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TMI Blog1990 (5) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Bill of Entry dated 6-8-1979. The goods were assessed to duty under Heading 40.05/16(3) at 40% plus countervailing duty at the rate of 25% under Item 16-A(4) of the Customs Tariff Act, 1975. The appellant thereafter made an application for refund of the excess of duty so charged contending that the goods were in fact liable to be classified under Heading 59.16/17 and without countervailing duty. The Assistant Collector rejected the claim by his order of 12-10-1979. Against it, the appellant preferred an appeal under Section 128 of the Customs Act, 1962 (hereinafter referred to as the `Act') to the Appellate Collector of Customs. On May 2, 1981, the Appellate Collector allowed the appeal holding that the goods were classifiable under Heading 59.16/17. 2. On November 21, 1981, the Government issued a notice to the appellant under Section 131(3) of the Act asking him to show cause as to why the goods should not be classified under Heading 39.07 which attracted duty at 100% ad valorem and also to show cause as to why the order of 2nd May, 1981 passed by the Appellate Collector should not be annulled. Against the said show cause notice, the appellant preferred an appeal to CEGAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 categories of errors in the levy are dealt with separately." 5. Further, even if it was held that the limitation as laid down in Section 28 would apply to the limitation of action under Section 131(3), since the appellate order has only allowed the appeal of the appellant declaring him as being entitled to the refund, and no refund has yet been made, the action of the Government under Section 131(3) is clearly not barred by limitation. Section 28 of the Act states that when any duty has been erroneously refunded, the proper Officer may, within six months from the relevant date, serve notice on the persons chargeable with the duty to whom the refund has erroneously been made, requiring them to show-cause why they should not pay the amount specified in the notice. Sub-section (3) of Section 28 then defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are contemplated in sub-section (5) are cases arising out of the acts of omissions and commissions of the original assessing authority, and it is when such orders passed by the original assessing authority which are sought to be annulled or modified, that the provision of limitation contained in Section 28 applies. Thus the situations contemplated by sub-section (3) and by sub-section (5) are mutually exclusive in that whereas sub-section (3) speaks of the annulment or modification of the appellate or revisional orders, sub-section (5) speaks of the orders passed by the original assessing authority. Hence, the limitation applies when the Government seeks to annul or modify orders of the original assessing authority under sub-section (5) and not when the Government takes action to annul or modify the appellate or revisional orders under sub-section (3). 7. This interpretation is also consistent with the provisions of sub-sections (1) and (4) of Section 131. Sub-section (1) speaks only of appellate and revisional orders passed under Sections 128 and 130 respectively and of no other order. Similarly, clauses (a) and (b) of the sub-section (4) make a distinction between the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Collector on grounds which are factual in nature, asserting that the goods had not correctly been assessed to duty and that they should have been assessed under a different Heading 59.16/17 of the Customs Tariff Act, 1975. On 12-10-1979 the claim for refund was rejected by the Assistant Collector by an order. On appeal by the appellant the Appellate Collector of Customs took a different view as to the nature of the consignment imported and assessed it to duty under Heading 59.16/17 allowing the appeal with consequential relief. On the report of the Collector of Customs the Government issued a suo moto show cause notice dated 21-11-1981 prima facie being of the view that the Appellate Collector was not correct in classifying the goods under Heading 59.16/17 of the Customs Tariff Act, 1975, as also that the original classification under Heading 40.05/16(3) done by the Assistant Collector was also not in order. The matter thus was sent to the Customs, Excise Gold (Control) Appellate Tribunal, New Delhi where the plea of limitation was raised by the appellant besides raising factual pleas with regard to the nature of the consignment and its liability to be classified under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 131 of the Customs Act, 1962 is as follows : "131. REVISION BY CENTRAL GOVERNMENT - (1) The Central Government may, on the application of any person aggrieved by - any order passed under Section 128, or(a) any order passed under Section 130 otherwise than on the(b) application of any aggrieved person, or any order passed on the application of any aggrieved person(c) under Section 130 where the order is of the nature referred to in either of the provisions to sub-section (1) of that section, annul or modify such order. An application under sub-section (1) shall be made within(2) six months from the date of the communication to the applicant of the order against which the application is being made : Provided that the Central Government may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the aforesaid period of six months, allow it to be presented within a further period of six months. The Central Government may of its own motion annul or modify(3) any order passed under Section 128 or Section 130. No order enhancing any penalty or fine in lieu of(4) confiscation or confiscating goods of greater v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e erroneously classified under another entry resulting in short-levy of customs duty, or the like. The third is the case of erroneous refund. This category springs up in the process of assessment only where two kinds of errors, i.e., non-levy or short-levy, may occur and lead to an erroneous refund. Since levy is linked to assessment, a case for refund may arise which may be erroneous. These are the three categories of known errors in regard to duties. 15. In Geep Flashlight Industries Ltd. v. Union of India and Others - 1977 (1) SCR 983 = 1983 (13) E.L.T. 1596 (S.C.), this Court had occasion to deal with a case of erroneous refund and while examining the scope of Section 28 of the Act ruled as follows : "The provisions contained in Section 28 of the Act speak of non-levy, short-levy and erroneous refund. The provisions state that notice of non-levy, short-levy or erroneous refund should be given within six months from the relevant date. Section 28(3) states what the `relevant date' means. In the case of duty not levied, the `relevant date' is the date on which the proper officer makes an order for the clearance of the goods. In a case where duty is provisionally assessed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self under that order, in accordance with Geep Flashlight Industries case (supra). It being a case of erroneous refund sub-section (3) of Section 131 was attracted and not sub-section (5) of Section 131 as at that point of time it was not a case of non-levy or short-levy, and these two categories of errors could not be equated with the error of erroneous refund inasmuch as these three categories of errors are treated separately in the scheme of things. Merely because the Central Government had the power to suo moto revise the orders of refund passed by Appellate Collector it does not follow a fortiori that it had the power to revise the orders of short-levy at that stage. The ultimate analysis is that if there was an error of short-levy in the order of the Assistant Collector in classifying goods at A instead of C as claimed by the revenue and not classifying them at B as claimed by the importer, then on the grant of relief by the Appellate Collector classifying them under heading B, can at best give occasion to the Central Government to annul or modify the classification brought under head B, and so as to leave it classified at heading A, but could not have it re-classified under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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