Calcutta High Court
National Insulated Cable Co. Of India ... vs Union Of India (Uoi) And Ors. on 26 August, 1988
Equivalent citations: (1990)1CALLT106(HC)
JUDGMENT Monoranjan Mallick, J.
1. The petitioner is engaged in the manufacture and sale amongst other of electrical insulated cables and owns and operates a factory for its said business at Shamnagar in the district of 24-Parganas, West Bengal. In the manufacture of the said electrical cables the petitioner is required to import from abroad a raw material called 'Kapton Polymide Film' (electrical insulating tape). During the period of February 1984 and January 1986 the petitioner imported diverse quantities of the said Kapton Polymide Film for which the petitioner's clearing house M/s. Reliance Corporation (P) Ltd. had duly submitted relevant bills of entry for home consumption classifying the product under Customs Tariff Heading 39.01/06(1). So far as the counter-vailing duty is concerned the same was kept blank. The Custom Officer at Air Cargo Complex, Dum Dum Airport classified the said articles under heading 39.01/06(1) of the First Schedule to the Custom Tariff Act 1975 and under item 15-A (2) of the Central Excise Tariff and levied Customs duty and counter-vailing duty at the rates prevailing thereunder. The petitioner took clearance of the goods by making payment of the amount as levied and as demanded.
2. In or about the second week of February 1986 the petitioner received a communication in writing from the Assistant Collector of Customs, Air Cargo Complex (Import) whereby the petitioner was informed that the counter-veiling duty has been wrongly assessed at the rate of 50% +5% SPCL on CV under Central Excise Tariff Item No. 15-A (2) in the Bill of Entry A1-774(c) dated 28.9.1985 in respect of the said Kapton Polymide Film (electrical insulating tape) instead of 12% under item 68 and as such petitioner was requested to lodge a refund claim before the Assistant Collector of Customs ARS for excess levy of Rs. 1,79,750.95p. within the statutory period of limitation. A copy of the said letter is annexed as annexure 'A'.
3. The petitioner on being so intimated traced out all his papers and documents regarding the importation of the said Kapton Polymide Film and on or about April 4, 1986 lodged four claims for refund of excess duty paid in respect of consignments covered by Bill of Entries No. 330(cc) dated 14.2.1984, No. 587(cc) dated 28.9.1984, No. 532(cc) dated 19.4.1985 and No. 755(cc) dated 29.7.1985 on the basis of the said intimation within two months of the above intimation. But the aforesaid claims were rejected by a purported order dated April 11, 1986 on the alleged ground that same was time barred. The purported order is, annexed as annexure 'B' and copies of refund claims are marked annexure 'C collectively.
4. Being aggrieved by such refusal the petitioner has moved this Court under its writ jurisdiction.
5. The petitioner states that the Central Excise Authorities have no power or jurisdiction to levy or collect tax without authority of law. Section 12 of the Customs Act while providing for levy of Customs duty circumscribes the limit within which and the rates at which such duty can be levied. Similarly, Section 3 of the Customs Tariff Act 1975 while providing for counterveiling or Additional Duty provides that such duty is to be levied under the appropriate item and the rate set forth in the First Schedule to the Central Excise Act (Now Central Excise Tariff Act). The assessment of duty is not a mechanical process but a quasi-judicial function and the Respondent No. 4 being the assessing authority acted without jurisdiction and/or in excess of jurisdiction in classifying the said Film under Central Excise Tariff item 15-A (2) for the purpose of levying counter-veiling duty although in law and in fact the said goods were liable to be assessed under Tariff item 68 and the respondent Customs Authority has collected a sum of Rs. 7,934.19p., Rs. 64,797.29p., Rs. 1,96,168.59p. and Rs. 3,73,765.77p. in respect of the aforesaid consignments covered by the above mentioned four bills of entry and the same is liable to be quashed by the court in its writ jurisdiction with a direction to make fresh assessment in accordance with law and to refund the excess amount with interest. The purported order of refusal of refund dated 11.4.1986 is bad in law, made without jurisdiction and in excess of jurisdiction and the petitioner is entitled to appropriate reliefs as prayed for in this writ petition.
