1995 (11) TMI 113 - HC - Customs

Summary

Issues Involved:
1. Classification of imported silica crucibles for customs duty.
2. Refund claim for additional duty paid.
3. Applicability of the doctrine of unjust enrichment.
4. Retrospective application of amended refund provisions.
5. Limitation period for refund claims.
6. Availability of alternative remedies before invoking writ jurisdiction.

Summary:

1. Classification of Imported Silica Crucibles for Customs Duty:
The Assistant Collector of Customs classified the imported silica crucibles under Customs Tariff Heading 70.21 as "other articles of glass" and levied additional or countervailing duty under item 23-A(4) of the Central Excise Tariff (CET). The company contested this classification, arguing that silica crucibles should be classified under Heading 69.03 of CUSTA, which covers crucibles and not glassware, thus not liable to additional duty under item 23 of CET.

2. Refund Claim for Additional Duty Paid:
The company filed for a refund of the additional duty paid, asserting that the duty was levied under a mistaken impression of law. The Assistant Collector of Customs (Refunds) and the Appellate Collector of Customs rejected these claims. The Tribunal later ruled that fused quartz and fused silica should not be considered as 'glass' under CET, thus not liable to countervailing duty. The company then sought a refund through writ petitions.

3. Applicability of the Doctrine of Unjust Enrichment:
The court examined whether the doctrine of unjust enrichment applied to the company's refund claims. It was determined that the company had not passed on the incidence of the duty to its customers as the silica crucibles were used as refractory goods in manufacturing synthetic gems and were not sold or traded. Thus, the question of passing on the duty did not arise.

4. Retrospective Application of Amended Refund Provisions:
The court considered whether the amended provisions of Section 27 of the Act and Sections 28C and 28D, introduced by the Central Excises and Customs Laws (Amendment) Act, 1991, applied retrospectively to pending refund claims. It was concluded that these provisions do apply retrospectively, as established by the Supreme Court in ITC Limited's case.

5. Limitation Period for Refund Claims:
The court held that the bar of limitation under Section 27 of the Act does not apply when the duty was paid under a mistake of law and there were no laches on the part of the company in seeking redress. The company had filed the writ petitions within a reasonable time after discovering the mistake.

6. Availability of Alternative Remedies Before Invoking Writ Jurisdiction:
The court acknowledged that normally, statutory remedies should be exhausted before invoking writ jurisdiction. However, in this case, since the refund claims were filed within a reasonable time and involved interpretation of law, the court exercised its jurisdiction under Article 226 of the Constitution. The court found that the alternative remedy was not efficacious as the Assistant Collector could not entertain claims beyond the statutory period of limitation.

Conclusion:
The writ appeals were dismissed, affirming the company's entitlement to a refund of the customs duty paid on silica crucibles. The court held that the company had not passed on the incidence of duty to its customers, and the bar of limitation did not apply. The retrospective application of the amended refund provisions was upheld. The writ petition by SRF Limited was dismissed as the company failed to provide evidence that the duty was not passed on to customers.