1992 (9) TMI 210 - AT - Customs

Summary

Issues:
1. Interpretation of Section 27(5) of the Customs Act, 1962.
2. Applicability of Section 27(5) to a refund claim made before its introduction in 1988.

Analysis:

1. The case involved a dispute regarding the refund of Customs duty by a company that purchased confiscated trawlers at a public auction. The company claimed that the vessels were exempt from duty under a specific notification. The Collector of Customs rejected the refund claim, stating that there was no order of assessment and no duty payable at the relevant time. The Collector of Customs (Appeals) also dismissed the appeal, citing the inability to guarantee that the vessels would not be broken up, thus denying the refund.

2. The company appealed to the Tribunal, arguing that Section 27(5) of the Customs Act, 1962 applied to their case, allowing for a refund claim if the goods were not leviable to duty or entitled to exemption. The Tribunal agreed, stating that the claim fell within the purview of Section 27(5) and that the vessels were exempt from duty under the notification. The Tribunal held that the refund claim was admissible under Section 27(5) of the Customs Act, 1962.

3. The applicant Collector contended that there was no order for payment of duty and no assessment made by an officer, as required under Section 27(1) of the Act. The Collector argued that Section 27(5) was inserted in 1988 and not applicable to a refund claim made in 1987. However, the respondents argued that Section 27(5) applied independently and was in force at the time of the appeal, allowing for the grant of relief based on the law in effect when the order was passed.

4. The Tribunal analyzed the provisions of Section 27(5) and concluded that it was independent of Section 27(1). The Tribunal noted that the introduction of Section 27(5) in 1988 did not render it redundant, as it provided for refund claims based on goods not leviable to duty or entitled to exemption. The Tribunal cited Supreme Court decisions on changes in law during the pendency of an appeal, emphasizing that the law in effect at the time of the order should govern the rights of the parties.

5. Ultimately, the Tribunal dismissed the Reference Application filed by the applicant Collector, affirming the applicability of Section 27(5) to the refund claim and the consideration of the law in effect at the time of the appeal.