Limitation for provisional-assessment refunds begins upon communication of the finalisation order, not its passing.

The Respondent imported non-coking coal under Bill of Entry No. 3551653 dated 17 October 2013. The assessment was initially provisional under Section 18 of the Customs Act, 1962, pending production of original documents and a test report. Upon production of the requisite documents, the assessment was finalised by Order-in-Original No. 35/2014 dated 30 April 2014, resulting in a refund of ₹75,50,539 towards excess duty paid provisionally.

The Respondent filed a refund claim dated 13 May 2015, received by the Department on 15 May 2015. After the claim was returned under a deficiency memo, it was resubmitted on 4 June 2015 and received on 9 June 2015. The Department rejected the claim as time-barred, treating 30 April 2014—the date of the finalisation order—as the date from which the one-year limitation period under Section 27(1B)(c) commenced.

The Commissioner (Appeals) set aside the rejection, holding that limitation commenced from the date on which the finalisation order was communicated to the Respondent. The Respondent produced the postal cover showing receipt on 10 June 2014, while the Department produced no evidence establishing an earlier or otherwise valid service of the order. The Revenue appealed to the Tribunal.

Whether the one-year limitation period under Section 27(1B)(c) of the Customs Act, 1962, for claiming refund of duty paid provisionally under Section 18, commences from the date of the finalisation order or from the date on which that order is communicated to the claimant?

Whether the Department was required to prove valid communication or service of the finalisation order in accordance with Section 153 of the Customs Act, and whether the Respondent’s refund claim was filed within limitation on the facts?

Section 27(1B)(c) of the Customs Act, 1962 provides that, where duty has been paid provisionally under Section 18, the one-year limitation period for refund is computed from the date of adjustment of duty after final assessment or, in the case of reassessment, from the date of reassessment.

The Tribunal applied the principle in Collector of Central Excise, Madras v. M.M. Rubber & Co., 1991 (55) E.L.T. 289 (S.C.), that limitation for a person seeking a remedy cannot ordinarily run before the relevant order is communicated to him.

It followed Indian Oil Corporation Ltd. v. Commissioner of Customs (Export), New Delhi, 2014 (308) E.L.T. 169 (Tri.-Del.) and GAIL (India) Ltd. v. Commissioner of Customs, Ahmedabad, (2024) 20 Centax 515 (Tri.-Ahmd.), affirmed in Principal Commissioner of Customs, Ahmedabad v. GAIL (India) Ltd., (2024) 20 Centax 516 (Guj.), holding that the date of service or communication of the finalisation order is the relevant date for limitation under Section 27(1B)(c).

Section 153 requires statutory orders to be served through the prescribed modes, and Margra Industries Ltd. v. Commissioner of Customs, New Delhi, 2006 (202) E.L.T. 244 (Tri.-LB), Schiller Healthcare India Pvt. Ltd. v. Assistant Commissioner of Customs, 2021-TIOL-1357-HC-MAD-CUS, and related authorities establish that mere dispatch, without proof of delivery or valid service, is insufficient.

The Tribunal held that the expression “date of adjustment of duty” in Section 27(1B)(c) could not be applied mechanically as the date on which the finalisation order was signed. Since the refund remedy became available to the Respondent only upon communication of the order finalising the provisional assessment, limitation could not begin before that communication.

The Department bore the burden of proving valid service under Section 153. It failed to produce evidence that the order had been dispatched or delivered through any prescribed mode before 10 June 2014. Conversely, the Respondent produced the postal cover bearing the postal authority’s seal and stamp, establishing receipt on 10 June 2014.

Accordingly, the one-year period expired on 10 June 2015. Both the original claim, received on 15 May 2015, and the resubmitted claim, received on 9 June 2015, were therefore within limitation.

As the Respondent received the order on 10 June 2014 and filed its refund claim within one year thereafter, the claim was not time-barred.

The Revenue’s appeal was dismissed, the Commissioner (Appeals)’s order was upheld, and consequential reliefs, if any, were granted in accordance with law.