ORDER
Shri S.S. Sekhon
1. This is an appeal filed by Aeronautical Development Agency, Bangalore (hereinafter referred to as the Appellant) an autonomous Society funded and managed by the Ministry of Defence, Government of India.
2. Originally, in terms of Notification 228/88-Cus dated 1.8.88 the items required for the purpose of LCA Programme, when imported into India by the authorized work center of the Appellants, were exempted from payment of duty. This Notification granted the benefit up to 30.6.92. The benefit of this Notification was extended upto 31.12.92 by Notification 234/92-Cus dated 26.6.92. The benefit of the Notification was again continued with effect from 8.6.93 by Notification 128/93-Cus.
3. During the interregnum period i.e, January 1993 to June 1993 there was no exemption notification, current, providing for exemption from payment of customs duty. On a representation made by the Appellant through the Ministry of Defence, the Department of Revenue issued an ad-hoc exemption order on exercise of powers under Section 25(2) of the Customs Act, 1962, on 10.1.95 exempting the imports made by the various Work Centers of the LCA programme during the period January 1993 to 8.6.1993. For the imports made during the interregnum, at the time of payment of customs duty, for items for the manufacture of LCA during the interregnum period, the Appellants, indicated in the letters attached to each bill of entry that the extension of the benefit of the original Notification 228/88-Cus was under active consideration of the Ministry of Finance and that they would approach the Customs authorities with a refund claim at the appropriate time. Ad-hoc exemption was issued on 10.1.95, the Appellants preferred a refund claim on 17.2.1995 seeking refund of the customs duty paid to the tune of Rs. 1.14 crore.
4. The Assistant Commissioner of Customs, Air Cargo, Bangalore, initially passed on Order-in-Original dated 20.5.95 rejecting the claim as barred by limitation. The said order was set aside and the matter was remanded by the Commissioner of Customs (Appeals) vide his Order-in-Appeal dated 18.9.95. In the de novo adjudication, the Assistant Commissioner of Customs passed Order-in-Original dated 14.5.96 wherein he held that the Appellants were entitled for the refund but rejected the refund claim on the ground that it was barred by limitation, under the provisions of Section 27 of the Customs Act, 1962, as it was not filed within one year from the date of payment of duty. The Assistant Commissioner also held that in the letters filed by the Appellants, there was neither mention about the payment of duty under protest nor were these letters accepted, registered and protest number given by the authorities. The Commissioner of Customs (Appeals) has confirmed the order of the Assistant Commissioner.
5. We have heard both sides and have considered the submissions made and find:-
(a) We find that no proforma for duty payment under protest and procedure for protest, under Customs Act, 1962, has been produced by Revenue before us or relied upon by the lower authorities to come for a finding that the letters under question are not letters of duty payments under protest. We have considered para 85 of the Mafatlal Industries, case [1997 (89) E.L.T 247(SC)], Indian Cements Ltd, [1989 (41) E.L.T 358(SC)] and Executive Engineer, Workshop Division, M.P. Electricity Board [1997 (94) E.L.T 445(SC)] and after perusal of the letters, would consider, reading of the letters attached to the B.Es in this case reveal to us, as they would to anybody, that the Appellant was not accepting the liability for duty under protest and had reserved his rights of claiming a refund thereto. We therefore have no hesitation to hold that the duties were paid under protest in the facts of this case. Therefore the bar of limitation under Section 27 of the Customs Act would not apply in the facts of this case. The refund, found eligible otherwise, by the lower authorities, should be paid.
(b) An ad hoc exemption order has been issued with specific reference to the imports made in this refund application under consideration. In terms of Circular 12/97/Cus dated 12.5.1997, benefit of ad hoc exemption orders issued under Section 25(2) of the Customs Act had to be extended to the importers. The ad hoc order in this case has been issued by the Central Government after considering the facts of the imports having been already effected and in the exceptional nature of this case and in public interest they have granted the exemption.
(c) The Division bench of the Bombay High Court in the case of Keshari Steels 2000(115) E.L.T 320(Bom) on 2.9.96 has determined, that refund, consequent to an order of correction made under Section 154 of the Customs Act will not be hit by the bar of limitation under Section 27 of the Customs Act. Section 154 of the Customs Act reads as follows:-
“Clerical or arithmetical mistakes in any decision or order passed by the Central Government, the Board or any officer of customs under this Act, or errors arising therein from any accidental slip or omission may, at any time, be corrected by the Central Government, the Board or such officer of customs or the successor in officer of such officer, as the case may be.”
And in the facts of this case, the Notification benefit which was available prior and subsequent to the interregnum period, has been specifically extended after due consideration by the Central Government by providing for an exemption Notification under Section 25(2) of the Customs Act. This would be covered by the word ‘omission’ in Section 154 of Customs Act 1962. Therefore this desire to extend the exemption benefit to the specified goods, as imported, during the interregnum period has to be given effect. The fact that no other decision of any other High Courts or Supreme Court on this issue was shown to us. This decision of the Bombay High Court has since been upheld on merits by the Supreme Court (2000 ELT A 139). Therefore, being bound by the Bombay High Court decision, we would hold that limitation bar as arrived at, in the facts of this case, cannot be upheld.
(d) The reliance by the learned SDR and the Revenue on the decision of Tribunal in the case of Iron Exchange (I) Ltd [1991(56) E.L.T 454] has been considered by us. We find that in this case the bench in Para (2) of the reported decision had observed, as regards the facts therein as follows: –
“….. We also observe that the ad-hoc exemption order does not give retrospective effect covering the imports already cleared on payment of duty…..”
In the present case, the facts are different, as the ad-hoc exemption order is specifically issued on 10.1.1995 to cover the imports already made and cleared on payment of duty during the period January 1993 to 8.6.1993. Therefore, on facts, on coverage, of the ad-hoc orders, reliance by Revenue on Iron Exchange (I) Ltd, decision (supra) is misplaced.
(e) We find that the benefit of an exemption by an ad-hoc order issued under Section 25(2) of Customs Act for goods already imported and cleared has been held to be in order, in a catena of decisions beginning from the case of Food Corporation of India [1984(17) E.L.T 180] by the Tribunal. We are therefore not able to persuade ourselves to approve the learned DR’s reliance on the Iron Exchange (I) Ltd decision and to hold the question of time bar in the facts of this case. Following this decision, we would consider that the specific ad-hoc orders, issued subsequently covering clearance of goods, have to be effected. In the present case, the Appellants could not have filed a refund application without the order-dated 10.1.1995. They have filed the present application without any undue delay on 12.2.1995 and this would be entitled them to the benefits of the ad-hoc exemption order.
6. In view of our filings, the appeal is allowed with consequential benefits.
(Pronounced in open Court on 28/7/2001