Customs, Excise and Gold Tribunal - Delhi
Shama Engine Valves Ltd. vs Collector Of Customs on 31 August, 1988
Equivalent citations: 1989(19)ECC212, 1988(19)ECR561(TRI.-DELHI), 1988(38)ELT181(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. Being dissatisfied with the rejection of the refund claim the appellants' company have filed the instant appeal.
2. Factual backdrop : It is the case of the appellants that they exported Engine Valves to M/s. Longson (Fe) Pte. Ltd., Singapore but the exporters in Singapore could not pay and honour the documents with the result the appellants have to re-import the 22 cases of Engine Valves. On re-importation the appellants paid the duty and cleared the goods. It is their further case that since the duty was not payable they lodged the claim for the refund of the duty with the Assistant Collector of Customs, Refund Department, Bombay. However he rejected the refund claim as barred by time under Section 27 of the Customs Act, 1962 being received after the expiry of 6 months from the date of payment of duty. Being dissatisfied, the appellants filed their appeal against the said Order of the Assistant Collector rejecting the claim as time barred, but without success. Hence the present appeal.
3. Shri D.N. Mehta, learned counsel for the appellants contended that since the goods were of Indian origin and were re-imported in India, Customs duty was not leviable and therefore, their Customs House Agents M/s. S.K. Paul & Co. (CHA), Bombay vide their letter dated 18-7-1981 requested that "as the goods are going back to factory the duty please may not be charged on the subject consignment" but the Appraising Officer submitted the learned counsel for the appellants, advised them to pay duty first and drew our attention to the said original letter dated 18-7-1981 which the appellants had filed alongwith their appeal in the Tribunal. On this premises Shri Mehta contended that it should be held that the duty was paid under protest and therefore the time limit of 6 months prescribed under Section 27 of the Customs Act, 1962 would not be applicable. Shri Mehta, learned counsel for the appellants also submitted that after the payment of duty, the goods were cleared and taken into the factory of the appellants under D-3 procedure of Central Excise and the goods on arrival in the factory were verified by the Central Excise Inspector on 7-1 -1982 and therefore the period of 6 months prescribed under Section 27 should be counted from 7-1-1982 when the goods were arrived in the factory and were verified by the Central Excise Inspector. And if so, counted, the refund claim which was sent to the Refund Department on 16-4-1982, i.e. within 3 months of the arrival of goods in the factory, would be within time.
4. In reply Shri K. Kumar, learned SDR while supporting the impugned order submitted that the plea that the duty was paid under protest was not advanced before the Assistant Collector and it appears that for the first time the appellants produced the said letter dated 18-7-1981 before the Collector of Customs (Appeals), Bombay. He emphasised that even in the said letter a simple request not to charge the duty was made before the clearance of the goods and therefore the Collector (Appeals) rightly held that the said letter alone cannot be considered as "duty paid under protest" for the purpose of Section 27 of the Customs Act. He further submitted that according to Section 27 of the Customs Act limitation starts from the date of the payment of duty and not from the date of the goods going to the factory.
5. Before the proceed to consider the arguments so advanced by the parties it would be useful to advert to the provisions of Section 27 of the Customs Act. The said Section so far as relevant for the controversy in hand reads thus -
"27. 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)....;
(b) in any other case, before the expiry of six 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."
6. From a plain reading of the said provisions it is clear that any person claiming refund of any duty paid by him in pursuance of an order of assessment may make an application for refund of such duty before the expiry of six months and the limitation commences from the date of payment of duty. Provided that the limitation of six months shall not apply where any duty has been paid under protest.
7. In the light of the aforesaid provisions we proceed to examine the contentions raised by the learned counsel for the appellants. First contention of the learned counsel for the appellants that the duty was paid under protest cannot be accepted. Besides the fact that the plea that the duty was paid under protest was not raised before the Assistant Collector, we find that the said letter dated 18-7-1981 cannot constitute as "duty paid under protest". The said letter reads as follows :-
"OUR REF: GEN/81/278 Date: 18/7/81
The Assistant Collector of Customs, Import Department,
New Customs House, Ballard Estate,
Bombay - 400 038.
Sub : Reimport of 22 cases of Diesel Engine Port Vide IGM No. 571, Line No. 53.
Dear Sirs,
We have been instructed by M/s. Shama Engine Valves Ltd. to send the subject cases to their Bhopal factory after clearance.
As the goods are going back to factory the duty please may not be charged on the subject consignment. Necessary proofs, regarding goods taken back into the factory will be produced.
Thanking you, Yours faithfully, for S.K. PAUL & CO. (CHA) lllegible Sd/-x-x-x-x-x"
On the said letter the following hand written remark appears :-
"PI. pay the duty first"
Sd/-x-x-x-x-x-
(lllegible) 21-7-1981"
8. From the said letter it is clear that before the clearance of the goods a simple request was made by the Customs House Agents on behalf of the appellants that as the goods are going back to the factory the duty please may not be charged. Thus by no stretch of imagination it can be said that the duty was paid under protest. In the case of Incheck Tyres Ltd. v. Union of India, 1978 ELT (J 643) it was held by the Hon'ble Calcutta High Court that for taking the benefit of the proviso to Section 27 of the Customs Act it is necessary to lodge protest in clear terms that the payment was made under protest. As regards the contention of the learned counsel for the appellants that the duty was paid as per the remark of the Appraising Officer appearing on the said letter to the effect that "please pay the duty first", it is significant to note that besides the fact that it is not clear as to who recorded the said remark, the duty was paid after two days of the said remark i.e. to say on 23-7-1981 vide Bill of Entry Cash No. 5684, dated 23-7-1981 and at the time of payment of duty no protest was lodged and it appears that the appellants voluntarily paid the duty. Even otherwise if the contention of the learned counsel for the appellants that the duty was paid as per remark of the Appraising Officer is accepted for the safe of arguments, the case of the appellants does not advance further because in that case it may be said at the most in favour of the appellants that the payment of duty was made not voluntarily but involuntarily. For, involuntary payment and payment under protest are not the same thing and for claiming the benefit of the proviso to Section 27 it is not enough that the payment of duty was made involuntarily. In our view it is also necessary to lodge protest in clear terms that the payment was made not only involuntarily but under protest. In a nutshell every involuntary payment cannot be held payment under protest within the meaning of proviso to Section 27 of the Customs Act. In this connection the weighty observations made by the Hon'ble Calcutta High Court in the case of Inchek Tyres Ltd. v. U.O.I., supra, may be reproduced with advantage which runs thus -
"In my view, until the payment is made under protest explicitly, there is no scope to infer from circumstance that the petitioner had paid the duty in respect of other consignments under protest so as to entitle the petitioner to get the benefit of the proviso to Section 27 of the Customs Act. It is not enough to proceed on the footing that there is no liability to pay the duty in question and because of illegal demand involuntary payment was made. In my view, it is also necessary to lodge protest in clear terms that the payment was made not only involuntarily but under protest. Involuntary payment and payment under protest are not the same thing. For imposition of unjust duty one may be compelled to make payment and such payment will then be involuntary but every involuntary payment cannot be held payment under protest within the meaning of proviso to Section 27 of the Customs Act."
9. As regards the other contention of the learned counsel for the appellants that the time limit of six months as prescribed under Section 27 of the Customs Act that an application for refund of duty must be made before the expiry of six months from the date of payment of duty the contention of the learned counsel for the appellants cannot be accepted.
10. In the result the appeal is dismissed.