6. The petitioner submits that as the recovery of excise duty is without authority of law, the government is bound to refund the excess amount of duty within a period of three years from the date of discovery of mistake and the petitioner within two months of the discovery of the mistake applied for refund and is not guilty of any delay and laches and the Respondents have committed a great illegality in rejecting the claim of refund on the purported plea that the prayer for refund is barred under Section 27 of the Customs Act.
7. Respondent No. 3 has alone contested the writ petition by filing an affidavit-in-opposition to which the petitioner has filed an affidavit-in-reply.
8. The contentions of the Respondent No. 3 are as follows :
All the four refund applicantions were received in Appropriate Refund Section after the expiry of the statutory period of six months from the date of payment of duty as prescribed under Section 27 of the Customs Act, 1962 and were therefore rejected as time barred. Admittedly the petitioner was asked to lodge claim of refund before the Assistant Collector of Customs (Refund) in the letter of 11.2.1986 within the time limit of Section 27 of the Customs Act but the said advice of the Assistant Collector of Customs (Import) related to different consignment bearing different particulars other than those which formed part of the present writ petition. Four refund petitions were rightly rejected on a valid and lawful ground of their being made beyond the statutory period of limitation and the order of refusal has been passed in due exercise of the power under the Customs, Act, 1962. The allegations relating to classification of the product involved a fact finding enquiry and question of facts some of which are highly disputed. The Respondent No. 3 denies that the goods ought to have been assessed under Tariff item 68 and that classification has been correctly made under Tariff 15A of the Central Excise Tariff and that no excess recovery in respect of levied amounts mentioned in para 9 of the writ petition and totalling Rs. 6,41,665.84p. have been made by the Customs Deptt. The Respondent also denies that it has been admitted by the Respondents that they have wrongly classified the product covered by the four refund claims under Tariff 15A instead of 68 or that they have realised duty wrongly applying higher rates of duty.
9. In the affidavit-in-reply all the above contentions of the Respondent No. 3 have been refuted by the writ petitioner. It is contended that the consignment for which the refund was allowed was the same consignment, namely, Kapton Polymide Film imported by the petitioner, for which refund applications were made and which were erroneously rejected on the ground that the same were barred by Section 27 of the Customs Act.
10. The first point for decision in this writ petition is whether the Customs authority received excess for the four consignments for which the four refund petitions were filed and for which the Respondent No. 3 passed the order dated 11th April 1986 that the applications for refund is barred by limitation under Section 27 of the Customs Act.
11. Both in the affidavit-in-opposition as well as at the time of hearing it is urged on behalf of the Respondent No. 3 that the Respondent No. 3 does not admit that the excess duty was realised for these four consignments. It is contended that counter-veiling duty under item No. 15A (2) was rightly collected and such payment of duty was duly authorised under item No. 15A(2).
12. On behalf of the petitioner, it is vehemently urged that when by the letter dated 2nd February 1986 the Assistant Collector of Customs, Dum Dum Air Port, Calcutta in respect of the, similar consignment imported under Bill of Entry No. Al-774(c) dated 29.8.1985 intimated the petitioner that the counter-veiling duty under item No. 15A(2) was wrongly assessed and realised and that the counter-veiling duty for the consignment is chargeable under item 68 of the Central Excise Tariff, then the Respondent No. 3 cannot take the plea that the duty for the similar Kapton Polymide Film for which the four refund applications were filed before him and rejected were chargeable under item No. 15A(2) of the Central Excise Tariff. It is also submitted that the refund applications were not rejected on the ground that the counter-veiling duty for these consignment were rightly charged and that there was no excess payment of duty by the petitioner.
13. I am of the view that the contention of the writ petitioner in this respect is quite correct. It is the clear case of the petitioner that the letter of the Assistant Collector of Customs, Dum Dum Airport Division dated 2.2.1986 is in respect of consignment of Kapton Polymide Film and the refund applications were in respect of the same goods imported, namely, Kapton Polymide Film and therefore there could be different assessment of counter-veiling duty for the four consignment for which the four refund applications have been filed and rejected. I am clearly of the view that Customs authority cannot charge different duties for the same consignment imported by different bills of entry and for the similar consignment the similar duty and counter-veiling duty have to be realised and if the Customs authority in respect of one consignment decides that duty is chargeable under item 68 of the Central Excise Tariff, it cannot turn round and say that the stand taken in the letter dated 2nd February 1986 would not apply to other consignments of similar goods imported by the writ petitioner for home consumption. Moreover the Respondent No. 3 rejected the refund applications only on the ground of bar of limitation. He did not take the plea that the refund application was not entertainable because the counter- veiling duty was rightly charged under item 15A(2). So the conclusion is irresistible that writ petitioner has satisfied this Court that the counter- veiling duty for these four consignments imported by it was erroneously charged under Central Excise Tariff item No. 15A(2) and higher duty was charged at 50% plus 5% whereas it was chargeable under item 68 for which duty chargeable is 12%.
