1991 (11) TMI 65 - HC - Customs

Summary

Issues:
1. Entitlement to refund of Customs duty paid after the expiry of the statutory period of limitation.
2. Application of the limitation period under Section 27(1) of the Customs Act, 1962 for claiming refund.
3. Consideration of refund under mistake of law and jurisdiction.
4. Jurisdiction of the court to direct refund in a proceeding under Article 226 of the Constitution.
5. Comparison with a previous judgment regarding the time limit for claiming refund.
6. Exhaustion of alternate remedies by way of appeal to the authorities under the Act.

Analysis:

Issue 1: Entitlement to refund of Customs duty paid after the expiry of the statutory period of limitation.
The petitioner imported a substance for manufacturing purposes and paid excess Customs duty due to a wrong assessment by the Customs authorities. The main issue was whether the petitioner was entitled to a refund of the excess amount paid after the statutory period of limitation had expired. The Customs authorities rejected the refund application solely based on the late filing beyond the six-month limitation period.

Issue 2: Application of the limitation period under Section 27(1) of the Customs Act, 1962 for claiming refund.
Section 27(1) of the Customs Act mandates that a claim for refund of duty should be made within six months from the date of its payment. The court analyzed whether the limitation period could be used to deny a refund when duty was paid without the sanction of law. It referenced a Supreme Court case stating that public bodies must return erroneously recovered money without any limitation period.

Issue 3: Consideration of refund under mistake of law and jurisdiction.
The court held that duty paid under a mistake of law was recovered without legal authority and jurisdiction. Therefore, the limitation period set out in Section 27(1) of the Act could not be applied to deny a refund in cases of payments made under a mistake of law.

Issue 4: Jurisdiction of the court to direct refund in a proceeding under Article 226 of the Constitution.
The court confirmed its power to direct a refund of the amount paid under a mistake of law in a proceeding under Article 226 of the Constitution. It emphasized that no avoidable delays were attributed to the petitioner, and the court could intervene to ensure justice.

Issue 5: Comparison with a previous judgment regarding the time limit for claiming refund.
The court distinguished a previous judgment where a refund claim was rejected due to the failure to meet the six-month limitation period. In the present case, the court noted that the duty was wrongly levied without legal sanction, and the refund claim was not dependent on disputed factual questions.

Issue 6: Exhaustion of alternate remedies by way of appeal to the authorities under the Act.
The respondents argued that the petitioner should have pursued alternate remedies by appealing to authorities under the Act. However, the court dismissed this argument, stating that the appellate authority could not ignore the statutory limitation period. It held that in the interest of public equity, the petitioner was entitled to a refund of the excess duty paid.

Overall, the court directed the respondents to refund the amount claimed by the petitioner and imposed an interest rate for delayed payment, emphasizing the court's authority to ensure justice and equity in such matters.