Customs, Excise and Gold Tribunal - Delhi
Nanavati And Co. Pvt. Ltd. vs Collector Of Customs on 29 January, 1983
Equivalent citations: 1983ECR360D(TRI.-DELHI), 1983(12)ELT839(TRI-DEL)
ORDER H.R. Syiem, Member (T)
1. The appeal filed by M/s Nanavati & Co. Pvt. Ltd. rests mainly on the claim that the rejection of their refund claim by the Assistant Collector, Refund Department, Bombay and by the Appellate Collector of Customs, Bombay on the ground of time bar under Section 27 of the Customs Act, 1962 was wrong. The appellants argue that the goods imported by them 'Oleyl Cetyl Alcohol' was exempted from countervailing duty by notification No. 48-Customs, dated 1-3-79. They argue that by reason of the exemption notification, the goods were totally exempted from additional customs duty popularly known as countervailing duty and that therefore the assessment to such customs duty was an exercise of power beyond the jurisdiction of the assessing officer. Therefore, the time-limit of 6 months under Section 27 of the Customs Act should not apply and that the time-limit of 3 years under the general law of limitation should apply instead. In general, the firm maintains that assessments made in excess of jurisdiction should not be hit by the time-bar of the Customs Act.
2. We are unable to accept this claim. The operation of the time-bar has been held to be operable in a judgment of the Supreme Court in AIR 1976 SC 638 M/s. Madras Rubber Factory v. Union of India and Ors.. Madras Rubber Factory had imported Pyratex Vinyl Pyridine Latex for the manufacture of rubber tyres and tubes. Customs duty on the latex was assessed and levied under Item 67 of the Indian Tariff Act, 1934. The importers claim that duty should have been charged under Item 39 of the Tariff. After the importation, Madras Rubber Factory filed an application under Section 27 of the Customs Act to the Assistant Collector of Customs and claimed refund of duty charged in excess. These refund claims were late and were barred by limitation prescribed by this section. The Supreme Court ruled that the rejection by the Customs authorities of the claims of refund as time-bar were not incorrect and therefore dismissed the appeal. We can see from this that the Supreme Court has held in this case the time-bar under Section 27 of the Customs Act is applicable even when the assessment and collection of duty was made in a manner the appellants charged was not in accordance with the jurisdiction of the Customs authorities.
3. Section 27 of the Customs Act reads as follow :
"CLAIM FOR REFUND OF DUTY-(1) Any person claiming refund of any duty paid by him in pursuance of an order of assessment made by an officer of Customs lower in rank than an Assistant Collector of Customs may make an application for refund of such duty to the Assistant Collector of Customs-
(a) in the case of any import made by any individual for his personal use or by Govt. or by any educational, research or charitable institution or hospital, before the expiry of one year ;
(b) in any other case, before the expiry of 6 months, from the date of payment of duty ;
Provided that the limitation of one year or six months, as the case may be, shall not apply where any duty has been paid under protest.
Explanation.-(1) Where any duty is paid provisionally under Section 18, the period of one year or six months, as the case may be, shall be computed from the date of adjustment of duty after the final assessment thereof.
(2) If on receipt of any such application the Assistant Collector of Customs is satisfied that the whole or any part of the duty paid by the applicant should be refunded to him, he may make an order accordingly.
(3) Where, as a result of any order passed in appeal or revision under this Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in this behalf.
(4) Save as provided in Section 26, no claim for refund of any duty shall be entertained except in accordance with the provisions of this section."
