Calcutta High Court
Metallurgical And Engineering ... vs Collector Of Customs, W.B. Customs ... on 18 September, 1991
Equivalent citations: 1992(40)ECC92
JUDGMENT A. K. Sengupta. J. 1. In this reference under Section 130(3) of the Customs Act, 1962 the following questions of law have been referred to this Court: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the claim having been preferred after six months the application for refund was not maintainable and in that view dismissing the appeal? 2. Whether, on the facts and in the circumstances of the case, the Tribunal misdirected itself in law in not directing the authorities to produce the relevant bill of entry to show whether the duty was paid under protest or not and in not considering the bill of entry lying under the custody of Customs Authorities? 3. Whether, the conclusion of the Tribunal that the duty is not proved to have been paid under protest is based on any evidence or material on record and whether such finding is otherwise unreasonable and perverse ? 4. Whether, the finding and conclusions of the Tribunal in absence of the bill of entry, with regard to the question of limitation of the application for refund and consequential dismissal of the appeal are unreasonable and perverse? 2. The brief facts of the applicant's case were that on receipt of the consignment at the Air Cargo Complex an insurance survey was conducted wherein a shortage of 10 small cartons containing 100 reels of magnetic tape cannisters was detected and the opinion of the Surveyor was that they were not shipped in the subject consignment by the consignor's shipping agent. However, the consignment was taken delivery of, on an open appraisement by the Customs Officials and the shortage as referred to was duly recorded on the original copy of the bill of entry, for the consignment. It was also the case of the applicant that the customs duty was paid under protest. Therefore, the time-limit of six months under Section 27 of the Customs Act, 1962 will not apply to the facts of the case. 3. The date of payment of duty was 5th August, 1982 and the date of application for refund made by the applicant was 6th May, 1983. The Assistant Collector of Customs in order No. S109-78/83ARS dated 26th July, 1983 rejected the claim as time-barred. Against that order the applicant preferred an appeal to the Collector (Appeals), Customs House, Calcutta. The learned Collector (Appeals) rejected the above appeal by his order No. Cal-Cus-766/84 dated 19th March, 1984. Against that order the applicant preferred an appeal to the Tribunal in Appeal No. C-100/85 Cal and the Tribunal by its Order No. 43/Cal/1990-43 dated January, 1990 rejected the appeal. 4. It was contended before the Tribunal that the payment of duty was made under protest. But the Tribunal held that there was nothing mentioned in the orders passed by the lower authorities to show that this plea was taken before the authorities. The Tribunal perused the refund application dated 23rd April, 1983 and observed that there was no mention made in the application that the duty was paid under protest. The Tribunal also held that if actually the duty was paid under protest the same would have been mentioned in the refund application. In such circumstances, the Tribunal held that since the application was preferred beyond the period of six months the same was rightly rejected. 5. The main contention which has been urged before us is that the applicant paid the customs duty under protest which would be apparent from the original copies of the bills of entry filed at the time of making the payment of duty. Since these documents were not produced before the Tribunal we directed the department to produce the documents. Pursuant thereto Mr. Sunil Mitra, learned Advocate for the Customs Authorities produced before us a xerox copy of the order sheet dated 17th September, 1991 wherein it has been recorded as follows: Bills of entry in the year 1982 have been destroyed as per manual and Addl. Collector's order dated 10.4.90 in file No. 546-39/99M. 6. The said note has been signed by "AC/MCD/AC/ARS". By consent of the parties the xerox copy of the order sheet is treated as part of this reference. 7. Admittedly, in this case there was a short delivery of the goods imported but the duty was paid on the entire consignment covered by the bills of entry. Accordingly, no duty at all was payable in respect of 10 small cartons containing 100 reels of magnetic tape cannisters which were not imported at all and question of payment of duty on such goods did not and could not arise at all. In our view, apart from the question of limitation it was the duty of the respondent to refund the amount of duty collected on the goods which were not in fact imported at all for whatever reasons. 8. The question of limitation in such a case could not arise and if the duty was levied illegally it was the duty on the part of the Customs Authority to refund the same irrespective of the fact whether such claim was made for refund. 9. From the narration of facts it would be evident that the sole ground on which the application for refund was rejected was that the duty was not paid under protest and such application was made beyond the period of 6 months as provided in Section 27 of the Customs Act, 1962. It appears that before the Tribunal a point was taken by the applicant that the applicant had paid the duty under protest. The Tribunal without looking into the bills of entry wherein the applicant is stated to have recorded the fact that the duty was being paid under protest, wanted the applicant to produce the original refund application and on perusing the refund application the Tribunal was of the view that since in the refund application it was not stated that the duty was paid under protest, the inevitable conclusion is that had the duty been actually paid under protest, the said fact would have been mentioned in the refund application. In our view, the Tribunal proceeded on conjecture and surmise. It was the duty of the Tribunal to look into the originals of the bills of entry relied on by the applicant which could have been produced by the respondent. It has been recorded by the Tribunal that the applicant asserted that such endorsement was made on the reverse of the bills of entry and if the Tribunal had any doubt, the bills of entry should have been called for. The Tribunal records that the departmental representative stated that this being an old matter the same would not be available in the Customs House. As a matter of fact the bills of entry of the year 1982 had been destroyed only on 10th April, 1990 as would appear from the xerox copy of the order sheet which we have referred to earlier. The Tribunal passed an order on 20th January, 1990. The bills of entry were available at that time and it could have been produced by the Department if they wanted to produce the same and if searches were made with due diligence. In our opinion, in either view of the matter the applicant is entitled to succeed. Firstly, because no duty was leviable on the articles under the provisions of Section 12 of the Act as the articles were not imported at all and, accordingly, levy of duty on such articles not imported and not landed at the port of destination is wholly without jurisdiction. 10. In such a case the question of any limitation of claiming refund will not arise. This view will find support in the cases of D. Cawasji & Co. and Ors. v. State of Mysore and Ors., 1978 ELT(J) SC 154 and The Ruby Mills Ltd v. Union of India, 1988 (15) ECR 336 (Bombay). 11. In our view, therefore, where the levy of duty is without jurisdiction and as such illegal, there is no question of limitation involved in the claim of refund and it is the duty of the respondents to make refund of such duty, there is no question of retaining such duty which the authorities were not at all entitled to collect. 12. Secondly, even assuming the application has to be made within the statutory period of limitation, such limitation will not apply if the duty was paid under protest. Section 27 makes it clear that limitation of one year or six months, as the case may be, shall not apply where any duty has been paid under protest. As we have already indicated, the specific case of the applicant is that the duty was paid under protest which would have been evident from the original bills of entry but the said bills of entry, although were available till April 1990, were not produced before the Tribunal and accordingly an adverse presumption has to be drawn against the department that had the documents been produced before the Tribunal, this would have corroborated the statement made by the applicant that the duty had been paid under protest. 13. For the reasons aforesaid, this reference must be allowed. We, therefore, answer the first question in the negative and second and fourth questions in the affirmative and against the Revenue. The first part of the third question is answered in the negative and the second part is answered in the affirmative and against the Revenue. There will be no order as to costs. Shyamal Kumar Sen, J.
14. I agree.