1983 (1) TMI 276 - AT - Customs

Summary

Issues Involved:
1. Limitation for filing a refund claim under Section 27(1) of the Customs Act, 1962.
2. Right of the Respondent to file cross-objections.
3. Applicability of Section 72 of the Indian Contract Act, 1872, for refund claims.
4. Notification of reduced duty rates and its applicability.

Detailed Analysis:

1. Limitation for Filing a Refund Claim under Section 27(1) of the Customs Act, 1962:

The core issue addressed is whether the refund claim filed by the appellants was time-barred under Section 27(1) of the Customs Act, 1962. The appellants argued that the delay was due to an audit objection and subsequent less charge demand, which was withdrawn on 18-11-1978. They contended that this delay was beyond their control and thus should not be held against them. However, the Tribunal found that the limitation period for filing a refund claim starts from the date of payment of duty, not from the date of resolution of any audit objections or less charge demands. The Tribunal noted that the appellants did not pay the duty under protest, which could have exempted them from the limitation period. Citing precedents, including the Supreme Court's ruling in Madras Rubber Factory v. Union of India, the Tribunal held that the refund claim was indeed time-barred and rejected the appeal.

2. Right of the Respondent to File Cross-Objections:

The Tribunal examined whether the Respondent Collector of Customs had the right to file cross-objections in the appeal. The Tribunal referred to sub-section (2) of Section 131-B of the Customs Act, which states that proceedings pending before the Central Government shall be transferred to the Appellate Tribunal and treated as if they were appeals. The Tribunal clarified that this does not convert a revision application into an appeal for all purposes; it retains the character of a revision application. Since the Respondent had no right of appeal against the order of the Appellate Collector of Customs, they could not file cross-objections. The Tribunal rejected the Respondent's prayer for time to file cross-objections, noting that the right of cross-objection arises only when a party had the right to appeal but did not exercise it.

3. Applicability of Section 72 of the Indian Contract Act, 1872, for Refund Claims:

The appellants argued that the limitation for refund claims should be governed by Section 72 of the Indian Contract Act, which provides a three-year period for claims of money paid under a mistake. They cited judgments from the Supreme Court and the Bombay High Court to support their argument that the government cannot refuse to refund an illegally collected tax on the technical ground of time bar. However, the Tribunal held that it is bound by the statutory limitation set out in Section 27(1) of the Customs Act and cannot disregard it. The Tribunal emphasized that while higher courts might exercise their writ jurisdiction to order refunds beyond the statutory limitation, the Tribunal, as a statutory body, must operate within the confines of the law.

4. Notification of Reduced Duty Rates and Its Applicability:

The appellants contended that the duty payable on the date the Bill of Entry was filed (17-10-1977) should be at the reduced rates as per Notification No. 214-Customs dated 15-10-1977. The Tribunal acknowledged this contention but did not delve into its merits, as the primary issue of limitation rendered the appeal untenable. The Tribunal noted that the Appellate Collector of Customs had rejected the appeal both on limitation and merits, but since the limitation issue was decisive, it was unnecessary to address the applicability of the reduced duty rates.

Conclusion:

The Tribunal dismissed the appeal, confirming the order of the Appellate Collector of Customs. The refund claim was held to be barred by limitation under Section 27(1) of the Customs Act, and the Respondent had no right to file cross-objections. The Tribunal emphasized its obligation to adhere to statutory limitations and rejected the argument for applying Section 72 of the Indian Contract Act for extending the limitation period.