1993 (6) TMI 75 - HC - Customs

Summary

Issues:
1. Assessment of customs duty under the correct tariff entry.
2. Refund application rejected on the grounds of limitation under Section 27(1) of the Customs Act.
3. Challenge to the impugned order under Article 226 of the Constitution of India.
4. Accuracy of the amount of refund claim and the need for re-examination by the Assistant Collector.

Analysis:

Issue 1: Assessment of customs duty under the correct tariff entry
The petitioners, a limited company engaged in metal distribution, imported goods under contracts with foreign suppliers. The Customs Department claimed that the goods were to be assessed under a different tariff entry than what the petitioners believed, resulting in a discrepancy in the customs duty payable. The petitioners filed 26 bills of entries for clearance, but the Customs Department insisted on a higher rate of customs duty. The Court found that the Customs Department had assessed the duty incorrectly, and the petitioners were entitled to a refund due to short landing of goods.

Issue 2: Refund application rejected on the grounds of limitation
The petitioners filed refund applications after paying duty under protest upon noticing short delivery of goods. The Assistant Collector rejected the applications citing limitation under Section 27(1) of the Customs Act. However, the Court held that the bar of limitation did not apply in this case because the duty was paid under protest. The Court referenced a previous judgment to support this reasoning and concluded that the Assistant Collector's rejection on the grounds of limitation was not valid.

Issue 3: Challenge under Article 226 of the Constitution of India
The petitioners challenged the Assistant Collector's order through a petition under Article 226 of the Constitution of India. The Court found merit in the petitioners' argument that the duty was paid under protest and that the Assistant Collector's decision was not in accordance with the law. The Court set aside the impugned order and directed the Assistant Collector to re-examine the refund applications without considering the bar of limitation.

Issue 4: Accuracy of the amount of refund claim and re-examination by the Assistant Collector
The Department's counsel raised concerns about the accuracy of the refund claim amount and requested a re-examination by the Assistant Collector. The Court agreed with this submission and directed the Assistant Collector to calculate the refund amount accurately and issue appropriate orders within two months. Failure to comply would result in the respondents refunding the amount with interest. The Court also ordered the respondents to pay the costs of the petition.

In conclusion, the High Court ruled in favor of the petitioners, setting aside the Assistant Collector's order and directing a re-examination of the refund applications without considering the limitation period.