When Voluntary Payment During Investigation Bars Refund

The Madras High Court, in Virbac Animal Health India Pvt. Ltd. v. Union of India, held that customs duty voluntarily paid during a DRI investigation cannot later be reclaimed as a refund when the importer itself requested closure of the investigation after making the payment. 

The Court ruled that such payment cannot be treated as payment under protest unless a clear reservation of rights is recorded at the time of payment. 

It further applied the doctrine of estoppel by conduct, observing that once a taxpayer induces the authorities to close an investigation on the basis of voluntary payment, the dispute cannot be reopened through a refund claim. 

Additionally, refund under Section 27 of the Customs Act requires proof that the burden of duty has not been passed on to any other person, which the petitioner failed to establish. 

Consequently, the refund claim was rejected and the writ petition was dismissed.