1993 (6) TMI 82 - HC - Customs

Summary

Issues:
1. Whether the Assistant Collector of Customs was justified in rejecting the refund application based on the exemption sought from payment of duty?
2. Interpretation of exemption notifications issued by the Central Government.
3. Applicability of a previous Division Bench judgment on the current case.
4. Examination of the claim for refund under the Customs Act.

Analysis:
The petitioners imported PVC resin subject to customs duty under Tariff Item No. 39.01/06, with the Central Government issuing exemption notifications regarding the duty leviable. Initially, an exemption notification exempted PVC resin from the whole of customs duty until March 31, 1981. Subsequently, a new notification limited the exemption to duty exceeding 40% ad valorem. The petitioners, having opened letters of credit after the second notification, claimed the benefit of the first notification for their imports. The Assistant Collector rejected the refund application, leading to the petition challenging this decision under Article 226 of the Constitution.

The petitioners argued that a Division Bench judgment had concluded that the advantage granted by the first exemption notification could not be withdrawn before March 31, 1981. The court acknowledged this precedent and held that the petitioners were entitled to the benefit of the initial exemption notification despite opening letters of credit post the second notification. The respondents contended that the claim for refund of customs duty was not permissible under the amended provisions of Section 27 of the Customs Act. The court agreed that the department needed to verify the claim and determine its admissibility under the current legal framework.

Ultimately, the court ruled in favor of the petitioners, directing the Assistant Collector to reexamine the refund claim in light of the amended provisions of the Customs Act. If found admissible, the accuracy of the claim should be verified, and the refund granted accordingly. The judgment did not award costs to either party, considering the circumstances of the case.