This section deals with "refund of any duty" paid by an importer in pursuance of an order of assessment made by an officer of customs lower in rank than an Assistant Collector of Customs. It does not distinguish between one kind of duty and another kind of duty as sought to be made by the appellant who says that duty paid as a result of assessment made in excess of jurisdiction and different from duty paid under an assessment made within that jurisdiction. The section covers all claims of refund of any sums of money paid as duty by an importer. It is noteworthy that Sub-section (4) specifically prohibits entertainment of any claim of refund except in accordance with the provision of this section (except to the extent provided in Section 26 which deals with refund of export duty in certain cases). It is not clear to us why the duty paid to have been paid as a result of an exercise of power in excess of jurisdiction by an officer should enjoy a status different from other wrong assesssments and recoveries of duty. If there is such a distinction we are unable to see it. All moneys paid as duty whether in exercise of jurisdiction or not are governed by the same limitation of law. The appellants' grounds for claiming that this was an exercise of power in excess of jurisdiction by the assessing officer is because the goods imported by them i.e. 'Oleyl Cetyl Alcohol' was totally exempted by notification 45-Cus., dated 1-3-79 and that therefore no additional duty under Item 68, Central Excise Tariff would be leviable and in case an officer of customs levies such countervailing duty, he would be conferring on himself a jurisdiction which he did not have. But the same thing can be said of a case where an officer assesses and recovers duty at a rate higher than the one at which the goods are correctly assessable e.g. the assessing officer may assess duty at 50% when the correct rate was 20%. Here also he is assessing the goods by exercising a jurisdiction he did not have because nobody can say that there was jurisdiction to assess the goods at 50% when the law conferred a jurisdiction of only 20%. All wrong assessments therefore are exercises of power in excess of jurisdiction whether the wrong assessment is the result of applying a higher rate in place of a lower rate of duty or is the result of levying a duty when none was leviable either by virtue of an exemption notification or because the goods were not taxable. If we proceed on the logic of the appellants, we would have a situation where Section 27 of the Customs Act becomes a nullity and all refund claims would be governed not by the law of limitation of the Customs Act but some other limitation. We have seen that no distinction is made in the Act between one kind of excess payment and another. As a matter of fact the section itself expressly forbids refund of duty if the claim is not in accordance with the section. The Supreme Court itself has upheld the validity of the limitation on refund claims imposed by the Customs Act and indeed we can see no rational grounds for importing the limitations of other statute like the Limitation Act or the Contract Act when the Customs Act provides for such a limitation for such specific purposes. It would be a different thing if the Customs Act did not itself provide a limitation period for refund claims to be made ; in such an event there is a case for saying the general law of the land should prevail. The Customs Act is a self-contained law to govern and regulate the functions of Customs from the collection and assessment of customs duty to the punishment of breaches of its provisions. It details a large number of processes and injunctions that are aimed at the smooth flow of customs business such as clearances, declarations, documentations, adjudications, appeals and so on and so forth. For example, it provides a time-limit within which appeals can be filed, but no one has ever demanded that this time-limit should be according to some other statute. If the framers of the law wanted that the time-limit for refund claims should be governed by the general law of limitation, nothing prevented them from making a provision to such effect. If they did not do so but kept a time-limit in the customs statute itself, then we are satisfied that is the limit they want to be observed. We see no reason why the time-limit of Section 27 of the Customs Act should yield to the time-limit of some other Act.
4. We, therefore, have no hesitation in rejecting the appeal.
5. We should like to dwell briefly on the Appellate Collector's discussion of the case when the matter came before him. In his order dated 30-8-80, he came to the conclusion that excess of jurisdiction can be canvassed in a case like this only when the subject goods were not assessable to Central Excise duties when produced in India, because in such a case the law would not confer any liability of such goods to excise duties and correspondingly there can be no levy of countervailing duty under the Customs Tariff Act of 1975. The case of the appellant was that similar goods produced in India would have been assessable to excise duty but that when such goods are imported from abroad, the countervailing customs duty was exempted on such imported goods. The Appellate Collector was of the opinion that since the exemption was only to the countervailing customs duty and not to the Central Excise duty as such, there was no excess of jurisdiction in the assessment to countervailing duty and the plea was liable to rejection. We are unable to agree with this view. A wrong assessment, for whatever reason, is a wrong assessment ; whether, as in this case, it arose because the goods were exempted under Central Excise laws from levy under Item 68 of the Central Excise Tariff, the assessment would have been wrong and a claim for refund could arise, we cannot accept that the plea of exercise of powers in excess of jurisdiction can be upheld in one case and not in the other. Whatever the nature of exemption, the levy to duty is the exercise of one and the same jurisdiction and consequently the error in jurisdiction is the same. As we have already observed above all sums of money claimed as refund by importers attract the time-bar of the Customs Act and there is no way by which this time-bar can be avoided whatever the reason for the wrong assessments.
M. Gouri Shankar Murthy
6. While I agree with the conclusion of my learned brothers, I feel impelled to place on record certain propositions of law which had, over the year, become axiomatic.
