Calcutta High Court
Commissioner Of Customs (Preventive) vs M/S. Raymond Apparel Limited on 2 August, 2025
Author: T.S. Sivagnanam
Bench: T.S Sivagnanam
OD-10
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION [CUSTOMS]
ORIGINAL SIDE
CUSTA/2/2025
IA NO: GA/1/2025
COMMISSIONER OF CUSTOMS (PREVENTIVE), KOLKATA
VS
M/S. RAYMOND APPAREL LIMITED
BEFORE :
THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM
AND
HON'BLE JUSTICE CHAITALI CHATTERJEE (DAS)
DATE : 2nd August, 2025
Mr. Uday Sankar Bhattacharya, Adv.
Mr. Tapan Bhanja, Adv.
...for appellant.
Mr. Rahul Tangri, Adv.
Mr. Shovit Betal, Adv.
...for respondent.
The Court : This appeal filed by the department/revenue is directed
against an order dated 2.5.2024 passed by the Customs, Excise and Service
Tax Appellate Tribunal, East Zonal Bench, Kolkata in Customs Appeal
No.75200/2023.
The revenue has raised the following substantial questions of law for
consideration :
“a) Whether the refund application was required to be made within one
year from the judgment and order of the Hon’ble Supreme Court of
India in the case of M/s. SRF Vs. Commissioner of Customs Chennai
2as per provision of sub-section 1B(b) of section 27 of the Customs
Act, 1962?
b) Whether the refund application dated 06.02.2018 filed by the
respondent is time barred and liable to be rejected?
c) Whether the impugned order dated 02.05.2024 passed by the
Learned Tribunal is contrary to the provision of section 27 of the
Customs Act, 1962 and also not sustainable in view of the Circular
No.24/2004-Cus. Dated 18/03/2024 and the judgment and order of
the Hon’ble Supreme Court of India passed in the case of ITC Ltd.
Vs. CCE, Kolkata – IV?”
The revenue is aggrieved by the order passed by the learned Tribunal
dismissing their appeal challenging the Order-in-original dated 16.6.2022
passed by the Commissioner (Appeals), Kolkata. By the said order the appellate
authority held that duty paid under protest tantamounts 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, the appellate authority held that
the department has not disputed that duty has been paid under protest by the
respondent for all 174 bills of entry and no infirmity can 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 Surpeme Court in ITC Ltd. Accordingly, the appellate authority
affirmed the Order-in-original dated 24.5.2021, by which the original authority
3sanctioned refund amounting to Rs.7,98,08,012/- paid against 174 bills of
entry under section 27 of the Customs Act, 1962.
The contention raised by the department before the learned Tribunal as
well as before us is that the ratio of the decision of the Hon’ble Supreme Court
in the case of ITC Ltd. is clear that unless the assessment order is not modified
as per law, the refund claim under section 27 does not arise, that is, the refund
proceedings cannot be used as a substitute for appeal proceedings and the
effect of `under protest’ is only in the context that the time limit under section
27 would not apply. Further, it was contended that the very protest made by
the respondent came to an end after the decision of the Hon’ble Surepme Court
in SRF Ltd. Vs. Commissioner of Customs, Chennai, 2015 (318) ELT 607 (SC)
and the protest made by the respondent would not survive beyond the date of
judgment of the Supreme Court dated 26.3.2015.
The learned Tribunal considered the said contention raised by the
revenue and rejected the same after taking note of the decision of the co-
ordinate Bench of the learned Tribunal. Identical issue came up for
consideration in the case of Kisan Cooperative Sugar Factory Ltd. Vs.
Commissioner of Central (2018) 8 GSTL 365 (All.). In the said case the assessee
filed refund application after four years in the year 2009 and the same was
rejected invoking the provisions of section 11B of the Central Excise Act, 1944.
