The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Chennai held that the limitation period for filing a refund claim under Section 27(1B)(c) of the Customs Act, 1962 commences from the date of communication of the order finalising provisional assessment, not from the mere date of its passage. Upholding the appellate authority’s decision, the Tribunal dismissed the Revenue’s appeal and confirmed that the respondent’s refund claim was filed within time.
Background & Facts
The Dispute
The dispute centered on whether the refund claim filed by Tamilnadu Newsprint and Papers Ltd. (the Respondent) for excess duty paid on provisional assessment of imported non-coking coal was barred by limitation under Section 27(1B)(c) of the Customs Act, 1962. The Appellant, Commissioner of Customs (Preventive), contended that the claim was time-barred because it was filed more than one year after the date of the order finalising the provisional assessment.
Key Facts
- The Respondent imported non-coking coal under Bill of Entry No.3551653 dated 17 October 2013, which was assessed provisionally.
- On 30 April 2014, the Assistant Commissioner of Customs, Nagapattinam passed Order-in-Original No.35/2014, finalising the provisional assessment and ordering a refund of Rs.75,50,539/- being the excess duty paid.
- The Respondent filed a refund claim dated 13 May 2015, which was received by the Department on 15 May 2015.
- After a deficiency memo, the claim was resubmitted vide letter dated 4 June 2015 and received by the Department on 9 June 2015.
- The Department issued a Show Cause Notice on 6 July 2015, alleging that the claim was filed beyond the one-year limitation period computed from 30 April 2014.
- The Respondent replied on 16 July 2015, asserting that the Order-in-Original was received only on 10 June 2015 and that the limitation period should run from that date.
- The Adjudicating Authority, by Order No.37/2015 dated 2 September 2015, rejected the claim as time-barred, holding that limitation commenced from 30 April 2014.
- Aggrieved, the Respondent appealed to the Commissioner of Appeals (Appeals-II), Tiruchirappalli, which, by Order-in-Appeal No.91/16-TRY(CUS) dated 5 April 2016, set aside the adjudicating authority’s order, held that the limitation period runs from the date of communication of the order (found to be 10 June 2014) and directed the refund claim to be considered.
- The Appellant (Revenue) then filed the present appeal before the CESTAT Chennai.
Procedural History
- 17.10.2013: Bill of Entry No.3551653 filed for import of non-coking coal.
- 30.04.2014: Order-in-Original No.35/2014 passed, finalising provisional assessment and ordering refund of Rs.75,50,539/-.
- 13.05.2015: Refund claim dated filed by Respondent.
- 15.05.2015: Claim received by Department.
- 04.06.2015: Resubmission letter dated.
- 09.06.2015: Resubmission received by Department.
- 06.07.2015: Show Cause Notice issued by Department.
- 16.07.2015: Respondent’s reply to Show Cause Notice.
- 02.09.2015: Adjudicating Authority Order No.37/2015 rejecting claim as time-barred.
- 05.04.2016: Order-in-Appeal No.91/16-TRY(CUS) passed by Commissioner of Appeals (Appeals-II), Tiruchirappalli, setting aside the adjudicating authority’s order.
- 27.03.2026: Date of hearing before CESTAT Chennai.
- 11.09.2026: Date of decision/judgment.
Relief Sought
The Appellant sought to set aside the Order-in-Appeal No.91/16-TRY(CUS) dated 5 April 2016 and to uphold the Adjudicating Authority’s finding that the refund claim was barred by limitation. The Respondent sought to uphold the appellate authority’s order and to obtain the refund of Rs.75,50,539/- with any consequential reliefs.
The Legal Issue
The central question was whether the limitation period of one year prescribed under Section 27(1B)(c) of the Customs Act, 1962 for filing a refund claim in respect of duty paid provisionally under Section 18 commences from the date of passing of the order finalising the provisional assessment or from the date on which such order is communicated to the assessee. The Appellant argued for a literal reading that the period runs from the date of adjustment of duty (the date of the order), while the Respondent contended that, as a party aggrieved by the order, the limitation can begin only after the order has been served or communicated, in accordance with the principle that limitation for a remedy runs from knowledge of the order.
Arguments Presented
For the Appellant/Petitioner
The Appellant, represented by Ms. Annadalakshmi Ganeshram, contended that Section 27(1B)(c) expressly provides that the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof. It argued that the date of adjustment is the date of the order itself, because the Proper Officer appropriates the duty by the original order. Consequently, the limitation period commenced on 30 April 2014 and expired on 30 April 2015. The Appellant asserted that the statute does not require proof of communication or service of the order, and that the Appellate Authority erred in importing a requirement of “date of service” that is absent from the text. It relied on the absence of any evidence showing that the Department had dispatched the order by registered post, speed post or courier, and submitted that the Respondent’s production of a postal cover purporting to show receipt on 10 June 2014 was unverified and could pertain to other correspondence.