14. Second point for decision is whether the petitioner is entitled to get the refund of the excess duty realised by the Respondent by invoking the writ jurisdiction of this Court.
15. The petitioner submits that there are series of decisions to support its claim. It is also contended that when the excess duty was recovered by the Respondents without any authority of law then the writ court can declare such collection of duty as illegal and without authority of law and can command the respondents to assess the duty correctly and to refund the excess amount of duty realised from the assessee. It is also urged that bar of Section 27 of the Customs Act would not stand in the way of the writ court in granting the assessee such relief when the assessee approaches the court within three years from the date of recovery of mistake that he had paid the excess duty. It is the case of the petitioner that it is a case of payment of excess duty by the petitioner by mistake of law, that the said mistake was first detected only when the Assistant Collector of Customs, Dum Dum Airport Division wrote to the petitioner the letter dated 2nd February, 1986 and asked the petitioner to apply for refund in respect of similar consignment imported by some other bill of entry and within two months of such communications the refund application covering the letter of the Customs Officers and also for the four consignments which are subject matter of this petition and for other consignments for which refund applications are still pending were filed but the excess amount which was covered by the letter dated 2.2.1986 was received but the applications for refund for the four consignments which are subject matter of this writ petition have been rejected on the ground that it is barred by limitations under Section 27 of the Customs Act as the applications were filed more than 6 months of the date the payment of duty.
16. The learned Advocate for the petitioner concedes that the Customs officer has to act under the provisions of the Customs Act in order to grant refund and can refuse it on the ground that it is barred under Section 27 of the Customs Act but the writ court can grant the assessee appropriate relief and such relief is granted if the assessee approaches the court within three years of the date of discovery of mistake because under the Indian Limitation Act of 1963 an assessee can file a civil suit for recovery or excess duty paid if the suit is filed within three years from the date of discovery of mistake and what civil court can do the writ court can also' do in its writ jurisdiction as the writ court has also power of refund of excess tax or duty realised by the State authority without any authority of law.
17. On behalf of the Respondent, the decision of Supreme Court in the case of Madras Rubber Factory Ltd. v. Union of India and others, has been cited in which the Supreme Court has held that the Customs authorities did not commit any illegality by rejecting a refund applications filed out of time. But both the division of Calcutta High Court in Incheck Tyres Ltd. v. Assistant Collector of Customs, Refund section, 1987 (27) ELT 614 (Cal) and the division Bench of Madras High Court in Assistant Collector of Customs, Madras and Ors. v. Premraj and Ganpat Raj & Company (P) Ltd., 1978 ELT 63 have rightly held that the said decision of Supreme Court approving the action of the Customs authority rejecting a time barred claim does not decide the wider question of the power of writ court under Article 226 of the constitution to order refund of excess duty realised without any authority of law.
18. It is also to be noted that the decision of the Supreme Court in Madras Rubber Factory Ltd. v. Union of India and others (supra) has been rendered in connection with the appeal filed to Supreme Court against the decision taken in revision by the Central Government under Section 31 of the Customs Act. The revision applications were made in respect of five consignments for which refund applications were filed admittedly after the expiry of the period of six months in each case of the date of payment of the excise duty. The appellants raised various plea as to why the limitation of six months as provided in Section 27(1) of the Customs Act would not be attracted to the case. The Assistant Collector of Customs, did not accept the said contentions and dismissed the case being barred by limitation under Section 27(1) of the Customs Act. There was an appeal to the Appellate Collector of Customs filed under Section 128(1)(b) of the Customs Act which failed. The appellant then moved the Central Government in revision and the Central Government dismissed the revision application. Being aggrieved, the appeals were filed before the Supreme Court after obtaining Special Leave. The Supreme Court in appeal upheld the order of Central Government. Admittedly, in that decision the Supreme Court was not considering as to whether the assessee could claim refund of the excess duty paid by filing a writ application under Article 226 of the Constitution even when such demand applications could be barred under the Special Law of Limitation provided by the Statute.
