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Issues:
Challenge to order of Collector of Customs (Appeals) for refund of countervailing duty; Refund claims barred by limitation; Interpretation of Retrospective Act; Doctrine of unjust enrichment. Analysis: The petitioners sought to set aside the order of the Collector of Customs (Appeals) dated 21st August, 1987, and demanded a refund of the countervailing duty collected from them. The petitioners imported goods for manufacturing pharmaceutical products and contended that the goods were exempt from excise duty for a specific period. The Retrospective Act, effective from 8th September, 1986, exempted excise duty on such goods, making countervailing duty collection illegal. The petitioners filed refund claims within six months of the Act's commencement, contrary to the Assistant Collector's view of being time-barred under Section 27 of the Customs Act, 1962. The Court examined the purpose of countervailing duty under Section 3 of the Customs Tariff Act, levied to counterbalance excise duty on locally made goods. Since no excise duty was payable on the imported goods due to exemptions, countervailing duty was not justified. The refund claims were well within the six-month limitation period prescribed by the Retrospective Act, overriding the limitation under Section 27 of the Customs Act. Regarding the doctrine of unjust enrichment, the Court referred to precedents emphasizing the need to prove that the duty incidence was not passed on to others. The petitioners' refund claims were subject to this test under Section 27 of the Customs Act, ensuring compliance with statutory requirements. The Court set aside the Collector of Customs (Appeals) order, ruling in favor of the petitioners. The refund applications were deemed maintainable and within the statutory limitation period. The matter was remitted back to the Assistant Collector of Customs for a fresh decision on the refund claims, emphasizing adherence to legal procedures and expeditious resolution within three months. In conclusion, the Court allowed the petition, directing the refund of countervailing duty and emphasizing compliance with statutory provisions and the doctrine of unjust enrichment in processing the refund claims.
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