2017 (1) TMI 965 - HC - Customs

Levy of cess - Agricultural Produce Cess Act, 1940 - export of Prawns/Shrimps - refund of cess paid by appellant - unjust enrichment - Held that - The appeal filed by the assessee has been entertained. Thereafter, on the ground of time barred claim of the assessee, the department seeks to review the order, which ofcourse have been entertained by the department, after an expiry of the limitation period of 90 days. Under such circumstances, without looking into the merits of the case, the learned Single Judge directed the appellant herein to approach the Appellate Tribunal. Considering that the review has been made belatedly, whether it is untenable or not, there appears to be unjust enrichment as fixed by the department. As such, the amount refunded should not have been recovered, which was being paid by the assessee to the department. In consideration of the provisions under Section 129D (2) and the admitted dates that has been cited in the writ petition, the review is barred by limitation and hence the same is liable to be quashed. When there is violation of principles of natural justice and the question of maintainability, the same can be questioned under Article 226 and 227 of the Constitution of India. Learned Single Judge has rejected the writ petition solely on the ground that the writ petitioner is the beneficiary. However, we find that the refund has been recovered. They are independent and distinct and are not connected to each other. Order of the learned Single Judge and the order dated 31.10.2014 of the Commissioner (Appeals) is set aside, which is barred by limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge against order directing approach to Tribunal instead of Commissioner (Appeals), Review petition filed beyond limitation period, Maintainability of review petition, Principles of natural justice violation, Refund recovery and its connection to maintainability, Interpretation of Section 129D of the Customs Act.

Analysis:
1. Challenge against order directing approach to Tribunal: The appellant challenged an order directing them to approach the Tribunal instead of the Commissioner (Appeals). The Court noted that the review petition was filed beyond the limitation period. The appellant contended that the order of the Single Judge was not maintainable due to the review being time-barred and lacking relevant documents. The Court found that the Single Judge did not consider the review's timeliness and ruled in favor of the appellant, allowing the appeal.

2. Review petition filed beyond limitation period: The Court analyzed Section 129D of the Customs Act, which specifies the time limit for reviews. The review petition in question was filed beyond the prescribed period. The Court emphasized that the review being entertained after the limitation period was unjust, leading to a direction to approach the Tribunal. The Court held that the review beyond the limitation period should be quashed, considering the provisions of Section 129D.

3. Maintainability of review petition: The issue of the review petition's maintainability was raised, questioning the validity of filing it beyond the limitation period. The Court determined that the review being filed after the time limit was a crucial factor. The appellant rightly approached the Court to challenge the order, emphasizing the violation of natural justice principles. The Court concluded that the review filed beyond the limitation period was not tenable.

4. Principles of natural justice violation: The Court highlighted the importance of upholding principles of natural justice. It acknowledged the appellant's concern regarding the review petition filed late and the need for a fair process. The Court's decision to quash the review was based on the fundamental principle of ensuring justice and adherence to legal procedures.

5. Refund recovery and its connection to maintainability: The Court addressed the issue of refund recovery in connection with the maintainability of the review petition. It emphasized that the refund should not have been recovered if the review was filed beyond the limitation period. The Court's decision to set aside the Commissioner's order was based on the connection between the refund recovery and the review's timeliness.

6. Interpretation of Section 129D of the Customs Act: The Court provided a detailed interpretation of Section 129D of the Customs Act, focusing on the time limits for reviews and the actions permissible within those limits. The Court's analysis of this section guided its decision to quash the review filed beyond the prescribed period, highlighting the importance of legal compliance and procedural fairness.

In conclusion, the Court allowed the Writ Appeal, setting aside the orders of the Single Judge and the Commissioner (Appeals) due to the review being barred by limitation. The Court emphasized the significance of adhering to legal timelines and principles of natural justice in administrative proceedings.