1991 (5) TMI 69 - HC - Customs

Summary

Issues:
- Claim for refund under Section 27 of the Customs Act, 1962
- Application for refund barred by limitation
- Knowledge of excess levy by the tax-payer
- Application for refund filed within the prescribed time limit
- Applicability of Article 113 of the Limitation Act
- Dispute regarding the quantum of refund
- Hearing of refund application on merits
- Direction for expedited hearing of refund application
- Continuation of Bank Guarantee

Analysis:
The appeal involved a claim for refund by the Orissa State Electricity Board under Section 27 of the Customs Act, 1962. The appellant contended that the refund application was not barred by limitation. The Customs Authorities had initially assessed duty to be paid by the Board, which was duly paid. However, a subsequent communication revealed an excess levy, prompting the Board to file an application for refund within a month. The Court noted that the date of knowledge of the excess levy was crucial in determining the limitation period. It was argued that the application for refund was not delayed and that the tax-payer should not be penalized for the assessing authority's error. The Court considered the applicability of Article 113 of the Limitation Act in this context.

The judgment also addressed the issue of unjust enrichment and the plea of limitation raised by the Customs Authorities. The Court decided not to delve into the issue of unjust enrichment due to the findings on the limitation aspect. The Customs Authorities raised a dispute regarding the quantum of the refund, emphasizing the need for a hearing on the merits of the refund application. The Court agreed that justice would be served by hearing the application on its merits without being hindered by the limitation plea under Section 27 of the Customs Act.

Furthermore, the Court directed an expedited hearing of the refund application by the appropriate authority, instructing the Departmental authorities to conclude the process within eight weeks. The judgment also highlighted the continuation of the Bank Guarantee provided by the appellant, which was to remain in force pending the outcome of the refund application. Ultimately, the order of the Trial Judge and the decisions of the Assistant Collector of Customs and the Collector of Customs (Appeals) were set aside, allowing for a fresh consideration of the refund application on its merits without the limitation issue. The appeal was disposed of with no order as to costs.