Bombay High Court
Board Of Trustees Of The Port Of Mormugao vs Union Of India on 14 July, 1993
Equivalent citations: 1993ECR590(BOMBAY), 1995ECR40(BOMBAY), 1993(68)ELT39(BOM)
JUDGMENT Pendse, J.
1. The petitioners - the Board of Trustees of the Port of Mormugoa, Goa is a body corporate constituted under the Major Port March 6, 1975 for import of spare parts for a twin screw drag suctim Hopper dredger. The consignment of spare parts arrived in Bombay in 61 cases and 5% of the cases were opened by the Customs authorities, Bombay for inspection and shortage of imported items was not detected. The imported good were assessed for duty under Item No. 72(3) 72B of Indian Customs Tariff at 40% ad valorem by Bill of Entry dated April 20, 1976 and the petitioners paid a sum of Rs. 13,66,101.60 as customs duty for import of consignment. The cases were thereafter opened and inspected by the Chief Engineer of the Dredger and it was revealed that certain items mentioned in the packing specifications furnished by the foreign supplier were short landed.
2. Having realised that the requisite spare parts were not available in 61 packages, the petitioners sought a supplementary licence for import of the short landed items. The supplementary licence was granted and the petitioners imported the items which were missing from the original packages. In respect of these items, the petitioners filled bill of entries and the respondents demanded customs duty of Rs. 66,452.13. The petitioners protested against the demand claiming that the duty was already paid initially in respect of these items which were found short landed. The was not accepted by the respondents and thereupon the petitioners paid the duty as demanded under protest and cleared the consignment.
The petitioners thereupon thereupon filed an application for refund on January 22, 1978 claiming that the duty of Rs. 66,452.13 recovered by Customs authorities was erroneous and without authority of law. The claim made by the petitioners for refund was turned down by the Assistant Collector by order dated November 24, 1977 holding that the application for refund ought to have been in respect of duty paid initially and could not be in respect of duty paid on the second consignment in respect of short landed items. The decision of the Assistant Collector was confirmed in appeal by Collector of Customs (Appeals) by order dated February 22, 1979 and further appeal preferred by the petitioners before Customs, Excise and Gold (Control) Appellate Tribunal ended in dismissal. The orders passed by the three authorities below are under challenge in this petition filed under Article 226 of the Constitution of India.
3. Shri Presswalla, learned counsel appearing on behalf of the petitioners, submitted that the authorities below were in error in rejecting the refund application on the ground that refund ought to have been sought in respect of duty paid on April 20, 1976 and refund in respect of duty paid on December 8, 1976 was not maintainable. Shri Presswalla complained that the authorities below were also in error in holding that in case the application was made for refund in respect of duty paid on April 20, 1976, then the application was barred by rule of limitation prescribed under Section 27 of the Customs Act. It was urged on behalf of the petitioners by reference to the decision of Single Judge reported in 1987 (31) Excise Law Times 685 Escorts Tractors Ltd. v. Union of India and Others that the refund application in respect of duty paid in December 1976 was perfectly maintainable. We are afraid, we cannot accede to the submission of the learned counsel. The conclusion of the three authorities below that application for refund should be in respect of duty-paid in April 1976 is correct. The right of refund accrued to the petitioners because the duty was recovered in respect of certain items which were never shipped by the foreign suppliers. The petitioners thereupon imported the short landed items by importing the second consignment and the Customs authorities could not be faulted for recovering the duty on the second consignment. We are unable to accede to the reasoning of the learned Single Judge in the judgment referred to by Shri Presswalla because it is possible that the rate of duty may vary when the second consignment was imported and in such cases the Customs authorities are entitled to levy duty even though the duty was levied earlier in respect of short landed goods. The right of the petitioners is obviously to seek refund in respect of short-landed goods and, therefore, the findings of the authorities below that the application for refund ought to have been in respect of duty paid in April 1976 cannot be faulted.
4. Shri Presswalla then submitted that the conclusion of the Customs authorities that in case the application for refund is treated as seeking refund in respect of duty-paid in April 1976, then the claim is barred by rule of limitation under Section 27 of the Customs Act, is not correct. We find considerable merit in the submission of the learned counsel. The justice demands that the application for refund should be treated as application in respect of duty paid in April 1976. There is no dispute between the parties that duty was recovered in April 1976 even in respect of short landed goods and in respect of which the petitioners were not liable to pay any duty. It is now well settled that in the case duty is recovered in respect of items which are not even imported, then the bar of Section 27 of the Act will not be attracted. In our judgment, in the facts and circumstances of the case, it is necessary to treat the application for refund dated January 22, 1976 as one in respect of duty recovered in April 1976 and as the bar of Section 27 has no application, the petitioners are entitled to the entire amount of refund. For these reasons, the impugned orders passed by the authorities below are required to be set aside and to hold that the petitioners are entitled to the amount of refund. There is no dispute as regards the quantum of refund the petitioners are entitled to.
5. Accordingly, petition succeeds and rule is made absolute in terms of prayer (a) and the respondents are directed to refund to the petitioners Rs. 66,452.13 within four weeks from today. In the circumstances of the case, there will be no order as to costs.