19. But the main contention of the respondents against the maintainability of the writ petition is that this is not a case in which the counterveiling duty was recovered without any authority of law but a case of irregular assessment of duty because on the own contention of the writ petitioner the counter-veiling duty should have been assessed under item 68 of the Central Excise Tariff whereas it was assessed under item No. 15A(2) and therefore, the bar of limitation of Section 27 was very much attracted and no claim of refund can be awarded by the writ court when such claim is barred under, Section 27(1) of the Customs Act. In support the Division Bench Judgment of this Court reported in Incheck Tyres Company Ltd. v. Assistant Collector of Customs for Refund Section, Calcutta and others, 1987 (27) ELT 614 (Cal) has been cited. It is urged by Mr. Animesh Mitra appearing on behalf of the Respondent No. 3 that the Division Bench of this court in the matter of such irregular assessment of tax in appeal against the order of the trial Judge dismissing the writ application upheld the order of the trial Judge holding as follows :
"Undoubtedly, the bar of limitation of six months laid down by Section 27 of the Customs Act would not apply in case the High Court in its discretion makes an order for refund under Article 226 of the Constitution. But in exercising its power under Article 226 of the Constitution the Court is always guided by well settled principles of law. When a party has chosen to avail of the ordinary remedy provided in the Customs Act for obtaining refund of duty paid by him but the said claim is rejected on the ground of limitation, the court by invoking its power under Article 226 of the Constitution may choose not to lift the said bar of limitation and order refund of the duty. The obligation to pay duty and obligation on the part of the revenue to refund duty wrongly recovered both arise under the statute. When by his own conduct a party has already lost its right to obtain refund under a particular law, the court may not relieve the party of the said statutory bar and grant refund. In other words, by lapse of time a party's right to refund might have been extinguished and it may no longer have any subsisting right to maintain a writ application for enforcement of the same. Similarly, the bar of limitation has taken place and the respondents have no enforceable duty to refund of tax or duty illegally recovered. In ordering or refusing the prayer for refund in exercise of its writ jurisdiction, the court may decline to make an order for payment of money for which there may be other appropriate and adequate remedies and by the party's own laches the remedy had become time barred."
20. Mr. Mitra urges that the facts of the above reported decision is similar to the facts of this case and the facts of the case being exactly similar, this court is bound by the decision of the Division Bench of this court and should not entertain this writ application and dismiss it on the ground that the writ court should not lift the bar of limitation and order refund duty when the obligation to pay the duty and the obligation on the part of the revenue to refund the duty wrongly recovered both arise under the statute and when by virtue of the own conduct of the writ petitioner it has already lost its right to refund under a particular law and thus the court may not relieve the party of the said statutory bar and grant refund as by lapse of time, party's right of refund has been extinguished and he has no longer any subsisting right to maintain a writ application for enforcement of the same and when the bar of limitation has taken place and the respondent authority has no enforceable duty to refund of tax or duty illegally recovered.
