1987 (10) TMI 208 - AT - Central Excise

Summary

Issues:
Appeal against rejection of refund claim due to time limitation under Section 27 of the Customs Act.

Detailed Analysis:

1. Background of the Case:
The appeal was filed against the rejection of a refund claim by the Collector of Customs (Appeals), Bombay, due to exceeding the time limit for claiming the refund. The Customs Authorities had collected an excess amount of duty from the appellants, which was later pointed out by the audit party. The appellants applied for a refund of the excess amount, but it was rejected on the grounds of time limitation under Section 27 of the Customs Act.

2. Arguments and Procedure:
The appellants contended that they had paid the duty under protest, and therefore, the time limitation under Section 27 should not apply. The Collector (Appeals) upheld the rejection based on Section 27. The department explained a new procedure requiring parties to apply for refunds, leading to rejections for exceeding time limits. The Tribunal noted that this procedure lacked fairness and justice but lacked the authority to quash such orders.

3. Tribunal's Decision:
The Tribunal criticized the department's approach, emphasizing that a welfare state should not deny just claims on technical grounds. It highlighted that the Customs Act does not prohibit the department from making suo motu refunds for excess or erroneous collections, where Section 27's time limitation does not apply. Section 27 is meant for cases requiring an inquiry into refund validity, not for cases directed by the department itself. The Tribunal found that if the duty was paid under protest, the time limitation should not bar the claim, as this aspect was not considered by the authorities below.

4. Conclusion:
The Tribunal allowed the appeal, setting aside the previous orders, and remanded the matter to the Assistant Collector (Refund) for reconsideration in light of the observations made in the judgment. The decision highlighted the importance of fairness and justice in refund procedures and the need to consider all relevant aspects, such as payments made under protest, before applying time limitations under the Customs Act.