For the Respondent/State
The Respondent, represented by Shri R.R. Padmanabhan, supported the impugned order, arguing that the Appellate Authority correctly held that the limitation period runs from the date the order finalising the provisional assessment is communicated to the person entitled to the refund. It cited the decision of this Tribunal in Indian Oil Corporation Ltd. v. Commissioner of Customs (Export), New Delhi, 2014 (308) ELT 169 (Tri.-Del.), which held that the date of service of a public order on the person to whom it is meant is counted for remedial measures. The Respondent emphasized that a refund claim under Section 27 is a remedy available to the aggrieved party, and therefore the principle laid down in Collector of Central Excise, Madras v. M.M. Rubber & Co., 1991(55)ELT 289 (SC) applies: limitation for a person seeking a remedy runs from actual or constructive knowledge of the order. It pointed out that the Department had not adduced any evidence of dispatch or delivery of the Order-in-Original, whereas the Respondent had produced a postal cover bearing the seal and stamp of the postal department establishing receipt on 10 June 2014. Accordingly, the burden of proving communication lay on the Revenue, which had not discharged it, and the claim filed on 13 May 2015 and resubmitted on 4 June 2015 was well within the limitation period computed from 10 June 2014.
The Court's Analysis
The Tribunal began by noting that the core dispute was confined to the question of limitation under Section 27(1B)(c) of the Customs Act, 1962. It observed that the Adjudicating Authority had read the provision literally and reckoned the year from 30 April 2014, the date the order was passed. The first appellate authority, relying on the decision of this Tribunal in Indian Oil Corporation Ltd. v. Commissioner of Customs (Export), New Delhi, 2014 (308) ELT 169 (Tri.-Del.), held that the year could run only from the date the order was actually communicated to the Respondent, found on facts to be 10 June 2014, and not from the date the order was signed.
The Tribunal then examined the statutory language. Section 27(1B)(c) provides that where duty is paid provisionally under Section 18, the limitation of one year “shall be computed from the date of adjustment of duty after the final assessment thereof or in case of reassessment, from the date of such re-assessment”. It noted that the provision does not, in express terms, employ the word “communicated”. However, the Tribunal drew a distinction between two types of limitation periods: (i) limitation prescribed for a statutory authority to exercise a power of its own motion, where the period runs from the date the order is made because the authority cannot plead ignorance of its own act; and (ii) limitation prescribed for a person aggrieved to invoke a remedy against an order, where actual or constructive knowledge of the order is an essential element without which the order cannot be said to have become binding on him and the limitation cannot be said to have commenced. This distinction was elucidated in Collector of Central Excise, Madras v. M.M. Rubber & Co., 1991(55)ELT 289 (SC).
The Tribunal held that a refund claim under Section 27 is unmistakably of the latter kind. The Respondent is not the author of the order finalising the provisional assessment but the party aggrieved by the excess duty locked up in it, and it would be incongruous to hold that a period within which it must act begins to run before such an order is communicated to it. Consequently, the very view taken by this Tribunal in Indian Oil Corporation Ltd. v. Commissioner of Customs (Export), New Delhi, 2014 (308) ELT 169 (Tri.-Del.) - that the date on which a public order is served on the person to whom that is meant, such date of service is counted for remedial measure if the person on whom the order served is aggrieved - is applicable here.
The Tribunal revisited the question on facts strikingly similar in GAIL (India) Ltd. v. Commissioner of Customs, Ahmedabad, (2024) 20 Centax 515 (Tri.-Ahmd.), where it was held, following Indian Oil Corporation Ltd. and other decisions, that the date of service of the finalisation of provisional assessment is the relevant date for filing a refund claim under Section 27(1B)(c). The Revenue carried the matter to the Hon’ble Gujarat High Court, which framed the very question that addressed the essence of the dispute before us: “Whether the CESTAT is right in holding that ‘date of service’ of finalisation of provisional assessment is the relevant date for computation of period of limitation for filing refund claim when Section 27(1B)(c) of the Customs Act, 1962 provides the date of adjustment of duty after the final assessment or date of re-assessment, as the relevant date for computation of period of limitation?”. In Principal Commissioner of Customs, Ahmedabad v. GAIL (India) Ltd., (2024) 20 Centax 516 (Guj.), the High Court answered it against Revenue, holding that communication of the order of finalisation to the assessee “is a condition sine qua non to file the refund claim within one year as per Section 27(1B)(c) from the date of finalization”, and that mere uploading of the assessment order on the Department’s portal, without more, does not satisfy that requirement. The appeal of Revenue was dismissed.
