1984 (2) TMI 325 - AT - Customs

Summary

Issues Involved:

1. Validity of the refund claim based on Notification No. 115/73.
2. Validity of the refund claim based on ad hoc exemption Order No. 404 dated 29-9-1975.
3. Retrospective effect of the ad hoc exemption notification.
4. Application of Section 25(2) of the Customs Act, 1962.
5. Rejection of the refund claim by the Appellate Collector on the grounds of time-bar and shift in claim.

Issue-wise Detailed Analysis:

1. Validity of the refund claim based on Notification No. 115/73:

The initial claim for refund was filed by the Food Corporation of India under Notification No. 115/73, which exempted certain fertilizers from duty. However, the Assistant Collector rejected the claim, stating that the notification only exempted diammonium phosphate and ammonium nitro-phosphate, not ammonium chloride. This rejection was based on the specific language of Notification No. 115/73.

2. Validity of the refund claim based on ad hoc exemption Order No. 404 dated 29-9-1975:

The Food Corporation later filed an appeal citing ad hoc exemption Order No. 404 dated 29-9-1975, which specifically exempted the consignment imported by S.S. Green Bay. The Appellate Collector rejected this appeal, stating that the claim under the ad hoc order constituted a new claim and was therefore time-barred. The Tribunal, however, noted that quoting a new notification does not invalidate a refund claim, as established in previous decisions. The Tribunal agreed that the ad hoc exemption No. 404 would not invalidate the original claim made with the Assistant Collector.

3. Retrospective effect of the ad hoc exemption notification:

The Department argued that the ad hoc exemption could not be applied retrospectively as the goods were imported and cleared before the notification was issued. The Tribunal countered this argument by stating that the exemption was specific to the consignment and intended to act retrospectively. The Tribunal found that the exemption was valid despite its retroactive nature, as it was issued with the knowledge that the goods had already been cleared.

4. Application of Section 25(2) of the Customs Act, 1962:

Section 25(2) allows the Central Government to exempt goods from duty under exceptional circumstances. The Tribunal referenced the Delhi High Court's observation in Civil Writ 1802/1979 that considerations of retroactivity are not relevant for an order under Section 25(2). The Tribunal emphasized that the ad hoc exemption order was an executive fiat rather than a piece of legislation, and thus could be applied retrospectively.

5. Rejection of the refund claim by the Appellate Collector on the grounds of time-bar and shift in claim:

The Appellate Collector rejected the refund claim, citing a shift in the ground of the claim and time-bar issues. The Tribunal disagreed, noting that the Food Corporation had informed the Assistant Collector of the correct notification before the rejection of the original claim. The Tribunal also highlighted that the Appellate Collector was mistaken in rejecting the claim based on the ad hoc exemption as time-barred, given the Tribunal's previous decisions that allowed for such shifts in grounds.

Conclusion:

The Tribunal directed that the ad hoc exemption should be extended to the consignment in question and ordered that any duty recovered in excess of the exemption be refunded within three months. The Tribunal's decision was based on the understanding that the exemption was specifically intended to cover the consignment, despite its retrospective application. The Tribunal emphasized that the exemption was valid and should be implemented as issued.