The Madras High Court has set aside an order denying refund of customs duty under Notification No. 102/2007-Cus, holding that the petitioner was entitled to relief since the refund claim was filed within the limitation period prescribed under Section 27(1) of the Customs Act.
A Single Judge Bench of Justice C. Saravanan observed that the petitioner, who had imported components for setting up a wind energy park, had borne the incidence of customs duty and was therefore eligible for refund. The Court emphasized that since the customs duty had been paid at the time of import, the claim filed within one year was well within the prescribed period.
The Bench noted that the petitioner had originally filed refund claims in time, which were initially rejected by the original and first appellate authorities. However, the CESTAT remanded the matter, following which the original authority sanctioned the refund of approximately ₹7 crores, being the Special Additional Duty (SAD) paid under the Customs Tariff Act, 1975. The Department, however, subsequently reviewed the order under Section 129D(2) of the Customs Act and denied the refund.
The Court rejected the Department’s reliance on Section 27(1B)(b) of the Act, clarifying that the limitation of one year, when refund arises from an appellate order, should be computed from the date of such order. Since the claims had been originally filed within time, the petitioner could not be faulted for not filing fresh refund applications.
Accordingly, the Court quashed the Department’s order and allowed the petition in favour of the taxpayer.
Appearances:
Advocate G Natarajan, for the Petitioner
Advocate R. Nandha Kumar, for the Respondent
