writ petitions. We hold that the judgment dated 6-7-2015 in WP (C) No. 18126/2015 [2015 (39) S.T.R. 706 (Ker.)] [M/s. Geojit BNP Paribas Financial Services Ltd. v. Commissioner of Central Excise] is not good law, going by the binding precedent in Mafatlal Industries Limited (supra). The writ petitions would stand dismissed answering the reference in favour of the Revenue and against the assessees. No costs.”
21. Similarly, in the case of Karanja Terminal & Logistics Pvt Ltd Vs CCGST & CE, Mumbai [2024 (10) TMI 1060 – CESTAT Mumbai], after considering the judgment of Hon’ble Supreme Court in the case of Doaba Cooperative Sugar Mills (supra), inter alia, it was held that on careful reading of the constitutional Bench judgment of the Hon’ble Supreme Court, the position of law would be made clear that the time line provided in Section 11B of the Act is not an empty formality and the same has to be strictly followed by the person who seeks refund. It also observed that since the appellant had filed refund claim in the form and manner prescribed under Section 11B of the Act, the provision contained therein alone have the application and accordingly, the department had acted upon, based on such statutory provision in disposal of such refund applications.
22. In the case of Andrew Telecom (I) Pvt Ltd (supra), the Hon’ble High Court of Bombay at Para 19, inter alia, held as under:-
“19. Before us, the undisputed position is that the amount was paid by the Appellant as Service Tax. That tax was not imposable or leviable on export of services was a clarification made by the Department and relying on that clarification, the refund of duty or Service Tax was claimed. This was squarely a case falling within the provisions of the Central Excise Act, 1944 and therefore, the rule of limitation under Section 11B was applied. That was applied when the application for refund was made invoking Section 11B of the Central Excise Act, 1944. We have no manner of doubt that when this was the provision invoked, same applies with full force including the rule of limitation prescribed therein. For these reasons, we are of the opinion that the decisions relied upon cannot be of any assistance.”
23. Similarly, in the case of Cummins Technologies India Pvt Ltd (supra), the Hon’ble High Court, inter alia, in Para 38 held as under:-
“38. The decision of the Apex Court in the case of Collector of Central Excise, Chandigarh v. M/s. Doaba Co-operative Sugar Mills Ltd. (supra) in our view would assist the case of the Respondents. Where the duty has been levied without authority of law or without reference to any statutory authority or the specific provisions of the Act and the Rules framed thereunder have no application, the decision will be guided by the general law and the date of limitation would be the starting point when the mistake or the error comes to light, but as held in the said decision, in making claims for refund before the departmental authority, an assessee is bound within the four corners of the statute and the Rules framed thereunder must be adhered to; the authorities functioning under the Customs Act are bound by the provisions of the Customs Act and if the proceedings are taken under the Customs Act by the department, the provisions of limitation prescribed in the Customs Act will prevail.”
24. I also find that in a recent judgment by the Larger Bench of the Tribunal in the case of Oil and Natural Gas Corporation Ltd [Final Order No. 40696 of 2024 dt.20.06.2024], it was, inter alia, held that all refunds relating to illegal levy have to be pursued under Section 11B of Central Excise Act with an exception to the jurisdiction of High Courts under Article 226 and Supreme Court under Article 32 of the Constitution of India. The relevant portion of the order is reproduced as under:-
“73. A simple reading of the said observation it is clear that a claim of refund when it is in the nature of ‘illegal levy’, necessarily to be pursued under and in accordance with the provisions of the respective enactment whereunder it is paid; the mechanism/ procedure for its refund is prescribed under the said enactment, including the authorities specified thereunder and the period of limitation prescribed therein. This is clear from their lordships observation as: “no suit is maintainable in that behalf”. However, an exception to the said principle, also observed by their lordships as: “while the jurisdiction of the High Courts under Article 226 and of this Court under Article 32- cannot be circumscribed by the provisions of the said enactments, however, they will certainly have due regards to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act”. Thus, all refunds relating to ‘illegal levy’ have to be pursued under Section 11B of the Central Excise Act with an exception to the jurisdiction of High Courts under Article 226 and Supreme Court under Article 32 of the Constitution of India.
