Whether the question of limitation arises when application filed after a long time for persuasion of sanctioned refund claim?
Facts & background:
In the instant case, SPIC Ltd. (“the Assessee”) filed two refund applications dated October 26, 1990 and April 2, 1991 (“First Application”) seeking refund of excess duty paid which were dismissed by the Original Authority. Being aggrieved, the Assessee preferred an appeals before the Commissioner (Appeals), which were allowed in favour of the Assessee, sanctioning the refunds vide Orders dated June 14, 1993 and October 30, 1996.
Thereafter, at the behest of the Department, the Assessee again filed two separate refund applications both dated August 14, 2000 (“Second Application”) which were rejected by the Original Authority stating that Second Application have been filed belatedly. On appeals being filed before the Commissioner (Appeals), the Commissioner (Appeals) confirmed the rejection of the refund claim filed.
Thereafter, the Hon’ble Tribunal decided the matter in favour of the Assessee, against which the Revenue preferred an appeal before the Hon’ble High Court of Madras on the ground that the Order of the Tribunal allowing the refund claim of the Assessee after the expiry of seven years is contrary to the time limit fixed by Section 27(1) of the Customs Act, 1962 (“the Customs Act”).
The Hon’ble High Court of Madras relying upon the decision of the Apex Court in the case of Mafatlal Industries Ltd. Vs. Union of India [1997 (89) E.L.T. 247 (S.C.)] held that when there is no provision for filing a Second Application, the question of limitation does not arise. Further, the time limit under Section 27(1) of the Customs Act is for the First Application and the appeal is a continuation of the original proceedings and therefore there can be no limitation in respect of the proceedings pursuing the refund claim. Accordingly, the Order of the Hon’ble Tribunal was upheld and the matter was decided in favour of the Assessee.