In the said case though the Tribunal found that the assessee therein had made
the deposit of the disputed demand of duty amount under protest rejected the
refund application on the ground of limitation because, according to the
4Tribunal, the assessee therein made the refund application belatedly after
expiry of one year from the date of the judgment of the Court. The Court took
into consideration of the decision of the Hon’ble Supreme Court in Mafatlal
Industries Ltd. Vs. Union of India, 1997 (89) ELT 247 (SC) and held that in view
of the specific finding recorded that duty amount has been paid under protest,
limitation of one year to make the claim of refund under section 11B would not
apply at all to such a case and, therefore, the amount is liable to be refunded
to the appellant therein along with interest excluding the period for which the
appellant therein had not applied, that is, upto 2009 from the date it became
liable to be refunded. Direction was issued to the effect that the principal
amount is to be refunded but no interest be given from the date the writ
petition was allowed to the date when the appellant therein made the
application for refund, that is, 2009 and the interest beyond that time may be
given.
There are other decisions of the Tribunal on the very issue holding that
the assessee paying duty under protest and intimating to the Assistant
commissioner by letter that since it required consignment urgently for its
product it would be clearing payment of duty under protest and such protest
alleged by the assessee would remain till the disputed issue was settled finally
by higher appellate forums and in the absence of any order indicating vacating
of protest on an adverse order having been passed against the assessee, duty
having been paid under protest would not be hit by limitation prescribed under
section 27 of the Customs Act. Furthermore, in Sinkhal Synthetics & Chemicals
5Ltd. Vs. CCE, Aurangabad, 2002 (143) ELT 17 it was held that the refund of
duty paid under protest will not be hit by the bar of unjust enrichment. The
third Principal Bench of the Tribunal in the case of Collector of C. Ex Vs.
Prestige Engineering (India) Pvt. Ltd., 1989 (41) ELT 530 (Tribunal) held that
once a protest has been lodged, it became the duty of the Assistant Collector to
dispose of the protest by an appealable order so that the assessee could go in
appeal against those orders. Unless the Assistant Collector disposes of the
protest in the aforesaid manner, as enjoined under Rule 233B, the protest
cannot be deemed to have subsided.
The co-ordinate Bench of the Tribunal in the case of Commissioner of
Commissioner of Customs, Tuticorin vs. Sakthi Sugars Ltd., 2020 (372) ELT 577
(Tri. – Chennai) held that the marking of protest itself gives information to the
department that there is no requirement for reassessment. The assessment
under Section 17 of the Customs Act, 1962 cannot be said to be finalised when
the respondent therein has marked the protest while paying duty. It was
further held that mark of protest is an information to the department that the
assessee is not making payment of cess/duty voluntarily and then department
has to initiate proceedings to vacate the protest and pass speaking order of
reassessment. Similar view was taken by the co-ordinate Bench of the Tribunal
in HDFC Bank Ltd. Vs Principal Commissioner of GST & CE, 2020 (7) TMI 362 –
CESTAT Chennai.
The learned senior standing counsel appearing for the appellant
would contend that even assuming the refund is to be sanctioned, interest is
6not payable. We had noted that in the case of Kisan Coopertive Sugar Factory
Ltd., the Court denied interest for the period of delay that is, from the date on
which the writ petition filed by the assessee therein was allowed till filing of the
application for refund.
In the instant case, the respondent has not claimed interest from
the initial date but they have claimed interest only after expiry of the period of
90 days from the date on which the application for refund was granted.
Therefore, the said objection raised by the revenue would not arise in the
instant case.
For all the above reasons, we find that the learned Tribunal was
fully justified in dismissing the revenue’s appeal.
For the above reasons, the appeal is dismissed and the substantial
questions of law are answered against the revenue.
The revenue is directed to effect refund in favour of the respondent
together with interest as ordered within a period of three days from the date of
receipt of the server copy of this order.
(T.S. SIVAGNANAM, CJ. )
(CHAITALI CHATTERJEE (DAS), J.)
SN/S.Das/Pkd/SM.
AR[CR]