74. This inference is further strengthened from the observation of the Hon’ble Supreme Court in interpreting the term ‘law’ appearing at Article 265 of the Constitution of India. Their Lordships held that the provisions of the enactments including Section 11B of the Central Excise and Salt Act, 1944 and Section 27 of the Customs Act, 1962 do constitute “law” within the meaning of Article 265 of the Constitution of India and hence any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded as the case may be, under the authority of law. In other words, all ‘illegal levy’ are held to be collected without authority of law and to be refunded as prescribed under Section 11B of the Central Excise Act, 1944 and Section 27 of the Customs Act, 1962. Further, it is very clearly laid down by the Hon’ble Apex Court that all refund claims except that of unconstitutional levy had to be and must be filed and adjudicated under the provisions of the Central Excise and Salt Act or the Customs Act, as the case may be. Further, it is laid down that these Acts provide a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to the Tribunal which is not a departmental organization, but to this court which is a civil court.”
22. Therefore, the arguments made by the learned AR and the case laws cited would indicate that refund of any kind arising on any ground, except on the ground of unconstitutionality of the levy, has to be dealt with in accordance with the provisions of the statute and even if a person calls a double payment or triple payment as deposit but once it has been paid as if it was being paid in discharge of levy or duty, it would be in the nature of duty itself even if at a later date it was found to be in excess or was not required to be paid at all for any reason other than the levy itself is held as unconstitutional. The law provides for remedy in the Act itself, however, that is subject to certain procedures and limitations. There is no unconstitutionality about either levy of Customs Duty under the proper provisions or for processing of refunds under Section 27. The grounds for seeking refund can be many and varied but the correct appreciation of majority judgment in the case of Mafatlal Industries Ltd (supra) would indicate that all the claims have to be processed within the four walls of the statute specially by the authorities working within the ambit of the statute. In other words, limitation under the relevant Act has to be complied with. The appellants have relied on plethora of case laws and I have perused the same. I find that these cases have either relied on some case laws, which had not taken into account the majority judgment in the case of Mafatlal Industries Ltd (supra) and therefore, may not have the binding precedent. In the case of UPL Ltd (supra), the Hon’ble High Court has relied on many case laws including Cosmol Energy Pvt Ltd [2021 (55) GSTL 390 (Guj)], Joshi Technologies International (supra), Salonah Tea Company Ltd [1988 (33) ELT 249 (SC)], where the Hon’ble High Courts have not considered the binding majority judgment of the constitutional bench in the case of Mafatlal Industries Ltd (supra). In the case of DHL Express India Pvt Ltd (supra) again the facts are different than the present facts in as much as the appellants were running from pillar to post to get refund of the excess customs duty and the Hon’ble High Court held that appellants were not at fault in the matter, whereas, in the present case, it is apparent that the appellants themselves have made double payment and thereafter also took considerable period of time in filing refund claim before the proper authority. It is an admitted fact that they have not filed any refund claim under any other law before any other Court or judicial body and approached only the Customs Authority in respect of double payment of customs duty. It is also noticed that the appellants in this case had also relied on KVR Construction (supra), which the Hon’ble High Court of Mumbai has distinguished in the case of Andrew Telecom (I) Pvt Ltd (supra). In fact, in Para 19 of the order, the Hon’ble High Court, inter alia, held as under:-
“19. Before us, the undisputed position is that the amount was paid by the Appellant as Service Tax. That tax was not imposable or leviable on export of services was a clarification made by the Department and relying on that clarification, the refund of duty or Service Tax was claimed. This was squarely a case falling within the provisions of the Central Excise Act, 1944 and therefore, the rule of limitation under Section 11B was applied. That was applied when the application for refund was made invoking Section 11B of the Central Excise Act, 1944. We have no manner of doubt that when this was the provision invoked, same applies with full force including the rule of limitation prescribed therein. For these reasons, we are of the opinion that the decisions relied upon cannot be of any assistance.”
