Customs, Excise and Gold Tribunal - Delhi
Jai Hind Oil Mills Co. vs Collector Of Customs on 27 January, 1987
Equivalent citations: 1987(12)ECR339(TRI.-DELHI), 1987(28)ELT507(TRI-DEL)
ORDER I.J. Rao, Member (T)
1. The appellants imported under a Bill of Entry No. 4026 dated 12-3-81, 'Crude Stearine'. They cleared the same on payment of duty. According to the appellants, a post-importation test of the oil by M/s. Tata Oil Mills Company Ltd. - the buyers - showed that the moisture in the imported 'Stearine' was 16% whereas the contract between them and the buyers was for a maximum moisture & impurities of 1% only. The appellants say that on 15-5--81, they sent by post a refund application to the Assistant Collector of Customs, Cochin, requesting refund of duty paid by them on the moisture content in the imported consignment. According to them, they sent a reminder to the refund application on 5-3-82. By an order dated 17-7-82, the . Assistant Collector of Customs, Cochin, rejected their claim on the ground that duty was paid by the importers on 12-3-81 whereas the reminder for the appellants' refund claim was received only on 5-3-82, i.e., after the expiry 6f six months' time-limit prescribed under Section 27(1)(b) of the Customs Act, 1962. The Assistant Collector further recorded in his order that "Their (the appellants') claim of refund, dated 15-5-81, stated to have been posted with a certificate-of-posting dated 15-5-81, has not been received in this Customs House."
2. The appellants filed an appeal before the Appellate Collector. The Appellate Collector rejected the claim holding that there is no evidence to show that the refund application was received by the Assistant Collector within the time-limit stipulated under Section 27(1) of the Customs Act, 1962. He further examined the other grounds raised by the appellants and rejected the same. Hence, the present appeal before us.
3. Shri M.A. Rangaswamy and Miss Radha Rangaswamy, Advocates appearing for the appellants, submitted that, in this case, the appellants have produced a certificate-of-posting dated 15-5-81 to show that they had filed the refund application in time. It was argued that there was a presumption available to the appellants that the refund application was so filed, and that this presumption cannot be rebutted by mere denial, according to the provisions of Section 114 of the Evidence Act. Shri Rangaswamy argued that it must be presumed that the refund application reached the Assistant Collector. He further argued that there was no challenge made to the appellants regarding receipt of the refund claim, and pointed out that the order-in-original treats as if there has been a claim. Further, according to Shri Rangaswamy, the refund claim was rejected without a show-cause notice which, though not a statutory obligation, is an accepted practice in terms of the principles of natural justice. He further submitted that the appellants were not given a personal hearing and, in support of his arguments, cited the case of 'Indian Transformers Ltd. v. Assistant Collector and Anr. reported in '1983 ELT 2293 (Ker.)'. He further cited illustration (f) to Section 114 of the Evidence Act to reiterate his argument that it should be presumed that the refund application had reached the Assistant Collector inasmuch as it was sent properly by post. He cited the case of 'O.P. Behl v. A.K. Shrof', reported in 'AIR 1939 (Del.) 39', to support his arguments about rebuttal of the presumption regarding delivery of the letter. In this context, he also cited the case of 'Sm. Hemangini Dassee v. Sm. Sarnalatika Dassee' reported in 'AIR 1940 Calcutta 227', and the case of 'Jitendra Nath Das v. Bijoy Lal Das' reported in 'AIR 1976 Calcutta 478'.
4. A further argument of Shri Rangaswamy was that the Collector of Customs (Appeals) (hereinafter, referred to as the 'Collector') went into the merits of the case and that in view of this, the matter should be considered on merits. With regards to the limitation provided in Section 27, the learned Counsel argued that the law of limitation applies to Customs Act according to a 'Three-Judges' decision in the case of 'The Khadya Peya Vikarate Malak Sangh v. The Chief Officer, Sangli Municipal Council and another' reported in 'AIR 1977 Supreme Court 527' and Article 265 of the Constitution of India. He further cited a judgement in the case of 'Union of India and Ors. v. Godfrey Philips India Ltd.' reported in 1985 (22) ELT 306 (S.C.) and submitted that a 'Three-Judges' decision would prevail over a decision by a lesser number of judges. Shri Rangaswamy, in sum, argued that the refund application should be presumed to have been received by the Assistant Collector in time, and even if it was not, the law of limitation must be applied.
