DAY 11 │ REFUND HANDBOOK —SECTION 27, CUSTOMS ACT 1962

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1 │ Statutory Bedrock

Provision	What it says	Key points for practice
Section 27(1)	Any person who has paid duty, interest or penalty may claim a refund within 1 year (2 yrs for SEZ supplies) from the “relevant date.”	“Relevant date” shifts with context: original payment date → reassessment order date; in provisional-duty cases the final assessment order starts the clock (SC ► ITC Ltd, 2019).
Proviso to Section 27(1)	Limitation is waived if duty was paid under protest.	Simple endorsement “under protest” on BoE or covering letter suffices (CESTAT ► Bombay Dyeing, 2014).
Section 27(2)	Department must satisfy itself that incidence has not been passed on (unjust enrichment).	Rebuttable presumption: importer must produce documentary proof.
Section 27A	Interest @ 6 % p.a. if refund is not paid within 3 months of a complete claim.	Interest starts after the 3-month window, not from sanction order (SC ► Ranbaxy Labs, 2011).

2 │ Refund Triggers & “Relevant Date” Matrix

Scenario	Relevant date (limitation)	Typical evidence
Duty dropped in adjudication or appeal	Date of final order (if duty not under protest)	Certified order + TR-6 challans
*Provisional duty* reduced (Section 18)	Date of final assessment order	Final assessment BoE, test report
Retrospective exemption notification	Date of notification unless stated otherwise	GSR copy + BoE + challans
Double payment / EDI glitch	Date of excess payment	Bank challan, ICES log
Duty paid under protest	Limitation waived	Protest letter on record
Unconstitutional levy quashed by HC/SC	Date of court order	Judgment copy + TR-6

3 │ Unjust Enrichment — Documentary Defence Ladder

Level of proof	Acceptability	Guiding case law
1. Chartered-Accountant certificate confirming duty booked as receivable	Sufficient when corroborated by ledgers	SC ► Philips India (2020)
2. Ledger extract showing “Duty-Rebate Receivable” under current assets	Strong	Delhi HC ► Religare (2021)
3. Credit-note trail to customers reversing duty component	Conclusive	CESTAT ► ACC Ltd (2022)
4. Cost-auditor report (CAS-4)	Optional but persuasive	CBIC Cir 17/2008- Cus.
5. Affidavit alone	Usually insufficient	SC ► Solar Pesticides (2000)

Tip: Attach at least Levels 1 & 2 with every refund to pre-empt a show-cause on unjust enrichment.

4 │ Step-by-Step Refund Workflow

(screens refer to ICES/ICEGATE modules)

Day	Action	Officer / Screen
0	File Electronic Form RFD-01 (BoE auto-populated).	Importer — CMAREF
1	Upload supporting PDFs (order, CA cert., ledgers).	DOC-UPLOAD
≤ 30	Respond to any Query Memo (digitally served).	QUEANS
≤ 90	Sanction Order issued (AC/DC) — system queues e-scroll.	REFSAN
+2-5	PFMS NEFT hits importer bank; e-scroll viewable.	FISLST
> 90	Interest @ 6 % auto-computed in scroll line.	System adds line item

If scroll fails (e.g., wrong IFSC) file ticket “REF-NEFT-FAIL” with cancelled cheque.

5 │ Detailed Form Checklist

Field	Common error	How to avoid
BoE number & date	Mismatch of manual and EDI BoE	Copy directly from ICES home page
“Date of payment”	Entering challan date, not bank realisation date	Use TR-6 time-stamp
Duty element (BCD, SWS, IGST)	Forgetting CVD/SAD for old BoEs	Cross-verify duty ledger (DTY view)
Grounds for claim	Blank / generic	Quote specific clause: e.g., “Remission on final assessment under Section 18(5) order No … dated…”
Documentary index	Not uploaded in sequence	Merge into one bookmarked PDF; index in covering letter

6 │ Expanded Case-Law Digest (with ratios)