In the absence of any decision of the Hon’ble jurisdictional High Court or of this Tribunal taking a contrary view, the Tribunal found no warrant for departing from the ratio of GAIL (India) Ltd. (Guj.), which is in consonance with the general principle laid down in M.M. Rubber & Co. It accordingly held that the limitation of one year under Section 27(1B)(c), for a refund of duty paid provisionally under Section 18, runs from the date the order finalising the assessment is communicated to the person entitled to the refund and not from the bare date on which it is passed. The Tribunal further emphasized that the order must in fact be shown to have been communicated, and not merely dispatched, noting that Section 153 of the Act, both as it stood at the relevant time and after substitution by Finance Act 2018, requires an order to be tendered directly or sent by registered or speed post or by courier with acknowledgement due, and permits recourse to affixation on the notice board only where service in that manner is not possible. The Larger Bench of this Tribunal, construing Section 153 alongside Section 37C of the Central Excise Act, 1944, held in Margra Industries Ltd. v. Commissioner of Customs, New Delhi, 2006 (202) ELT 244 (Tri.-LB) that despatch of an order by post without proof of its delivery is not sufficient compliance, that no presumption of service under the General Clauses Act, 1897 is available where the special Act itself prescribes the mode of service, and that an assessee’s right to agitate a matter cannot be defeated by such a presumption. The Hon’ble Madras High Court, in Schiller Healthcare India Pvt. Ltd. v. Assistant Commissioner of Customs, 2021-TIOL-1357-HC-MAD-CUS, likewise held that the indirect modes of service in Section 153(1)(d) and (e) can be resorted to only after service by the direct modes in clauses (a) to (c) has been attempted and has failed, and set aside an order where the Department could not produce an acknowledgement of the registered dispatch it relied upon.
Turning to the facts, the Tribunal found it undisputed, and the Appellant’s Authorized Representative was unable to point to anything on record to the contrary, that Revenue has produced no evidence of having dispatched Order-in-Original No.35/2014 to the Respondent by registered post, speed post or any other mode contemplated under Section 153, let alone evidence of its delivery that it was delivered on a date other than 10 June 2014. The Respondent, on the other hand, produced before the first appellate authority the postal cover bearing the seal and stamp of the postal department, establishing receipt on 10 June 2014. The burden of proving communication lay squarely on the Department, and Revenue not having discharged it even at the threshold of showing despatch, the finding of the first appellate authority that the order came to the Respondent’s knowledge only on 10 June 2014 cannot be faulted. The submission that the cover produced may have contained some other correspondence remained a bare surmise, unsupported by any evidence of what else, if anything, the Department sent to the Respondent around that date, and it could not be permitted to unsettle a finding of fact resting on unrebutted documentary proof.
Reckoned from 10 June 2014, the period of one year under Section 27(1B)(c) expired on 10 June 2015. The refund claim, dated 13 May 2015 and received in the department on 15 May 2015, was thus filed well within time. Even the resubmission made on 4 June 2015 to cure the deficiency pointed out by the Department, received on 9 June 2015, falls within the same period. It follows that the refund claim cannot be treated as barred by limitation on any view of the date of its filing, once the relevant date is correctly taken as the date of communication of the order finalising the provisional assessment.
For the foregoing reasons, the Tribunal found no error in the view taken by the learned Commissioner (Appeals) that the refund claim was not time-barred. The impugned order calls for no interference.
The Verdict
The Appeal filed by the Commissioner of Customs (Preventive) is dismissed and the Order-in-Appeal No.91/16-TRY(CUS) dated 5 April 2016 is upheld. The refund claim of Rs.75,50,539/- filed by Tamilnadu Newsprint and Papers Ltd. is held to be within the limitation period under Section 27(1B)(c) of the Customs Act, 1962, computed from 10 June 2014, and therefore not time-barred. The Tribunal confirms that the Respondent is entitled to the refund of the excess duty, with any consequential reliefs in law, if any.
What This Means For Similar Cases
Limitation Runs from Communication, Not Mere Passage
For refund claims under Section 27(1B)(c) of the Customs Act, 1962, the limitation period commences from the date the order finalising provisional assessment is communicated to the assessee, not from the mere date of the order’s passage. Practitioners must look beyond the date on the order and ascertain when the assessee actually received or had knowledge of the order.
Burden of Proof on Revenue
The burden to prove communication of the order lies squarely on the Department. Mere despatch by post, speed post or courier without proof of delivery or acknowledgement is insufficient. An assessee’s production of documentary evidence of receipt (e.g., postal cover, courier receipt) shifts the onus to the Revenue to disprove such receipt.
Section 153 Compliance Essential
Strict compliance with the mode of service prescribed under Section 153 of the Customs Act, 1962 is required to sustain a limitation defence. Orders must be tendered directly or sent by registered post, speed post or courier with acknowledgement due. Reliance on notice-board affixation is permissible only where direct modes are not possible, and even then, the Department must show that direct modes were attempted and failed.
- Ensure that limitation defences are backed by proof of actual communication, not just the date of the order.
- When challenging a limitation plea, obtain and produce any postal acknowledgements, courier tracking, or receipts showing the date of receipt.
- Remember that the burden of proof is on the Revenue; assessees can rely on unrebutted documentary evidence of receipt to defeat a time-bar claim.