7. Absence of jurisdiction ab-initio manifests itself when-
(a) any of the relevant provisions of the enactment in question is ultra-vires or declared to be ultravires;
(b) any error as to a collateral fact was committed whereby the jurisdiction was assumed; or
(c) the levy exceeds the constitutional ceiling or limit.
8. Where, indisputably, the Customs authorities had jurisdiction to assess the goods of the Appellant and determine the duty and such jurisdiction inheres in the assessing officer to start with, or in other words, a quasi-judicial authority has jurisdiction to dicide the matter, it is not lost merely on coming to a wrong conclusion whether in law or on facts (A.I.R. 1962 S.C. 1621- Ujjambai v. State of U.P. and Anr..).
9. A quasi-judicial authority like, for example, the Customs officer, acts in excess of jurisdiction when the assessment made by him is incompetent or in disregard of the conditions laid down by the statute for the exericise of the jurisdiction or if the assessment is based on extraneous considerations or in bad faith or in violation of the principles of natural justice. It is not as if a quasi-judicial authority exceeds its jurisdiction by deciding in good faith and in conformity with the principles of natural justice an issue that it is empowered to determine.
10. In A.V. Narasimhalu's case. (1969)2 SCWR 446], the Supreme Court had occasion to reiterate these and other propositions defining the limits of the jurisdiction of Civil Courts in cases where the jurisdiction is absent ab-initio or where the action of the quasi-judicial authority is in excess of jurisdiction. It was held, inter alia, that-
(a) where the act is a complete code dealing with liability to pay duty and for obtaining relief against excessive or erroneous levy and other related matters, the jurisdiction of a civil court to entertain a suit on the ground that the duty was improperly or illegally levied is excluded;
(b) it would not be open in all situations where a party who had right to appeal to refuse to resort to the procedure prescribed by the statute and to file a suit ;
(c) civil courts have, however, jurisdiction to examine only cases in which-
(i) the provisions of the statute had not been complied with by the assessing authority ; or
(ii) such authority did not act in conformity with fundamental principles of judicial procedure or in violation of such principles ; or
(iii) an order is made which is not within the compstence of the assessing authority ; or
(iv) the statute which imposes the liability is itself unconstitutional ; or
(v) the order of assessment is alleged to be malafide.
(d) the exclusion of the jurisdiction of the civil court does not also imply the exclusion of the jurisdiction of the High Court to issue high prerogative writs against the illegal exercise of authority by administrative or quasi-judicial tribunals ;
(e) an erroneous decision of an assessing authority cannot be said to, be reached without jurisdiction merely because it may be shown in some collateral proceedings to be wrong.
10. When the jurisdiction of a civil court, as distinguished from quasi-judicial authority under the statute, is invoked in a suit either on account of absence of jurisdiction ab-initio or acting in excess of jurisdiction, it is not the limitation prescribed in the statute that will be applicable to such an action but the general law of Limitation. So also where the suit is laid on the basis of mistake in payment of duty not leviable [A.I.R. 1959 S.C. 135 -Sales Tax Officer, Benaras v. Kaniahalal Mukandlal Saraf].
11. The statutory provision prescribing a period of limitation is strictly applicable to proceedings under the statute only, that is to say, where the quasi-judicial authority created in terms of the statute is not without jurisdiction ab-initio or has not acted in excess of it. In other words, where the erroneous determination of the duty payable did not result from either want of jurisdiction or acting in excess of jurisdiction, the period of limitation prescribed in the relevant statute will govern the proceedings.
12. It would appear in the instant case, the question determined by the assessing officer was in relation to the eligibility of the import by the Appellant to an exemption Notification No. 48-Cus. dated 1-3-1979. The quasi-judicial authority has, indisputably, jurisdiction to determine the question of such eligibility. Nor does he exceed the jurisdiction if the exercise of such jurisdiction was neither incompetent nor in bad faith, nor in violation of the principles of natural justice.
13. In A.I.R. 1976 S.C. 638 (Madras Rubber Factory v. Union of India) it had been categorically held that the application for refund of duty charged in excess beyond the statutory period of limitation prescribed under Section 27 of the Customs Act, 1962 is barred and hence rightly rejected. It is not, however, a case where it has been urged either that the assessment was without jurisdiction or in excess of jurisdiction.
14. Further, having applied under Section 27 of the Customs Act for refund, it is futile for the Appellant to contend that the period of limitation prescribed therein is inapplicable. Obviously, the Appellant cannot have it both ways.