1989 (3) TMI 136 - HC - Customs

Summary

Issues Involved:
1. Classification of the imported consignment under Heading 84.22 or Heading 87.07 of the Customs Tariff Act, 1975.
2. Entitlement of the petitioner to a refund of the difference in duty if the classification is in their favor.
3. Jurisdiction and appropriateness of filing a writ petition versus availing departmental appellate remedies.
4. Applicability of the law of limitation and Section 72 of the Indian Contract Act regarding the refund claim.

Detailed Analysis:

1. Classification of the Imported Consignment:
The primary issue revolves around whether the Belotti B-75 Container Handling Crane and its spares imported by the petitioner fall under Heading 84.22 or Heading 87.07 of the Customs Tariff Act, 1975. Heading 84.22 pertains to "Cranes, transporter cranes, etc.," while Heading 87.07 pertains to "Vehicles." The petitioner argued that the consignment is a "special purpose mobile crane designed to handle containers of various types," and thus should fall under Heading 84.22. The Customs Department, however, classified it under Heading 87.07, which relates to "mechanically propelled vehicles used for short distance transport or handling of goods."

The court examined the technical literature and the popular and trade meaning of the consignment. It emphasized that the primary function of the crane is handling containers, not transporting goods, and thus it should not be termed as a "Vehicle." The court concluded that the consignment falls under Heading 84.22, which includes cranes and transporter cranes, and not under Heading 87.07, which deals with works trucks.

2. Entitlement to Refund:
The petitioner sought a refund of the difference in duty paid under Heading 87.07 and the duty payable under Heading 84.22. The court noted that the petitioner had paid the duty under a mistake of law, and as per Section 72 of the Indian Contract Act, the excess payment must be refunded. The court also referred to Article 113 of the Limitation Act, which allows a period of three years from the discovery of the mistake to file a claim. Since the petition was filed within this period, the petitioner was entitled to the refund.

3. Jurisdiction and Appropriateness of Filing a Writ Petition:
The respondents contended that the petitioner should have availed of the departmental appellate remedies instead of filing a writ petition. The court observed that the petitioner had corresponded with the Customs Authorities before and after the import, and was informed of the expert opinion only after the period for filing an appeal had expired. The appellate authorities, being creatures of statute, had no jurisdiction to condone the delay. Thus, the petitioner's appeal would have been futile, and the writ petition was justified.

4. Applicability of the Law of Limitation:
The court addressed the issue of limitation by referring to Section 17(c) of the Limitation Act, which states that the period of limitation for relief from the consequences of a mistake begins from the discovery of the mistake. The court held that the petitioner's claim was within the three-year period prescribed by Article 113 of the Limitation Act. Additionally, the court cited precedents where it was held that duty recovered without authority of law must be refunded, and the statutory limitation for refund claims does not apply in such cases.

Conclusion:
The court ruled in favor of the petitioner, directing the respondents to refund the difference between the duty levied under Heading 87.07 and the duty payable under Heading 84.22 within eight weeks. The court also stayed the order for six weeks on the respondents' application. The petition was successful, and no costs were awarded.