Customs – Cestat Chennai: Limitation period of one year for filing refund would apply from the date of adjustment of duty after the final assessment thereof – As Revenue has not passed the final assessment order as yet, hence they have erred in rejecting the refund claim of imported goods destructed due to expiry of shelf life – Appeal allowed [Order attached]
Order Date – 30 January 2023
Parties: M/s. DSM Nutritional Products India Private Limited Vs The Commissioner of Customs
- The Appellant, M/s. DSM Nutritional Products India Private Limited, imported Vitamin Premixes from its parent company. It was found that the label on the goods indicated that the shelf life of the same had already expired and that therefore No-Objection was not given by the FSSAI. The request for re-export was rejected and ordered for destruction of the goods in question.
- The refund claim for customs duty paid was also rejected as “untenable” for the reasons, inter alia, that the refund application was filed beyond the specified time limit of one year as per Section 27 of the Customs Act, 1962; that the claim of the appellant was hit by Section 26A (3) ibid. and that the appellant did not comply with the Deficiency Memo issued by it.
- Whether the rejection of refund claim of the appellant is in order?
- The Tribunal held that the scope of sub-section (3) of section 27 is limited to the cumulative conditions under (a) to (d) of Section 26A (1) ibid. and the refund claim of any duty that has been paid could be entertained provided the said goods are cleared for home consumption. By ordering destruction, the imported goods in question could never be cleared for home consumption and consequently, the provisions of Section 26A ibid. would not apply.
- Section 27 also prescribes a time-limit of one year, but the same is subject to the saving proviso provided under sub-section (1B). In terms of clause (c) to sub-section (1B) of Section 27 ibid., the limitation (of one year), if at all, would apply from the date of adjustment of duty after the final assessment thereof. The Revenue authorities have not passed the final assessment order as yet.
- Thus, it was held that the authorities below have erred in rejecting the refund claim, in a haste, even before a final assessment could be made as required under law. Hence, the same is set aside and the appeal is allowed with consequential benefits.