1990 (5) TMI 124 - AT - Customs

Summary

Issues:
1. Interpretation of Sec. 23 and Sec. 27 of the Customs Act, 1962 regarding refund of duty.
2. Applicability of the bar of limitation under Sec. 27 for claiming refund.
3. Determination of whether the goods were abandoned under Sec. 23 of the Act.
4. Analysis of whether the duty paid was in pursuance of an order of assessment.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Madras involved a dispute regarding the refund of duty paid by the respondent for the import of alloy steel. The Collector of Customs and Central Excise (Appeals), Madras had remitted the respondent's claim for refund de novo, leading to the appeal by the Department. The primary issue revolved around the application of Sec. 27 of the Customs Act, 1962, which prescribes a limitation period of six months for claiming a refund of duty. The Department contended that since the duty was paid erroneously and the goods were purportedly abandoned under Sec. 23, the limitation period should apply. The lower appellate authority had held that Sec. 27 was not applicable, leading to the appeal before the Tribunal.

The Department argued that the lower appellate authority erred in not upholding the original authority's decision based on the application of Sec. 27. They contended that the duty paid after the abandonment of goods should still fall under the limitation period for claiming a refund. On the other hand, the respondent's Counsel argued that the goods were mistakenly abandoned under Sec. 23 and since the goods were not related to the respondent, the duty paid should be considered a wrong payment or deposit, not falling under the purview of duty as per the Customs Act, 1962. They emphasized that the respondent had no title or right to the goods, making the levy of duty irrelevant in this context.

Upon careful consideration, the Tribunal found that the lower appellate authority's reasoning that the respondent had abandoned the goods under Sec. 23 was flawed. The Tribunal highlighted the interplay between Sec. 23 and Sec. 27, emphasizing that if the respondent abandoned the goods, the right to claim a refund would be subject to the limitation period under Sec. 27. The Tribunal rejected the argument that the duty paid was not in pursuance of an order of assessment, stating that if the amount was paid mistakenly, the respondent should seek administrative relief rather than invoking the provisions of the Customs Act, 1962 for a refund.

Ultimately, the Tribunal set aside the lower appellate authority's decision, declaring both the lower appellate authority's and the original authority's orders as legally invalid. The Tribunal allowed the Department's appeal, indicating that the respondent could seek administrative recourse for the return of the mistakenly paid amount, which was not considered duty under the Act. The Tribunal suggested that due to the insignificance of the amount involved, administrative authorities could address the issue without further legal proceedings.