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TMI Blog1983 (12) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... nal duty of customs levied and collected on a consignment of Methyl Cellulose imported by them, as barred by the limitation under Section 27(1) of the Act. The Appellate Collector, by his order of 23-8-1979, held that the levy of additional duty was ab initio wrong since Methyl Cellulose was not among the enumerated cellulose derivatives in Item No. 15A(1)(iii) of the Central Excise Tariff Schedule (CET) which alone were liable to Central Excise duty under the said item. In this view of the matter, he held that the time limit under Section 27(1) of the Act did not apply to the case. Since the initial claim was within the limit applicable under the Indian Limitation Act, he allowed the appeal and directed refund of the additional duty collected. It is this order that is sought to be set aside by the Central Government's show cause notice of 6-2-1981 under Section 131(3) of the Act. This matter which was pending before the Central Government has, on the setting up of this Tribunal, come to it as transferred proceedings under Section 131B(2) of the Act for disposal as if it were an appeal filed before it. It appears that in pursuance of the Appellate Collector's order, the Custom Hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the imported Methyl Cellulose. (iv) The time-limit laid down in the procedural code is more based on administrative convenience and practicability. It can apply only to proper and legally valid assessment made in accordance with law. (v) If collection of import duty is contrary to the statutory notifications, the time-bar in Section 27 of the Act cannot apply - Patel India v. Union of India (AIR 1973 S.C. 1300). Where duty is illegally recovered, the time-limit laid down under the statute cannot apply - Associated Bearing Co. Ltd. v. Union of India - 1980 E.L.T. 415 (Bom.). (vi) If an assessee was not aware of an existing exemption notification when duty was worked out and paid, he is entitled to refund and the time-limit of six months provided in Section 27 of the Act will be inapplicable as the excess duty was recovered clearly in contravention of the notification and is also without jurisdiction so that the same is liable to be refunded by a direction in the nature of Mandamus, though the claim has been clearly rightly rejected by the Customs under the said section - Premraj Ganpatraj & Co. Pvt. Ltd. v. Asstt. Collector of Customs, Madras, - 1977 E.L.T. J 166 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions of the Respondents at some length because the learned Consultant for the Respondents during the hearing had made a submission that the written submissions should be taken into consideration and that he was not going over them again. 8. Turning first to the applicability of Section 131(5) of the Act to the present case, the said sub-section read as follows at the relevant time : "Where the Central Government is of opinion that any duty of Customs has not been levied or has been short-levied, no order levying or enhancing the duty shall be made under this section unless the person affected by the proposed order is given notice to show-cause against it within the time-limit specified in Section 28." Now Section 28(1) provides that "Where any duty has not been levied or has been short-levied, or erroneously refunded, the proper officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or which has been so short-levied or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice........... ". Sub-section (3) provides that f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther contended that if the Government wanted to revise orders for refund on the ground that there should not be any refund, it would also be a case of short-levy, and, therefore, the limitation of six months as provided in Section 28 would apply. It needs to be noted here that in the case before the Supreme Court, though the appellate order directed refund of duty, the refund had not, in fact, been made. The Hon'ble Supreme Court held that only where refund had, in fact, been made and money paid, the relevant date would be six months from the date of actual payment of refund. This was with reference to Section 28. The Court also held that erroneous refund was not a case of short levy. In para 23 of the judgment, the Court held :- "The provisions contained in Section 131(5) of the Act speak of limitation only with regard to non-levy or short-levy. It is significant that Section 131(5) does not speak of any limitation in regard to revision by the Central Government of its own motion to annul or modify any order of erroneous refund of duty. The provisions contained in Section 131(5) with regard to non-levy or short-levy cannot be equated with erroneous refund inasmuch as the three c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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