9911796707
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Issues:
1. Rejection of application for refund of Additional Duty on imported consignment. 2. Classification of imported goods as a "drug" and exemption from Additional Duty. 3. Compliance with Drug Act and Drug Rules. 4. Application of the principle of unjust enrichment. 5. Verification of refund claim and interest on the refunded amount. Detailed Analysis: 1. The petitioner sought a refund of Additional Duty allegedly illegally recovered on an imported consignment of Sorbitol 70% Liquid USP. The application for refund was rejected by the customs authorities citing limitation under Section 27(i) of the Customs Act, 1962. The petitioner argued that the consignment was a "drug" exempt from Additional Duty, as per Notification No. 104/82-C.E. The rejection was challenged based on a judgment by Pendse, J. in a previous case. The court considered the timeliness of the refund application and the grounds for rejection. 2. The respondents contended that the imported goods were not classified as a "drug" as they did not comply with the Drugs and Cosmetics Act, 1940, and the Drug Rules. They argued that the consignment fell under Tariff Heading No. 29.01/45(1) of the Customs Tariff Act, 1975. The court analyzed the compliance requirements under the Drug Act and Drug Rules to determine the classification of the imported goods as a "drug" and the exemption from Additional Duty. 3. The court examined the provisions of the Drug Act and Drug Rules, specifically focusing on Sections 8 and 16, the Second Schedule, and Rules 38 to 41. It concluded that the consignment of Sorbitol 70% Liquid USP met the standards required for a "drug" based on the USP designation, indicating compliance with the United States Pharmacopoeia. The court dismissed the argument that the goods did not qualify as a "drug" due to alleged non-compliance with specific provisions, emphasizing the sufficiency of the documentation provided. 4. The principle of unjust enrichment was raised by the respondents to oppose the refund claim. They argued that the claim was barred on the basis of unjust enrichment and referenced the decision in Khandelwal Metal and Engineering Works v. Union of India. The court considered this defense along with other arguments raised by the respondents but ultimately rejected them based on previous judgments by Pendse, J. and the court itself. 5. The court addressed the issue of verification of the refund claim and the petitioner's request for interest on the refunded amount. It emphasized the need for verification to prevent erroneous claims and ruled that interest would not be granted unless mandated by statute, custom, or agreement. The court directed the respondents to pay the Additional Duty wrongly recovered to the petitioner, subject to verification, within a specified timeframe. Failure to comply would result in liability for interest. The court also discussed the petitioner's request for special directions regarding the refund process and clarified the procedures for executing orders in favor of the petitioners.
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