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Issues involved: Determination of refund application u/s 27(1) of the Customs Act for excess duty paid on imported articles under Chapter 39 of the Customs Tariff, and the directive to refund the same.
Summary: The appeal was filed against a judgment regarding a refund application for excess duty paid on imported polythene polyols. The appellant realized the duty was payable under Chapter 38 of the Customs Tariff, leading to a refund application of Rs. 2,94,226.65 being filed. The Assistant Collector rejected the application citing Section 27(1) of the Customs Act, but the learned single Judge held this conclusion as erroneous. It was established that duty recovered without legal authority must be refunded, irrespective of the six-month limitation period for applications. The matter was remitted back to the Assistant Collector to determine and refund the excess duty paid, specifically focusing on the period between July 1977 and August 1978. The appeal challenged the directive to refund only the excess duty paid subsequent to April 24, 1978, arguing for a refund for the entire period between July 1977 and August 1978. The Court agreed with this argument, emphasizing the need for determining and refunding the excess duty paid during the entire period in question. Consequently, the appeal was allowed, and the respondents were directed to ascertain and refund the excess duty paid between July 1977 and August 1978 within three months, with an interest rate of 18% per annum applicable if the refund was delayed beyond the specified period. In conclusion, no costs were awarded in this case.
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