1985 (1) TMI 336 - AT - Customs

Summary

Issues:
1. Interpretation of Sections 23 and 27 of the Customs Act regarding remission of duty and refund claims.
2. Application of Section 27(1) to a claim arising under Section 23(1).
3. Obligations of the Assistant Collector in remitting duty under Section 23(1).
4. Requirement of making an application for refund under Section 27(1) within the prescribed period.

Analysis:
The case involved an appeal regarding the refund of Customs duty on a shortage of imported goods. The National Leather Cloth Mfg. Co. imported PVC Resin Solvic, and after discrepancies were found in the quantity, they sought a refund of the excess duty paid. The Assistant Collector and the Appellate Collector rejected the refund claim citing Section 27(1) as the basis for refusal.

The main legal question was whether the provisions of Section 27(1) applied to a claim arising under Section 23(1) of the Customs Act. The appellant contended that their claim fell under Section 23(1) as the goods were lost before actual clearance for home consumption. The appellant's advocate argued that the Assistant Collector had a statutory obligation to remit the duty without the need for a formal refund application.

The Tribunal analyzed the provisions of Sections 23 and 27 of the Customs Act. Section 23(1) allows remission of duty on goods lost or destroyed before clearance for home consumption, subject to assessment and payment of duty. The Tribunal clarified that payment of duty follows assessment and that remission depends on the extent of loss or destruction. The Assistant Collector's power to remit duty under Section 23(1) does not impose an obligation to send the duty to the importer without a formal process.

Regarding the refund claim, the Tribunal emphasized that Section 27(1) requires a formal application for refund within the prescribed period. Even if the basis for the claim is under Section 23(1), the application must comply with Section 27(1)'s procedural requirements. As the appellant's claim was time-barred under Section 27(1), the authorities were justified in rejecting the claim.

Ultimately, the Tribunal upheld the decision of the lower authorities, stating that the rejection of the refund claim was legally correct. The appeal was dismissed based on the non-compliance with the procedural requirements of Section 27(1 for making a refund claim within the prescribed time limit.