#	Case	Court & Year	Ratio decidendi (full sentence)
1	Mafatlal Industries Ltd	SC 1997	All refund claims—except those for unconstitutional levies—must follow Section 27 procedure and face unjust-enrichment bar.
2	Solar Pesticides Pvt Ltd	SC 2000	The burden to prove non-passing of duty lies on the claimant; mere assertion is inadequate.
3	Ranbaxy Laboratories Ltd	SC 2011	Statutory interest under Section 27A accrues after the three month period, irrespective of departmental delays
4	Philips India Ltd	SC 2020	CA certificate plus ledgers discharges the burden of unjust enrichment; department cannot demand invoice-wise tracing.
5	ITC Ltd	SC 2019	For provisional assessments, the “relevant date” for limitation is the date of final assessment order.
6	Hindustan Zinc Ltd	Raj HC 2018	Excess duty paid under provisional assessment must be refunded within a reasonable time; prolonged delay violates Article 14.
7	Flemingo Duty Free Shop	Bom HC 2017	Once duty demand is set aside on appeal, department must refund without insisting on a fresh Section 27 form.
8	Reliance Industries Ltd	Del HC 2022	Writ can be issued to compel system-driven IGST refunds where EDI glitches occur.
9	Birla Tyres Ltd	CESTAT 2021	Interest on refund after provisional assessment runs from original duty payment date, not finalisation date.
10	Dynaflex Pvt Ltd	Del HC 2024	High Court directed IGST refund with 9 % interest under writ jurisdiction for inordinate delay.

7 │ Worked Numerical Example

Facts: Provisional duty ₹12 crore paid on 15 Jan 2025. Final assessment (10 Sept 2025) lowers duty to ₹8 crore.

Item	Amount	Calculation
Duty refundable	₹4 crore	12 – 8
Interest period	15 Jan 2025 → 10 Dec 2025 (= 329 days)	Includes 90-day statutory window
Interest @ 6 %	₹4 crore × 6 % × 329 / 365 ≈ ₹21.6 lakh	Added to scroll

8 │ Ten Field-Tested Tips

File “under protest” on contentious BoEs to bypass limitation.
Use a single, bookmarked PDF for all evidence—reduces ICES queries.
Download e-scroll weekly; if missing, raise ICES ticket within 15 days.
Maintain “Refund Docket”—hard file & cloud—for five years.
Track 90-day interest trigger; send gentle reminder to AC on Day 80.
For IGST errors: use SB-REFUND module rather than Section 27 form.
Cross-tag refund claim number in corporate ERP to catch bank credits.
Escalate to Principal Commissioner (Board Inst 03/2023) when refund > ₹50 lakh pending > 90 days.

Feedback /suggestions welcome at CA Navjot Singh | navjot.singh@taxtru.in | +91 9953357935

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Disclaimer

The information shared in this post (and throughout the 30-Day Customs Series) is provided solely for general, educational purposes. It is not intended to be—and should not be relied on as—legal advice or a substitute for professional guidance tailored to your specific facts and jurisdiction.

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About the Author & Office Locations

CA Navjot Singh is a seasoned indirect-tax specialist with deep expertise in Customs, Foreign Trade Policy and GST. He delivers strategic advisory and hands-on execution to conglomerates, Fortune 500 companies and high-growth enterprises.

Key architect of long-term retainership models that pre-empt audit objections and mitigate litigation risk.
Designs India-wide GST frameworks that optimise tax and cash-flow while dovetailing cross-border VAT regimes (EU VAT, GCC VAT).
Advises clients through assessment proceedings, prepares robust submissions and representations, and drafts precise replies to show-cause notices, audit objections and spot memos.
Represents taxpayers before adjudicating authorities, the Tribunal, the Sales-Tax Revisionary Board and the West Bengal Taxation Tribunal.
Conducts comprehensive GST-impact assessments, incentive-scheme evaluations and cash-flow modelling; recommends mitigation strategies as benefits phase out.
Prepares advance-ruling applications and engages with GST-Council committees to shape interpretative guidance.
Develops end-to-end dispute-resolution roadmaps, from pre-litigation negotiation to appellate and judicial forums.

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