Customs, Excise and Gold Tribunal - Mumbai
Calico Chemicals And Plastics Division vs Collector Of Customs on 20 February, 1986
Equivalent citations: 1987(13)ECR779(TRI.-MUMBAI), 1986(25)ELT395(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. This reference application under Section 130(1) of the Customs Act is by the appellants in Appeal CD(T)(BOM) No. 176/81. By this application the applicants requires the Tribunal to refer the points set out in paragraph 8 of the application which according to him are the questions of law arising out of the order-in-appeal to the High Court after drawing a statement of the case.
2. We heard Shri S.N. Parikh, Advocate for the applicants and Shri N.K. Pattekar for the respondent Collector. We perused our Order-in-Appeal CD(T)(BOM) Appeal No. 176/81.
3. The brief facts of the appeal were: The present applicants application for refund of duty was rejected by the Assistant Collector of Customs as barred under Section 27(1) of the Customs Act. On appeal, the Appellate Collector also rejected holding that the provisions of Section 27(1) are mandatory. In the revision application filed before the Government of India which stood transferred to the Tribunal for being heard as an appeal the applicants herein did not dispute that the claim was made after the expiry of six months from the date of payment of duty. The contention was that due to layoff in the factory the application for refund could not be made within the prescribed period. The claim for refund related to the duty paid in respect of the goods which were imported but were found missing and not delivered to the applicants.
4. This Bench rejected the appeal holding that the Customs Act did not confer any power on the Assistant Collector to condone the delay, and that there was no error in the order passed by the Assistant Collector as well as the Collector (Appeals).
5. During the hearing of this application Shri Parikh contended that the provisions of Section 27(1) of the Customs Act are inapplicable to the facts of the appeal. The Customs authorities have no jurisdiction or authority to levy and collect customs duty in respect of the goods which are imported but admittedly missing or lost when they were in the custody of the Port Trust, and as such questions (a) to (d) of para 8 arise. Shri Parikh further urged as an alternative argument that Section 27 of the Customs Act was unconstitutional, illegal, null and void as it violates Article 14, 19(1)(g), 265 and 300-A of the Constitution of India. Therefore, the question (e) of para 8 of the application arises. It was also contended by Shri Parikh that the Tribunal has power to condone the delay if it was satisfied of sufficient reasons for the delay, and as such, question (f) of para 8 of the application arises. He had not addressed any arguments with regard to questions at (g) and (h). Shri Parikh relied on the decision of the Bombay High Court reported in 1985(22) ELT 334 (BOM) I.T.C. Ltd. v. M.P. Chipkar and Ors. in support of his contention that Section 27(1) would not apply to cases where duty had been levied and collected without authority of law.
6. Shri N.K. Pattekar appearing for the respondent Collector however, submitted that the period of limitation prescribed under Section 27(1) is mandatory. The authorities constituted under the Customs Act are bound by that provisions and the general law of Limitation Act is inapplicable. In that connection Shri Pattekar relied upon the Tribunal's Special Bench decision in Miles India Ltd. v. Appellate Collector of Customs, Bombay, reported in 1983 ECR 242 D(CEGAT) and the order of the Supreme Court in Civil Appeal No. 1633 of 1984 in Miles India Ltd. v. Assistant Collector of Customs.
7. We have carefully considered the submissions made on both the sides. Section 130(1) of the Customs Act authorises a party to the appeal to file an application before the Tribunal to refer to the High Court any question of law arising out of the order other than the question having a relation to the rate of duty of customs or to the value of' goods for purposes of assessment. It further requires the Tribunal to refer to the High Court such question of law within 120 days of receipt of such application by drawing up a statement of the case. It is thus seen from the provisions of Section 130(1) that what may be referred to the High Court should be a question of law and that question should arise out of the order made under Section 129-B, the notice of which was served on the party to the appeal. In the appeal out of which the present application arises, the only question of law that appropriately arises is whether the claim for refund was barred under Section 27(1) of the Customs Act. No other question of law arises out of that order. In that view of the matter the questions regarding the constitutionality of Section 27 and other allied questions would not require to be referred to the High Court. The question whether the provisions of Section 27(1) are applicable to refund claims made in respect of the goods which were imported but were short delivered or found missing had come up for consideration before the Tribunal in more than one appeal. This Bench and all other Benches have consistently held that the provisions of Section 27(1) of the Customs Act are attracted to such claims, and further held that the authorities constituted under the Customs Act cannot go behind the provisions of the Act. This provision came up for consideration before the Special Bench of the Tribunal in Appeal No. CD(SB)(T) 20/82-D, Miles India Ltd. v. Appellate Collector of Customs, Bombay 1983 ELT 1026 (CEGAT). The question posed in that case read:
'the short question, falling for determination in this appeal, filed by Miles India Ltd., Baroda (Gujarat) is as to whether the order passed by firstly the Assistant Collector of Customs and then by the Appellate Collector of Customs, Bombay, on appeal being filed before him, whereby they declined to entertain the claim for refund, filed by the appellant on the same being barred by time, as having been made after expiry of the period of six months, stipulated u/s 27 of the Customs Act, 1962 are legally sustainable or not.' The Bench's finding is found in paragraph 31 of the judgment. It reads:
'We are thus of the firm view that any claim filed before the custom authorities for refund of the excess duty has to be treated u/s 27 of the Customs Act, because there is no other provision providing application for refund before the Customs authorities, and the parties filing such refund claim are to be regulated by and restricted to the time limit provided therein and custom authorities would be right in rejecting the claims filed after the expiry of the period contemplated therein and parties are debarred from urging general principles of law of limitation in proceedings before the customs authorities.'
