1984 (11) TMI 328 - AT - Customs

Summary

Issues:
1. Refund claim based on shortages rejected for non-compliance with Sec. 23 of the Customs Act.
2. Absence of Customs supervision during survey affecting the validity of the survey report.
3. Failure to consider the survey report as valid evidence.
4. Lack of evidence to establish pilferage during transit.
5. Decision to remand the matter to the Assistant Collector for fresh consideration.

Analysis:

1. The appellants' refund claim based on shortages was initially rejected by the Assistant Collector for not producing the Customs Examination report, which was deemed necessary under Sec. 23 of the Customs Act. The Appellate Collector upheld this decision, emphasizing that Customs supervision during the survey was a prerequisite for refund eligibility.

2. During the appeal, the respondent Collector argued that the survey, conducted without Customs authorities present, did not establish the claimed shortages. However, upon review, it was found that Sec. 23 of the Customs Act does not mandate Customs supervision during surveys, and the absence of such supervision does not invalidate the survey report.

3. The Appellate Tribunal highlighted the importance of considering survey reports as valid evidence, emphasizing factors such as the location and timing of the survey, the independence and competence of surveyors, and the purpose of the survey. The failure of the lower authorities to consider the survey report was deemed a critical oversight.

4. The issue of establishing pilferage during transit was raised by the respondent, but it was noted that the rejection of the claim did not hinge on the failure to prove pilferage while the goods were in the custody of the Bombay Port Trust Authorities.

5. After careful consideration, the Appellate Tribunal allowed the appeal, setting aside the previous orders and remanding the matter to the Assistant Collector for fresh consideration. Both parties were granted the opportunity to present additional evidence, with a directive for the Assistant Collector to resolve the matter within six months of receiving the order.