21. The learned Advocate for the writ petitioner has relied on some decisions of the Supreme Court and has submitted that the Division Bench of the Calcutta High Court in Incheck Tyres Case has also observed that the writ court can order refund of duty under its writ jurisdiction even though the same is barred by special law of limitation provided in the statute and in view of the facts and circumstances of the case, which are clearly distinguishable from the facts and circumstances of the present case, the Division Bench upheld the order of the learned trial Judge discharging the rule and in refusing to order refund when the claim of refund of duty was rightly rejected by the authorities being barred by limitation. It is submitted that in the Incheck Tyres Case, the writ petitioner knew from the very beginning that the duty was collected under item 28 illegally and that in respect of the two consignments against the assessment of the duty under item 28, the appellant company filed appeals and the Appellate Collector of Customs by his order allowed the said contention of the appellant company that the said consignment were classifiable under item 28(3) and therefore ordered refund of duty. It is also urged that in respect of five other consignment of the similar nature, the appellant company even after preferring the appeal against the assessment of the Customs Authorities under item 28 paid the duty under item 28 without any protest even though the appellant company was fully aware that the proper duty was payable under item 28(3) of the Indian Customs Tariff and that from the beginning the appellant was fully aware that the duty charged was not proper and did neither take any steps to make payment under protest which would have lifted the bar of limitation of six months in view of proviso to sub-section (1) of Section 27 and even the refund applications were filed beyond the period of six months after the payment of the duty and thus the claim was dismissed being barred under Section 27(1) and that the writ court in the facts and circumstances of the case did not wish to interfere with such an order. It is further urged on behalf of the writ petitioner that in this case, the facts are quite different, that writ petitioner did not make any voluntary payment of tax, that in the bills of entry, the column regarding the payment of counter-vailing duty was left blank and the Custom Authorities assessed counter-vailing duty under item 15A(2) and the petitioner paid the duty in good faith and only when the Assistant Collector of Customs, Dum Dum Air Port wrote a letter to the petitioner dated 2.2.86 in respect of the similar consignment that the duty was chargeable under item 68 and offered to refund the excess duty charged in respect of that consignment subject to making of the claim under Section 27, the writ petitioner from the first time discovered that by mistake of law the counter-vailing duty in respect of all the consignments of Kapton Polymide Film imported by the petitioner in between February 1984 and January 1986 was illegally charged under item 15A(2) and then only within two months thereafter the writ petitioner applied for refund stating all these facts and the applications were rejected on the ground that it is barred by limitation. It is however, submitted that the writ petitioner concedes that the Custom Authority who was bound by the statute could not refund the duty if it was barred by limitation but when such duty was charged for the consignments in question not under the proper item it was a case of charging duty without the authority of law and the writ petitioner has definite jurisdiction to order refund if it is found that the petitioner has moved this court promptly after the discovery of the mistake and the refund claim is not barred by Article 113 of the Limitation Act which provides for the limitation of three years to file a suit for recovery of the refund of excess duty paid for which the limitation would begin to run from the date of discovery of mistake under Section 17(1)(c) of the Limitation Act. It is also urged that the contention of Mr. Mitra that the duty recovered in this case is only an irregular recovery of duty and not recovery of duty without the authority of law has no substance.
22. The first decision cited by him is (Shri Vallctbh Glass Works Ltd. and Anr. v. Union of India and others). In this case the goods were classified under item 23A(1) of the Central Excise Tariff whereas the same were actually assessable under item 68. The High Court under Article 226 of the Constitution has held that the appellants paid the duty in excess of what they are bound in law to pay and the claim for refund of duty should be taken as having been established and when even otherwise if the appellant filed a suit within the period of limitation, the excess amount would have been refundable under Section 72 of the Indian Contract Act, the High Court has power for the purpose of enforcement of fundamental and statutory rights to make consequential orders for refund of money realised by Government without the authority of law under Article 226 of the Constitution and this is an alternative remedy provided by the Constitution in addition to but not in supersession of the ordinary remedy by way of suit in the absence of any provisions which bar such a suit either expressly or by necessary implication. The Supreme Court upheld the order of refund in respect of the payment made within the period of three years from the date when the appellants should be deemed to have discovered the mistake that the duty was illegally recovered. In respect of the claim beyond three years, the Supreme Court observed that the appellants were not eligible for reliefs in respect of the payments. The Supreme Court has also observed in the said decision that there is no time limit for filing a writ petition and each case has to be judged on its own facts and circumstances taking into consideration the conduct of the parties the change in the situation, the prejudice that is likely to be caused to the opposite party or the general public. In that decision also the Supreme Court has held that under Section 17(1)(c) of the Limitation Act, 1963, in the case of any suit or application for which a period of limitation is prescribed under the Act, the suit or application for relief from the consequences of a mistake, the period of limitation shall not begin to run until the applicant had discovered it or could have with reasonable deligence discovered it. On considering this decision of the Supreme Court carefully I am of the view the Supreme Court in this decision has recognised the right of writ court to order refund of excess duty paid under a wrong item under mistake of law if such application is filed within a period of three years from the date of discovery of the mistake or from the date when applicant the with due diligence could have discovered the mistake.
