Customs, Excise and Gold Tribunal - Mumbai
Godrej & Boyce Mfg. Co. Ltd. vs Collector Of Customs, Mumbai on 20 April, 2001
ORDER Gowri Shankar, Member (T)
1. Godrej and Boyce Manufacturing Company Limited, the appellant before us, placed an order for two horizontal boring and milling machines. The supplier shipped the goods in 28 cases. Prior to their arrival, the appellant filed the bill of entry for the goods, had them assessed to duty, and paid the duty.
2. One of the 28 cases did not arrive in Bombay. On such short shipment being discovered, the appellant filed a claim for refund of Rs. 1,92,500/- payable on the short-shipped goods. The Assistant Collector of Customs found that the claim which was received on 25.12.1983 was filed beyond six months from the date of payment of duty on 27.4.1983 and dismissed it as barred by limitation under Section 27 of the Act. On appeal from this order the Collector (Appeals), relying upon the decisions of this Tribunal holding that limitation of six months contained in sub-section (1) of Section 27 would not apply to claims for refund of duty paid on goods which were short landed, allowed the appeal and remanded the matter to the Assistant Collector for disposing of the claim on merits. The Assistant Collector, however, did not consider the claim on merits. Relying on the judgment of the Supreme Court in Miles India Vs. Collector he held that the claim was barred by limitation and dismissed it. This decision has been confirmed on appeal by the Collector (Appeals) and apparently, no appeal has been filed against that order. In the meantime, the supplier of the machine supplied to the appellant the goods that were contained in the case initially short landed and the appellant paid on 28.12.1983 duty of Rs. 36.5 lakhs approximately, the duty assessed on it. It thereafter filed on 11th January, 1984 a claim for refund of this duty on the ground that duty on the goods had earlier been paid. This claim was also rejected the on the ground that it was barred by limitation, the duty having been paid on 23.4.1983 i.e., the date on which the duty was paid on the 28 cases comprising the first consignemt. The appeal against this order having dismissed by the Commissioner (Appeals), the appellant is before us now.
3. The Bombay High Court has had occasion to consider the applicability of the limitation contained in Section 27 to claims for refund of duty on goods short shipped in its judgment in Trustees of the Port of Mormugao Vs. Union of India 1993 (68) ELT 69. In that matter, the Board of Trustees had filed a claim for refund of duty which was paid twice, first on a consignment in which goods were short shipped, secondly when the short shipped gods were received. The claim for refund was made after the payment of duty on the second occasion and dismissed by the department on the ground that the refund ought to have been claimed in respect of the duty which was initially paid and not the duty that was paid on the second occasion. One of the contentions that were raised before the High Court was that the claim was barred by limitation. The High Court did not accept this contention. It said, "It is now well settled that in case the duty is recovered in respect of items which are not even imported, then the bar of Section 27 of the Act will not attracted".
4. The claim is made by the departmental representative that the claim for refund now before us is not maintainable, as it relates to the duty that was paid on the second occasion. In the same judgment the Court had held that the claim that was made by the petitioners before it should be treated as an application as an application in respect of the duty that was initially paid. By applying the same principle, the claim that is now made before us should be treated as the claim in respect of the duty that was initially paid. We must also note that once the Collector (Appeals) held that the claim in respect of the duty initially paid not to be barred by limitation it was not open to the Assistant Collector to refuse to follow that order. However, if the department were of the view that order was incorrect the right course would have been to appeal and have it set aside.
5. The ratio of the judgment of the Bombay High Court squarely covers both the issues before us. Being the judgment of the High Court having jurisdiction over the appellant and the respondent Commissioner, it is binding upon us. Accordingly we hold that the refund claim is not barred by limitation and the refund would have to be paid to the appellant.
6. The departmental representative then raises the question that it would have to be shown that refund is paid to the appellant, the requirement contained in sub-section (2) of Section 27 of the Act that the incidence of duty has not been passed on would have to be satisfied. The claim arose because the goods in respect of which the duty was paid never arrived in India. In that situation, there could be no question of incidence of duty being passed on. The importer could not have sold the goods or used them for any other purpose, there being nothing to sell or use.
7. Appeals allowed. Impugned order set aside.