1984 (11) TMI 341 - AT - Customs

Summary

Issues Involved:
1. Whether the payment made by the appellants is a Customs duty.
2. Is the claim of the appellants barred under Sec. 27(1) of the Customs Act, 1962.
3. Whether the Customs Act prohibits the Customs Authorities from refunding the amounts other than Customs duty.

Detailed Analysis of the Judgment:

1. Whether the payment made by the appellants is a Customs duty:

The appellants imported two crates of Cold Rolled Stainless Steel Sheets, but one crate did not land in India. The Bombay Port Trust issued a short-landing certificate for the missing crate. The appellants paid duty on both crates but later sought a refund for the duty paid on the short-landed crate. The Tribunal noted that no duty could be levied on goods that did not land in India. The payment made by the appellants for the short-landed crate should be treated as a deposit, not as a Customs duty. The Act does not prescribe any period of limitation for refunding such deposits.

2. Is the claim of the appellants barred under Sec. 27(1) of the Customs Act, 1962:

Section 27(1) of the Customs Act, 1962, deals with the refund of duty paid. The Tribunal highlighted that for Section 27(1) to apply, three conditions must be met:
- The refund claim should be for Customs duty.
- The payment should be in pursuance of an order of assessment made by an officer of Customs lower in rank than an Assistant Collector.
- The claim should be made within six months from the date of payment.

Since the payment made by the appellants was not Customs duty but a deposit, Section 27(1) does not apply. The Tribunal referred to the Bombay High Court's decision in Indian Dairy Corporation v. Union of India, which held that the limitation period under Section 27(1) does not apply to payments made without jurisdiction. The Tribunal concluded that the levy of duty on short-landed goods was without jurisdiction, making the limitation period under Section 27(1) inapplicable.

3. Whether the Customs Act prohibits the Customs Authorities from refunding the amounts other than Customs duty:

The Tribunal examined whether the Customs Act prohibits refunds of payments not made towards Customs duty. It noted that the Customs authorities function in dual capacities: as administrative/executive officers and as adjudicating authorities. The Act does not explicitly prohibit refunds of amounts not considered as Customs duty. The Tribunal referred to the Supreme Court's decision in Patel India Ltd. v. Union of India, which held that if a payment does not fall under the scope of the relevant refund provision, the authorities cannot retain the excess amount without legal authority. The Tribunal concluded that since the payment in question was not towards Customs duty, the Customs Act does not prohibit its refund. Therefore, the authorities have the right to order refunds outside the purview of Section 27.

Conclusion:

The Tribunal allowed the appeal, setting aside the orders passed by the lower authorities. It directed that the appellants be granted consequential relief, emphasizing that the payment made for the short-landed crate was not Customs duty and thus not subject to the limitations of Section 27(1) of the Customs Act, 1962.