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TMI Blog1963 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... in May 1959. These goods were also duly assessed to customs duty and the Petitioners paid the duty assessed and cleared these goods. The Petitioners made refund applications in respect of the duty paid by them in connection with these last diverse goods of import within the time prescribed under Section 40 of the Act. The particulars about the dates of arrival of the goods and the Bills of Entry in respect of these goods as well as the dates of refund applications made by the Petitioners and the amounts sanctioned for repayment in respect of the above refund applications are all contained in the statement enclosed with the letter of the Assistant Collector of Customs dated July 28, 1962. A copy of the letter of the Assistant Collector of Customs dated July 28, 1962, along with the enclosed statement is annexed as Ex. C to the petition. Though the aggregate amount claimed by the Petitioners in their refund applications was very large, the refund was sanctioned for the aggregate sum of Rs. 28,388.21 nP as appears from the above letter of the Assistant Collector of Customs dated July 28, 1962. In connection with the consignment of the precision brass tubes or evaporators which the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er relevant sections of the Sea Customs Act, the Customs authorities had no power to reopen the final adjustment to customs duty that had been already made in respect of the consignment of brass tubes except as provided in Section 39 of the Act. The true effect of that section is that no short levy assessment can ever be made beyond the period of 3 months from the relevant date mentioned in the section. The contention is that the final assessment having been made in respect of the consignment of brass tubes in March 1958, it was not permissible for the Customs authorities, having regard to the scheme of Section 39, to make re-assessment of the Petitioners' goods for assessing them to less charges or short levy in December 1958 as the Respondents had purported to do. This is so, because the period of 3 months from the relevant date mentioned in the section had expired sometime before the end of June 1958. In connection with this contention, it is necessary to refer to Section 39 of the Act, which runs as follows :— "39. (1) When customs-duties or charges have not been levied or have been short-levied through inadvertence, error, collusion or misconstruction on the part of the offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Customs authorities in connection with the real value of the goods. He is also empowered to open cases, packages and parcels, if necessary. Section 29B provides for provisional assessment of goods in accordance with the scheme of that section. It is necessary to note that this is the only section which contains scheme as regards provisional assessment of duty in respect of goods of import permitting the Customs authorities to make final assessment of duty subsequently. The Scheme of the Act is that in respect of the goods which are not provisionally assessed the Customs authorities make final assessment as regards the customs duty payable by importers and exporters and upon payment the goods are cleared from the Customs limits. Section 39 is the only section which provides for remedies of the Customs authorities in connection with claims for customs duties or charges short levied through inadvertence, error, collusion or misconstruction on the part of the officers of the customs or even through mis-statement as to the real value, quantity or description on the part of the owner. 5.It is clear on a reading of the scheme of Section 39 and the general scheme of the Act that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such person has been given a reasonable opportunity of making a representation against the proposed order. (2) ……. (3) …….". 7.Though the period of 3 months as mentioned in section 39 had expired, relying upon the provisions of section 190A, the customs authorities served notice on the Respondents in the Court of appeal that their consignments had been short levied to duty and refunds had been wrongly made in the amount mentioned at the foot of the notice. They were called upon to show cause as to why the amount refunded should not be recovered from them. 8.The Respondents-Appellants challenged the notice as being contrary to the scheme of Section 39. Sinha J. in the first Court (Nihal Chand v. S. Venkatesan, A.I.R. 1960 Cal. 413) and Bose C. J. in the Court of appeal in the case which I am referring to (S. Venkatesan v. Nihalchand, A.I.R. 1962 Cal. 258), inter alia, observed as follows : "It seems clear that when Customs duty, after having been levied, has been erroneously refunded owing to one or other of the causes mentioned in section 39, the person to whom such refund has been erroneously made shall repay the amount on a notice of demand being issued to him within thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the brass tubes' consignment of the Petitioners at 10 percent under item 72(23)/72(25) of the Indian Customs Tariff. According to him, in fact, these goods were assessable to pay Customs duty on the basis of item 70(a) of the Indian Customs Tariff at 35% of the value. His further argument is that as subsequent to the final assessment made the customs authorities discovered the mistake, the short levied duty becomes a debt payable by the Petitioners to the Customs authorities. This argument, in my view, completely overlooks the scheme of all fiscal statutes. The nominated authorities under these statutes are the only individuals, who, for the first time, by assessment proceedings, find out the debt payable by way of tax. The scheme of the Sea Customs Act is that once such final assessment is made by appropriate authorities, it cannot be revised in any manner except in accordance with the scheme of the Act. There can be no debt by way of short levied duty in respect of the goods once finally assessed except in accordance with the provisions of Section 39 of the Act. In other words, once the 3 months' period mentioned in the section expires, nothing can become payable by way of sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of Customs was illegal and without jurisdiction. I see no reason why in such circumstances it is not permissible for me to make incidental order for payment of money. 13.Mr. Modi has also argued that the claim of the Petitioners for payment of refund was in fact barred by the law of limitation before this petition was filed and for that reason the order for payment should not be made in favour of the Petitioners. He has, in that connection, pointed out from the statement enclosed with the letter of the Asst. Collector of Customs dated July, 28, 1962, copy whereof is annexed as Ex. C to the petition, that the 8 refund applications (out of 9) for repayment were all made on Sept. 29, 1958, and that the remaining one refund application was made on July 29, 1959. The refund, therefore, had become due prior to the above dates. According to him, therefore, the claim made in Court for granting refund is beyond a period of 3 years and must be held to be barred by the law of limitation. This contention appears to me to be untenable. Now, it is well established that the Sea Customs Act is a complete code providing complete scheme for all matters arising under the Act. When excess amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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