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Issues:
1. Rejection of refund applications on the ground of limitation. 2. Applicability of section 27(1) of the Customs Act, 1962. 3. Interpretation of retrospective effect of rulings. 4. Failure to consider if goods were covered by ruling 23 of 1965. Detailed Analysis: 1. The judgment addresses the common issue of whether the respondents were legally justified in rejecting refund applications based on limitation. The petitioner, a private Ltd. Co., imported goods and paid duty under a mistaken impression of the applicable tariff item. Subsequently, realizing the error, they sought a refund based on a ruling issued by the Collector of Customs. However, the refund application was rejected by the Principal Appraiser of Customs, citing it as time-barred under section 27(1) of the Customs Act, 1962. The Appellate Collector and Central Government upheld this decision, leading to the legal challenge. 2. The court deliberated on the applicability of section 27(1) of the Customs Act, emphasizing that tax or duty collection must be lawful under Article 265 of the Constitution. Citing precedents, including Patel India (P) Ltd. v. Union of India, the judgment highlighted that duties collected without legal authority are not validly collected. In this context, the retrospective effect of rulings was crucial. The court noted that if duties were not legally payable, the limitation period under section 27(1) would not apply. The judgment underscored that the retrospective effect of rulings from dates precluding refund claims rendered the limitation provision inapplicable. 3. Regarding the retrospective effect of rulings, the court analyzed the amendment to the initial ruling and its impact on duty liability. The judgment emphasized that the retrospective application of rulings, especially with subsequent amendments, indicated that the duty initially levied was not legally due. This retrospective nature of the rulings from dates preceding the refund application rendered the limitation argument untenable. The court stressed that administrative orders should allow refunds for duties erroneously charged, as in this case, where the duty was not legally payable. 4. The judgment also highlighted the failure of authorities to determine if the imported goods fell under ruling 23 of 1965. The court noted that if the authorities found the goods covered by the ruling, the petitioners would be entitled to a refund in accordance with the ruling. This aspect underscored the importance of assessing the applicability of relevant rulings to determine refund eligibility. Consequently, the court directed the case back to the Assistant Collector of Customs for a determination on the coverage of the goods under ruling 23 of 1965 and instructed a timely resolution within four months. In conclusion, the judgment delves into the legality of duty collection, the retrospective effect of rulings, and the necessity of assessing goods' coverage under relevant rulings for refund eligibility, ultimately directing a reevaluation by the Customs authorities.
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