1992 (3) TMI 66 - HC - Customs

Summary

Issues Involved:

1. Classification of imported silica crucibles for duty assessment.
2. Entitlement to refund of countervailing duty.
3. Applicability of the doctrine of unjust enrichment.
4. Impact of the Central Excises and Customs Laws (Amendment) Act, 1991 on the refund claims.
5. Jurisdiction of the High Court under Article 226 of the Constitution.

Summary:

1. Classification of Imported Silica Crucibles for Duty Assessment:

The petitioner, a manufacturer of synthetic gems, imported silica crucibles under a valid import license and filed several Bills of Entry. The Assistant Collector of Customs assessed the goods under Customs Tariff Heading 70.21 and u/s 23A(4) of the Central Excise Tariff for countervailing or additional duty. The petitioner paid the demanded duty and cleared the consignment. However, the petitioner contended that the silica crucibles should be classified under Heading 69.03 of the Customs Tariff Act, which covers crucibles and not glassware, and thus should not be liable to additional duty under Item 23 of the Central Excise Tariff.

2. Entitlement to Refund of Countervailing Duty:

The petitioner filed a claim for refund on the grounds that the duty was collected without jurisdiction and under a mistaken impression of law. The Assistant Collector of Customs (Refunds) and the Appellate Collector of Customs rejected the claim. The Tribunal later ruled that fused quartz and fused silica should not be considered glass under Item 23A of the Central Excise Tariff, making them not liable for countervailing duty. Consequently, the petitioner argued that the duty collected should be refunded as it was without authority of law.

3. Applicability of the Doctrine of Unjust Enrichment:

The petitioner clarified that the silica crucibles were used in the manufacture of synthetic gems and were not sold or traded, thus the incidence of duty was not passed on to customers. The Bombay High Court's decision in Solar Pesticides Pvt. Ltd. v. Union of India was cited, which held that the doctrine of unjust enrichment does not apply when imported goods are consumed or used in the manufacture of other products, and thus the petitioner is entitled to a refund u/s 27(2)(a) and (b) of the Customs Act.

4. Impact of the Central Excises and Customs Laws (Amendment) Act, 1991 on the Refund Claims:

During the pendency of the writ petitions, the Central Excises and Customs Laws (Amendment) Act, 1991, came into force, which amended Sec. 27 of the Customs Act. The respondents argued that the writ petitions were not maintainable under the amended Act and that the petitioner should file an application before the Assistant Collector of Customs. However, the court held that the amended provisions cannot be applied retrospectively to claims made before the amendment, especially when the statutory period for filing a refund claim had already expired.

5. Jurisdiction of the High Court under Article 226 of the Constitution:

The court considered whether it had jurisdiction to entertain the writ petitions despite the amended Sec. 27 of the Customs Act. It was held that the High Court's jurisdiction under Article 226 of the Constitution cannot be ousted by statutory provisions, especially when the petitioner had not passed on the incidence of duty and the duty was collected without authority of law. The court directed the respondents to refund the amounts as prayed for in the writ petitions, applying the ratio of the Supreme Court's decisions in Salonah Tea Company Ltd. and Miles India Limited cases.

Conclusion:

The writ petitions were allowed, and the respondents were directed to refund the amounts collected as countervailing duty, with no order as to costs.