5. Shri G.V. Naik, the learned Jt. CDR, opposing the argument, submitted that the certificate-of-posting, a copy of which has been filed before us, does not indicate the name of the sending party nor does it indicate the contents of the letter. He further argued that it should be presumed that the Assistant Collector - a quasi judicial authority - verified the Customs House records before recording in his adjudication order that the refund application, stated to have been sent by the appellants, did not reach the Customs House. He strongly opposed the arguments of the learned Counsel for the appellants to the effect that no personal hearing was given to the appellants before the Assistant Collector. He invited our attention to the contents of the 'memo of appeal' before the Collector wherein the appellant himself stated that a personal hearing was granted to him. Shri Naik submitted that the argument of the Counsel was a mis-statement.
6. Shri Naik further argued that Section 27 of the Customs Act, 1962 provides that an application for refund has to be made to the Assistant Collector, and this would imply that such an application must reach the Assistant Collector. He invited our attention to Section 27(2) of the Customs Act and submitted that the question of further action would arise only on receipt of such an application by the Assistant Collector. He referred to the two Illustrations (e) under Section 114 of the Evidence Act to justify the finding of the Assistant Collector regarding non-receipt of the application.
7. Shri Naik submitted that the Supreme Court decision in the case of 'Miles India Ltd. v. Union of India and Ors.' reported in '1985 ECR 289 (S.C.)', has made it clear that the Departmental authorities are bound by the limitation provided in the Customs Act and submitted that the law of limitation does not apply to Customs Act. In this context, he cited the case of 'SAKURU v. TANAJI' reported in '1985 (22) ELT 327 (S.C.)'.
8. Shri Rangaswamy, in his rejoinder, argued that a certificate-of-posting does not have provision to indicate the sender, and the sender's name is given on the envelope. Regarding contents, Shri Rangaswamy submitted that, even if a letter is sent by registered post, there is no indication . of the contents. Referring to Illustration (e) under Section 114 of the Evidence Act, Shri Rangaswamy argued that the Assistant Collector should have taken proper action, in accordance with law, by way of inquiry in the Customs House regarding receipt of the refund claim, and this was not done. Shri Rangaswamy insisted that no personal hearing was given and only an interview was given and, in this context, he referred to the copy of the letter dated 15-7-82, written on behalf of the appellants to the Assistant Collector of Customs, Cochin. He finally submitted that the decision in 'A.I.R. 1977 (S.C.) 527' prevails over the case law cited by Shri Naik.
9. We have considered the arguments of both sides. The question, whether the law of limitation is applicable to proceedings before the quasi-judicial authority, would arise only if it is proved that there was a refund application before the Assistant Collector, or if it is proved that there is a ground to presume that there is such a refund application. Also, it has to be decided first whether the order passed by the Assistant Collector suffers from the failure of the principles of natural justice. If it so suffers, the other arguments advanced by both sides would be redundant.
10. The learned Advocate for the appellant stated, and reiterated, that there was no hearing given by the Assistant Collector before the refund application was rejected. In this context, we have examined the memo of appeal to which our attention was drawn by Revenue. We find that in the memo of appeal (before the Collector), there is no ground to the effect that principles of natural justice were violated by the Assistant Collector by not extending a personal hearing to the appellants. On the other hand, the following sentence in the appeal memo proves that there was a personal hearing. This sentence is as follows :-
"After personal hearing, the Assistant Collector of Customs, to our great surprise, rejected our application on the sole ground that the claim for refund of duty was time-barred".
We are not at all willing to accept the argument of Shri Rangaswamy that the personal hearing, referred to in this context, is only an interview sought by the appellant, in his letter dated 15-7-82, addressed to the Assistant Collector of Customs, Cochin. In this letter, the appellant clearly mentioned that he has come from Bombay to have the benefit of a personal hearing before the Asstt. Collector. We cannot believe that the appellant meant an interview when he asked for a personal hearing, and in the memo of appeal he clearly indicated that a personal hearing was given, and When there is no ground in the appeal before the Collector that there was failure of the principles of natural justice. We therefore reject this argument.