26. Similarly, in the case of DHL Express India Pvt Ltd (supra), reliance has also been placed on Geojit BNP Paribhas Financial Services Ltd (supra), which was held to be “not good law” by the Division Bench of Hon’ble Kerala High Court in the case of Southern Surface Finishers (supra). The judgment in the case of Hind Agro Industries Ltd (supra), relied upon by the appellant, was distinguished by the Division Bench of Hon’ble Delhi High Court in the case of HT Media Ltd [2017 (6) GSTL 266 (Del)]. In fact, in the case of HT Media Ltd (supra), the Hon’ble Delhi High Court, at Para 9, held as follows:-
“9. In both, Hind Agro Industries Limited (supra) and Alar Impex Private Limited (supra), the question examined was whether the levy in question, which was cess in one case (Hind Agro) and service tax in the other (Alar Impex), was at all payable in the first instance. As far as the levy of cess is concerned, this Court in Hind Agro Industries Limited (supra) held that it was outside the purview of ‘customs duty’ under Section 27 of the Customs Act, 1962. In Alar Impex Private Limited (supra), this Court found that the CESTAT had failed to satisfy itself that the “services rendered by the appellant were, on facts, amenable to Service Tax”. Where the services rendered were not amenable to service tax, the question of applying for refund under Section 11B of the CE Act would not arise.”
27. The judgment in the case of United News of India Vs UOI [2004 (168) ELT 442 (Del)] can be distinguished on facts as in that case it was held by the Hon’ble High Court of Delhi that assessee could not have filed refund application before the receipt of short landing certificate and as the assessee/party had filed refund application within six months of short landing certificate, it was held that the refund application was not barred by limitation. This is not the factual position in the present appeal. A great deal of reliance has been placed by the appellant on the case of Vedanta Ltd (supra), however, in this case also the facts are distinguishable as the petitioner had paid customs duty for export of goods in advance, however, the export was short shipped and therefore, in the factual matrix, it was held that Section 27 would not be applicable. Further, this order has not at all taken into consideration the 9 judge constitutional bench decision in the case of Mafatlal Industries Ltd (supra). Therefore, this judgment is also not applicable to the present case. Moreover, in the case of Cummins Technologies (I) Pvt Ltd (supra), the Hon’ble High Court of Mumbai, while distinguishing the case of Vedanta Ltd (supra), held that the decision in the case of Vedanta Ltd would not apply to the facts of this case as in that case the goods were short shipped, which meant no duty can be levied and there is no finding that the mistake was not bonafide, but that is not the case here. In the case of Indo Rama Synthetics (I) Ltd (supra), the question was payment of higher duty by an importer owning to a computer mistake and whether the same could be rectified under Section 154 of the Customs Act. Moreover, in this case, no final decision was arrived at and the matter was remanded. In the case of Formica India Division Vs CCE [1995 (77) ELT 511 (SC)], the facts are on a different footings and can be distinguished from the factual matrix of the present appeal. Appellants have also relied on the judgment of Hon’ble Supreme Court in the case of Auriaya Chamber of Commerce (supra) where the assessment order and the realization of money was based on ultra vires provision of the UP Sales Tax Act and therefore, even as held in the case of Mafatlal Industries Ltd (supra), such cases would not attract Section 27 or limitation. Therefore, this is also not applicable to the present case.
28. Therefore, on appreciation of various case laws of Hon’ble Supreme Court, Hon’ble High Courts and Tribunals, I am of the view that barring the situation where the refund is filed on account of unconstitutionality of the levy itself, all kinds of refund have to be dealt with the statutory provisions within the statute and its entire provisions would be applicable in full force including limitation. In the present appeal, it is not disputed that the amount has been paid twice because of some miscommunication or any other factor including what appellants are saying as malfunctioning of ICEGATE. It is not the case where it has been paid under the provision which has been held to be ultra vires of the constitution or it was paid due to incorrect appreciation of law. At best, it will fall within the category of clerical error or factual mistake or lack of information but by no stretch of imagination, such payment would fall under the nature of deposit or illegal levy. When the second payment was made on 17.01.2020, it was made as if it was being paid as duty of customs and the claim for refund has also been filed before the customs authority in the provided format as if it was duty of customs as held by Hon’ble Bombay High Court in the case of Cummins Technologies India Pvt Ltd Vs UOI (supra), in Para 39 as follows:-
“38. ……. in making claims for refund before the departmental authority, an assessee is bound within the four corners of the statute and the Rules framed thereunder must be adhered to; the authorities functioning under the Customs Act are bound by the provisions of the Customs Act and if the proceedings are taken under the Customs Act by the department, the provisions of limitation prescribed in the Customs Act will prevail.”