8. Being aggrieved by the order of the Tribunal Miles India Ltd., filed a Civil Appeal No. 1633 of 1984 before the Supreme Court of India. When the appellant sought permission for withdrawing the appeal, the Supreme Court made the following order:
'After the matter was heard for some time and it was indicated that the Customs Authorities, acting under the Act, were justified in disallowing the claim for refund of as they were bound by the period. of limitation provided therefor under Section 27(1) of the Customs Act, 1962 learned counsel for the appellant sought leave to withdraw the appeal. We accord their leave to withdraw the appeal, but make it clear that the order of the Customs, Excise & Gold (Control) Appellate Tribunal suffer from no infirmity. If really the payment of the duty was under a mistake of law, the appellant may seek recourse to such alternative remedy as it may be advised.
The appeal is accordingly dismissed as withdrawn'.
9. Further, in Madras Rubber Factory Ltd., v. the Union of India, AIR 1976 S.C. p.638, the applicability of Section '27(1) of the Customs Act to refund claims came up for consideration before the Supreme Court. The brief facts of that case were:
'The customs authorities have been charging customs duty on V.P. Latex under the residuary item 87 of Indian Tariff Act, 1934 instead of ICT 39. The customs duty charged under "item 87 is much more than the one chargeable under item 39. The appellants claimed refund of excess duty charged under item 87. The Assistant Collector of Customs as well as the Appellate Collector of Customs rejected the application as being barred under Section 27(1). On revision to the Government of India, the Government of India passed the following order:
'The Government of India have carefully considered the reasons advanced by the petitioner for their failure to prefer the claims for refund within the time stipulated under Section 27 of the Customs Act, 1962, but see no justification to interfere with the appellate orders. The revision applications are, therefore, rejected'.
The Madras Rubber Factory filed five appeals by special leave to the Supreme Court. The Supreme Court dismissed the appeals by observing:
'the present appeals arising out of the orders made by the Government of India in proceedings under Section 27(1) of the Act have got to fail on the ground that the view taken by the authorities below on the question of limitations could not be shown to be incorrect'.
10. Admittedly, the goods in respect of which refund was sought were imported into India. They were chargeable to duty. Refund was sought on the ground that after the import they were found missing. Neither the Assistant Collector nor the Appellate Collector nor this Bench went into the merits of the claim. This Bench particularly did not record a finding that the claim was not admissible under Section 23(1) of the Customs Act. The rejection was on the ground of limitation provided under Section 27(1) of the Act. The view taken by the Custom Authorities as well this Bench is in confirmity with the view of the Supreme Court referred to in the preceeding paragraph. It may be stated here that inspite of the decision of the Special bench in Miles India 1983 ECR 242D (CEGAT), this Bench had held in several cases that the provisions of Section 27(1) are not applicable to goods which are not imported into India. That view was taken because under Section 12 of the Customs Act, no customs duty could be levied in respect of goods which were not imported into India. But as stated earlier in respect of the- goods which are the subject matter of the refund claim they were admittedly imported into India and chargeable to duty.
11. The law laid down by the Supreme Court, under Article 141 of the Constitution of India is binding on all authorities. In the said circumstances reguest to refer a point of law which has been settled by the Supreme Court cannot be granted as it ceased to be a disputed guestion of law.
12. As regards the decision of the Bombay High Court 1985(22) ELT 334 (BOM) referred to by the learned Advocate, the High Court was exercising its extraordinary jurisdiction under Article 226 of the Constitution. The Customs Authorities and the Tribunal are the creatures of the Customs Act and they cannot go into the constitutionality of the Customs Act or traverse behind the provisions contained in the Customs Act. As the refund sought was admittedly duty paid in respect of the goods which were admittedly imported into India, the application for refund would be governed by Section 27(1) and the Tribunal for the reasons stated above will have no jurisdiction to order refund against the provisions of Section 27(1) even if the Tribunal is satisfied that on merit the refund was admissible.
13. For the reasons stated above, we reject this Reference Application.