23. The other decision of the Supreme Court is reported in 1988(33) ELT 349 (SC) (Salonah Tea Company Ltd. v. Superintendent of Taxes, Nowgong and Ors.). There also the Supreme Court has considered all previous decisions of the Supreme Court and has held that in case of refund of tax collected without any authority of law, the State is liable to refund the said amount and the statutory provision under Special Law providing for refund is in-applicable and the High Court in its writ jurisdiction has power to direct the refund unless there has been avoidable laches on the part of the petitioner. It has also been observed that in some cases the period of three years is normally taken as a period beyond which the court should not grant relief but that is not an inflexiable rule.
24. Another decision of the Supreme Court cited is reported in 1983 ELT 1534 (Union of India v. A. V. Narasimhalu) in which the Division Bench of Supreme Court has held that though civil court has no jurisdiction to entertain a civil suit for refund of excessive or erroneous levy under the Sea Customs Act, yet the High Court is competent to issue writs against illegal exercise of authority by administrative or quasi-judicial tribunal under Article 226 of the Constitution.
25. On behalf of the writ petitioner, the Division Bench judgment of Gujrat High Court in 79 ELT (J 181) (Vijoy Textile v. Union of India) and a decision of single Judge of Calcutta High Court in 1986 (26) ELT 298 (Dilichand Srilal v. Collector of Central Excise and others) have also been cited which decisions, following the Supreme Court decisions, have also reiterated the principles that duty paid under mistake of law is recoverable by invoking writ jurisdiction of High Court, if such writ application is filed within the prescribed period of limitation under the Indian Limitation Act from the date on which the writ petitioner discovered the mistake.
26. In view of the above decisions discussed above and also in view of the observations of the Division Bench of this Court in Incheck Tyres Case there can be no doubt that the bar of limitation of six months laid down in Section 27 of the Customs Act would not apply in case the High Court in its discretion makes an order for refund under Article 226 of the Constitution. The decision of the Supreme Court in 1984(12) ELT 171 (SC) shows that when the excess duty is paid under a wrong item when the duty was chargeable under a different item under which the duty was less, even in such case of refund the writ jurisdiction of the High Court can be invoked when the excess duty is paid under mistake of law and the High Court should not refuse to exercise its jurisdiction if the refund claim is made within the period of fixed by the Indian Limitation Act in respect of recovery of the amount by filing a civil suit in a court of law.
27. I am fully aware that the Division Bench of this Court in Incheck Tyres Case has approved the learned trial Judge's decision refusing to order refund by invoking the writ jurisdiction when the statutory authority considering the refund claim rightly decided that the claim was barred by limitation. But I am of the view that the facts of the case in which the above Division Bench judgment has been rendered are clearly different. In that case the appellant did not take the plea that the excess duty was paid under mistake of law. The facts of that case would clearly reveal that the appellant from the beginning knew that the duty was chargeable under item 28(3) but the Customs authority assessed the duty under item 28 at a higher rate in respect of the two earlier consignments. The appeal was preferred against such assessment and during the pendency of such appeal the duty under item 28 was paid in respect of five subsequent consignments without any protest. If the appellant paid the said duty under protest then the bar of limitation under Section 27(1)(a) of the Customs Act would not have been applicable to his case. But not only the appellant knew fully well that the Customs Authority did not assess the duty under a proper item and paid the duty for five more consignment under item 28 but also there was no impediment in filing refund application within six months from such payment as was provided under Section 27(1) of the Customs Act. Before the Customs Authority the appellant took the plea that it was having a running account with the Customs Authority and the bar of limitation did not apply. It was also contended before the Customs Authority that the payment was made under protest. Both the contentions were negatived by the Customs Authority and the said order of the Customs Authority has been approved in appeal as well as in revision. The appellant in that case never took the plea that under a mistake of law the excess duty was paid and the mistake of law was detected at any point of time subsequent to the date of payment. On the contrary it was clear that at about the time when the duty was paid the appellant was aware that the due was assessed under a wrong item. In this particular case it is the clear case of the petitioner which has not been controverted by the Respondent No. 3 that the column regarding the counter-vailing duty chargeable for the consignments in question was kept blank in the columns of bills of entry and it was the Customs Authority which assessed it under item 15A(2). It is also an admitted position that the Assistant Collector of Customs, Dum