2010 (9) TMI 389 - HC - Central Excise

Bill of Entry - Amendment it will not be in the interest of justice to relegate the petitioners to an alternate remedy after lapse of 23 years, especially, when this petition does not involve any disputed questions of fact requiring investigation thereof. the assessment of the bill of entry done by the customs authorities holding that the rate of duty was Rs. 20/- per kg. less 7 % i.e. 7 % of Rs. 20/- is liable to be declared as bad and illegal and stands substituted with that of rate of duty @ Rs. 20/- per kg. less 7 % ad valorem. Accordingly, the order of assessment is set aside and stands substituted in consonance with the view taken by the Tribunal at Madras in the case of Cortland Exports. With the result, petitioners would be entitled to refund as claimed amounting to Rs. 1,15,565.63, the quantum of which is not in dispute. - Refund will be subject to unjust enrichment.

Issues:
Challenge to assessment order of bills of entry, interpretation of Notification No. 431-Cus., entitlement to refund of duty, availability of alternate remedy, belated challenge to assessment, claim for refund, unjust enrichment, amendment of petition, consistency in judicial powers.

Analysis:
1. Challenge to Assessment Order of Bills of Entry: The petitioners challenged the assessment order of bills of entry related to imported Cloves under Heading 9.04/10 of the Customs Tariff Act, 1975. They contended that the bill of entry should have been assessed in accordance with Notification No. 431-Cus., dated 1st November, 1976, as interpreted by the Customs Excise and Gold (Control) Appellate Tribunal, Madras, in a specific order dated 30th September, 1985. The Customs Officer had initially rejected the petitioners' contention regarding the interpretation of the assessment.

2. Entitlement to Refund of Duty: Subsequent to learning about the Tribunal's judgment in a related case, the petitioners sought a refund of duty amounting to Rs. 1,15,565.53, quantified and paid by them. They amended their petition to challenge the assessment of bills of entry and claimed that they were entitled to a refund based on the Tribunal's interpretation of the relevant notification. The petitioners argued that the Tribunal's judgment was accepted by the Revenue and still valid.

3. Availability of Alternate Remedy and Belated Challenge: The respondent argued that the petition was misconceived and lacked merit as the petitioners should have pursued an appeal against the assessment order instead of directly filing for a refund. It was contended that the petitioners' belated challenge to the assessment should not be entertained by the Court, and they should have availed the alternate remedy of appeal.

4. Claim for Refund and Unjust Enrichment: The respondent suggested that the petitioners could file a suit for recovery of the tax paid under a mistake of law, citing a relevant Supreme Court judgment. Additionally, it was argued that the question of unjust enrichment would require detailed investigation, making it unsuitable for resolution in the writ jurisdiction of the Court. The respondent emphasized that the petition should be dismissed with costs.

5. Amendment of Petition and Judicial Consistency: The petitioners highlighted a previous judgment by the Court, where a similar petition was allowed, granting a refund to the petitioners in that case. They argued for consistency in judicial decisions and requested the Court to consider and decide their petition on its merits, similar to the previous case.

6. Court's Decision: After considering the arguments from both parties, the Court found that the assessment of the bill of entry was contrary to the Tribunal's order, which had been accepted by the Revenue. The Court held that it would not be just to relegate the petitioners to an alternate remedy after a significant delay of 23 years, especially when the matter did not involve disputed facts requiring investigation. The Court declared the assessment as bad and illegal, substituting it with the rate of duty as per the Tribunal's interpretation. Consequently, the petitioners were entitled to the claimed refund amount, subject to further investigation regarding unjust enrichment and possible credit to the Consumer Welfare Fund.

7. Conclusion: The Court allowed the petition, making the rule absolute with no order as to costs, thereby granting the petitioners the refund of duty as claimed and setting aside the assessment order in line with the Tribunal's interpretation. The Court emphasized the need for further investigation into the refund amount due to the doctrine of unjust enrichment and subsequent amendments to the Customs Act.

← Previous Next →