1990 (9) TMI 112 - AT - Customs

Summary

Issues Involved:
1. Time-barred refund claim under Section 27 of the Customs Act, 1962.
2. Applicability of Section 154 of the Customs Act, 1962 for correction of clerical or arithmetical mistakes.
3. Relationship between Section 27 and Section 154 of the Customs Act, 1962.
4. Consequential relief and time limits under Section 154.

Detailed Analysis:

1. Time-barred Refund Claim under Section 27 of the Customs Act, 1962:
The appellants submitted a refund claim on 12-3-1986, citing an excess payment due to a calculation error in the Bill of Entry dated 5-6-1985. The Assistant Collector rejected the claim as time-barred under Section 27, which mandates that refund claims must be filed within six months from the date of payment of duty. The Collector (Appeals) upheld this decision. The Tribunal had to determine whether the rejection was lawful, considering the appellants' argument that their claim should be considered under Section 154.

2. Applicability of Section 154 of the Customs Act, 1962 for Correction of Clerical or Arithmetical Mistakes:
The appellants argued that their claim was for a correction of an arithmetical error under Section 154, which does not prescribe a time limit. Section 154 allows correction of clerical or arithmetical mistakes "at any time." The Tribunal had to decide if the correction under Section 154 could lead to a refund without being subjected to the time constraints of Section 27.

3. Relationship between Section 27 and Section 154 of the Customs Act, 1962:
The Tribunal examined whether Sections 27 and 154 should be read together or independently. One member opined that these sections are independent and Section 154 should not be constrained by the time limits of Section 27. Another member argued that both sections must be read conjointly, meaning that even if a correction is made under Section 154, the refund claim must comply with the time limits prescribed under Section 27.

4. Consequential Relief and Time Limits under Section 154:
The Tribunal also had to consider if a correction under Section 154 inherently includes granting consequential relief, such as a refund, and whether such relief is subject to the time limits of Section 27. The majority view held that Section 154 is independent of Section 27 and that relief under Section 154 can be granted "at any time" without being subject to the time limits of Section 27.

Separate Judgments:

Majority View:
The majority concluded that:
1. Section 154 and Section 27 are independent provisions.
2. Section 154 allows corrections "at any time" and does not impose a time limit for granting consequential relief.
3. The lower authorities erred by not considering the appellants' claim under Section 154 and by rejecting it solely based on Section 27.

Minority View:
One member dissented, holding that:
1. Sections 27 and 154 must be read together.
2. Any claim for a refund, even if arising from a correction under Section 154, must adhere to the time limits prescribed under Section 27.
3. The refund claim was rightly rejected as time-barred under Section 27.

Final Order:
The Tribunal, by majority, set aside the orders of the lower authorities and remanded the case for de novo consideration under Section 154, emphasizing that corrections and consequential relief under Section 154 are not subject to the time limits of Section 27.