29. Similarly, in the case of CCE, Chandigarh Vs Doaba Cooperative Sugar Mills (supra), in para 6, the Hon’ble Supreme Court, inter alia, held as follows:-
“6. It appears that where the duty has been levied without the authority of law or without reference to any statutory authority or the specific provisions of the Act and the Rules framed thereunder have no application, the decision will be guided by the general law and the date of limitation would be the starting point when the mistake or the error comes to light. But in making claims for refund before the departmental authority, an assessee is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed thereunder must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail.
30. In so far as the additional submissions made by both the sides are concerned, it is apparent that learned Advocate for the appellant has merely reiterated their earlier submissions except for taking an additional submission of claiming the payment of excess duty as being “under protest”. In so far as their reiterations of judgments are concerned, this has already been discussed in foregoing paras. As far as the issue of payment under protest is concerned, I do not find any ground or evidence on record to suggest that the payment was made under protest. It is a case where the payment made on 17.01.2020 is apparently under certain mistaken belief or fact that the original payment has not been credited to the Government account and therefore, the full amount was again paid. It is obvious from the perusal of the screenshot that it was not accepted on the ground that challan was rejected initially as the duty was short paid, which was made good on 17.01.2020. Thus, the first payment on 10.01.2020 as well as additional payment made subsequent thereto, on 17.01.2020 have all been made in the nature of customs duty only even though it may be an excess payment of duty than what was otherwise required to be paid. In view of the clear decision of the Hon’ble Supreme Court, it is now a settled position that except for unconstitutionality of the levy, the rest of the refunds are to be dealt with within the provisions of Customs Act only. It is also settled position that authorities working under the Customs Act cannot entertain a refund claim applying the general law of limitation. As far as the various case laws cited and the non-applicability of the judgment relied upon by the Commissioner (Appeals), I find that it has been fairly explained by the learned AR that all these judgments are either distinguishable on account of there being per incuriam or there being difference in the nature of duty paid viz., advance payment of duty either for export or import. Hence I do not find any substantive grounds in the claim of the learned Advocate that the Commissioner (Appeals) has wrongly relied on certain judgments. In so far as reliance on the case of Cummins Technologies Pvt Ltd (supra) by Commissioner (Appeals), the learned Advocate highlights that the limitation to make a claim in such case would be the general law of limitation as prescribed under The Limitation Act, 1963 and there are other distinguishable facts and hence its being not applicable does not in any way take away the submissions made by the learned AR, who has clearly relied on the majority decision of Hon’ble Supreme Court in the case of Mafatlal Industries Ltd (supra) and other judgments following majority decision.
31. To sum up, from the facts of the case and submissions made by both the sides, it is apparent that in this case there has been a mistake in making excess payment of Customs Duty, which is not being disputed by either sides, however, this excess payment, whether it is in the nature of duty or otherwise has been discussed in detail the foregoing paras and it is clear that in the given set of facts, it was in the nature of duty only and therefore, it would be required to be dealt with in accordance with the provisions under Section 27 of the Customs Act in view of various judgments cited in support of the submissions that refund of any amount under the Customs Act has to be dealt with in accordance with Section 27 only and not otherwise.
32. Thus, in the given factual matrix, respectfully following the various judgments cited by learned AR and especially the majority decision in the case of Mafatlal Industries Ltd (supra), the provisions of Section 27 will be applicable in full force. The claim was filed before the customs authority, who is a creature of statute and therefore, he is bound by the provisions of the Act itself while considering the claim for refund unlike the Hon’ble High Courts and Hon’ble Supreme Court, who have wider jurisdiction and power under Article 226 and Article 32 of the Constitution respectively. It is also no longer res integra that the Tribunal is a creature of statute, which has to function within the four walls of statute itself. Therefore, in the facts of the case, no fault can be found with the rejection of the refund claim, which has admittedly been filed beyond the limitation period under the relevant statute i.e., Customs Act, 1962 and therefore, there is no ground for interfering with the order of the Commissioner (Appeals).
33. Accordingly, Appeal dismissed.
(Pronounced in the Open Court on 13.11.2024)
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