2002 (12) TMI 78 - HC - Customs

Summary

Issues Involved:
1. Whether a mistake committed by the importer in payment of higher duty owing to a computer mistake can be subject matter of an order of refund.
2. Whether Section 154 of the Customs Act applies to the rectification of such mistakes.
3. Whether the petition is barred by limitation u/s 27 of the Customs Act.
4. Whether the State can unjustly enrich itself at the cost of the importer.

Summary:

Issue 1: Mistake in Payment of Higher Duty
The petitioner, a public limited company, imported machinery and spare parts and paid 100 times more customs duty due to a clerical error in the declared value. The petitioner sought rectification and refund of the excess amount paid, arguing that the mistake was apparent from the record.

Issue 2: Applicability of Section 154 of the Customs Act
The petitioner filed an application u/s 154 of the Customs Act for rectification of the clerical error. The court examined Section 154, which allows correction of clerical or arithmetical mistakes in any decision or order passed by customs authorities. The court concluded that Section 154 does not cover errors committed by the importer and thus, does not apply to this case.

Issue 3: Limitation u/s 27 of the Customs Act
The respondents argued that the petition is barred by limitation u/s 27 of the Customs Act, which requires filing an application for refund within six months. The court noted that the bar of limitation would not apply if the State is unjustly enriching itself at the cost of the importer.

Issue 4: Unjust Enrichment by the State
The court emphasized that the State must act reasonably, fairly, and equitably, adhering to the principles under Article 14 of the Constitution of India. The court held that the State should not take recourse to unjust enrichment due to a bona fide mistake by the petitioner. The court further stated that a genuine mistake, even if committed by the petitioner, should be rectified, and the State should not unduly benefit from it.

Conclusion:
The court allowed the writ petition, directing the respondents to consider the matter on merit and pass an appropriate order after giving an opportunity of hearing to the petitioner. The court issued a writ of mandamus accordingly, disposing of the petition without any order as to costs.