Dum Air Port by the letter dated 2.2.86 in respect of some other consignment of Kapton Polymide Film wrote to the petitioner that the countervailing duty was charged erroneously under item 15A(2) whereas it should have been charged under item 68 and offered to refund the excess amount if the application was filed within the period of limitation provided under Section 27 of the Customs Act. It is contended that it is only on receiving such letter the petitioner discovered the mistake of law and within two months thereafter these four refund applications had been filed and it had, promptly applied for refund on coming to know about the mistake. Therefore, I am of the view that the facts of the present case are clearly distinguishable from the facts of the Incheck Tyres case. In this particular case, the petitioner discovered the mistake on receiving the letter of Assistant Collector of Customs, Dum Dum Air Port dated 2.2.86 and promptly thereafter filed the refund application. It is true that the Respondent No. 3 the Assistant Customs Officer could not order refund of the excess dutypaid in view of the bar of Section 27 of the Customs Act but when the writ court is satisfied that the writ petitioner was not guilty of any laches in this matter and promptly applied for refund on discovery of mistake, the writ court should not deny it on the ground that the same cannot be refunded because the claim has been barred by Special Law of Limitation If the writ petitioners were aware from the time when the duty was paid that the duty that paid was not the proper duty and the excess duty was charged then this court should not have exercise its discretion to refund if the authority dismissed the claim on the ground that it was barred by limitation. But when the petitioner under a bona fide mistake paid the excess tax he can get the refund of the tax from this writ Court if the writ petition were filed within 3 years from the date of discovery of mistake, because it is now well settled in such a case the writ court should set aside the order of assessment and can grant the relief of refund of excess duty recovered on setting aside of the assessment of duty. The Customs Officer while assessing a duty under a particular item of excise Tariff performs a quasi-judicial function and when illegally assesses the duty under a different item when the duty was assessable under another item the act of the Customs Officer is definitely without the authority of law. When such payment of duty by the writ petitioner is due to mistake of law, the writ court can entertain the writ petition if he filed the writ petition and claims for recovery of refund within a period of limitation provided under the general law of limitation. In this particular case within two months of the discovery of mistake refund petitioners have been filed and promptly after such refusal by the Respondent No. 3 this writ petition has been filed.
28. It is true that the writ petitioner did not prefer any appeal against the order of the Assistant Collector of Customs but I am of the view that the prosecuting the appeal would have been a fruitless exercise by the writ petitioner because the appellate authority could not also give him any relief when under the Customs Act his claim was admittedly barred by limitation.
29. In the result, I am inclined to hold that the writ petitioner is entitled to the writ of Mandamus commanding the Respondents to make assessment afresh classifying the products under item 68 of the Tariff and refund the amount of excess duty collected in respect of the importation of four consignments of Kapton Polymide Film covered by the four bills of entry which is the subject matter of this present writ petition as specified in paragraph 5 of the writ petition.
30. The writ petitioner has also urged that it is entitled to get interest on the amount of refund. The learned Advocate for the petitioner has cited before me two decisions of this Court reported in 1988(33) ELT 89 Calcutta (Neeraj Newspapers Association (P) Ltd. v. Assistant Collector of Customs and others) and Radheshyam Tulsian v. Collector of Customs and others reported in 1987 (31) ELT 58 Calcutta in which the, learned Single, Judge of this court has directed the refund of the amount of excess duty recovered from the writ petitioner with interest taking the view that interest is the return of compensation for the use or retention of another's money and when the respondents had retained and enjoyed the benefit of such money they were bound to pay interest. In this particular case also the same view can be taken when the Customs Authority had enjoyed the benefit of the excess payment for so long when the Respondents were not entitled to such excess duty, it is fit and proper that the refund be made subject to payment of interest at the rate of 12% per annum.
31. In the result, the writ petition be allowed. Let a writ in the nature of Mandamus in terms of prayer (b) of the writ petition be issued and the Respondents and each one of them be directed to refund the amount of excess duty recovered from the writ petitioner in respect of four consignments in question together with interest at the rate of 12% per annum from the date of the payment till the date of such refund. Respondents shall do the above within one month of this date. There shall be no order as to costs. All parties shall act on the signed copy of the operative portion of the judgment.