11. Taking up next, the grievance about no show cause notice having been served before rejecting the appellants' reminder as a time-barred claim, Shri Rangaswamy during arguments admitted that issue of such show cause notice is not a statutory requirement but necessary under certain directions of Central Board of Excise & Customs. He also submitted that they are judicial decisions requiring such show cause notice. Now the appellant cannot blow hot and cold. In absence of any statutory requirement, show cause notice would only be an extension of principle of natural justice. The appellant's partners, without having received any notice, approaches the Assistant Collector who, according to the memo of appeal before the Collector (Appeals) grants him a hearing. At that stage, (before the Asstt. Collector), no grievance is made about show cause notice. Even before the Collector (Appeals), no grievance is made on that account. After the decision has been adverse to the appellant before the two lower forums, the appellant who was granted a hearing in the circumstances, stated above cannot turn around and make a complaint of show cause notice not having been served. The nature and extent of principles of compliance with principles would have to be judged on the facts of the case. In our view on the facts of the case, show cause notice must be deemed to have been waived by the appellant and grievance about the same before the Tribunal must be rejected.
12. This brings us to the question as to whether it can be presumed that the refund application was received by the Asstt. Collector. Before proceeding, we would like to dispose of the argument by Shri Rangaswamy that the Collector's order-in-appeal, which has gone into some merits of the case, would amount to an admission of the existence of a refund claim before the Assistant Collector. We have perused the Appellate Order impugned before us and we do not find any ground to hold that there was a refund application before the Asstt. Collector.
13. Shri Rangaswamy's argument then is that the appellant is entitled to a presumption that the refund application is before the Asstt. Collector. The basis for the presumption is the 'Certificate of Posting' copy of which has been filed before us. Shri Rangaswamy referred to Illustration (f) to Section 114 of the Evidence Act and argued that in the common course of business, the refund application was sent under a 'certificate of posting' and, therefore, a presumption is available. We have examined this argument. The provision of Evidence Act in terms were not applicable to proceedings before the Asstt. Collector. Further, the 'certificate of posting' shows that a letter was posted addressed to the Assistant Collector. This, understandably, does not give the nature of the contents or the particulars of the sender. No attempt was made to bring before us the 'Despatch Register' of the appellants to argue that the letter posted contained the refund application. According to appellants own saying, the appellants partner twice visited Cochin all the way from Bombay. It is difficult to accept that such a cautious person would economise on registration charges of postage. To us, it appears improbable that refund application for several lacs of rupees would be sent by the appellants by ordinary post under a mere certificate of posting, and that a reminder was issued after the lapse of 9-1/2 months. This could not be in the common course of business. These are the attendant circumstances, but a perusal of the Asstt. Collector's order would show that there is a categorical statement that the appellant's claim for refund, dated 15-5-81, said to have been posted, was not received in the Customs House. Shri Rangaswamy's argument is that such a rebuttal should be with the help of evidence. In this context, we note that the appellants have no evidence to show that the refund application reached the Custom House. The present case is not comparable to a civil suit between two rival parties where either party should lead evidence to rebut the evidence led by the other party or presumption arising in its favour. It is a case where the Assistant Collector of Customs, who is a very senior official of the Customs Department, was acting quasi-judicially. His categorical statement recorded in his quasi-judicial order that the refund application was not received must be held to have been made only after due enquiry from the correspondence in question. We would not expect the Assistant Collector acting in a quasi-judicial way to record in his order in detail the material he had examined before he came to conclusion that the refund application was not received in the Custom House. In this context, we have perused Illustration (e) to Section 114, cited by the Revenue. This illustration allows a Court to presume that judicial and official acts have been regularly performed. No cause has been shown for us to doubt the finding of the Assistant Collector. After all, in a Custom House, hundreds of refund applications are received and these are dealt with in the ordinary course. Not a single circumstance has been cited before us to show that the appellant's refund claim reached the Customs House. For these reasons, we hold that there is no proof at all that the refund claim in question reached the Customs House.
14. We reproduce below Section 27 of the Customs Act which governs claims for refund of duty :-
"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) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, before the expiry of one year;
(b) in any other ease, 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.
Explanation:- 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) xxxxx xxxxx xxxxx (4) xxxxx xxxxx xxxxx "
This section, as can be seen, lays down that a claimant for refund must make an application for refund to the Assistant Collector of Customs (emphasis supplied). The question of refund would arise only if an application is made to the Asstt. Collector. Under Sub-Section 27(2), the question of further action would arise only on receipt of such an application by the Assistant Collector. We have already held that there is no proof that an application for refund, made by the appellants, has reached the Assistant Collector. Therefore, there was no question of his granting the refund pursuant to such an application.
15. This finding would render all other arguments regarding limitation, etc., advanced by both sides, redundant. Having held that there was no refund application before the Assistant Collector, we do not go into the other arguments nor do we examine the case law. We dismiss the appeal in the light of the above discussions.