ORDER
V.K. Agrawal
1. M/s Sawhney Export House Pvt. Ltd have filed these two appeals, being aggrieved with the Order No. 536 & 537/2000 MCH dt. 9-8-2000 and 629/2000 MCH dt. 10-10-2000 passed by the Commissioner (Appeals) Mumbai.
2. Briefly stated the facts are that the Appellant imported certain goods from abroad. The Assistant Collector (Customs) enhanced the value on which duty was paid by the Appellants. The Commissioner (Appeals) has accepted the value as declared by the Appellants. The Appellants have also requested for payment of refund of excess duty alongwith interest on the excess duty paid and refund of demurrage charges paid by them. The Commissioner (Appeals) in both the impugned Orders has held that the Appellants are entitled to the consequential refund as a consequence of accepting the value declared by them. However, the Commissioner (Appeals) has given his findings that the procedure for claiming refund of duty or the interest has been provided in Section 27 of the Customs Act ; that since they did not file a regular refund claim under Section 27, their request for payment of interest is not maintainable under the law. The Commissioner (Appeals) has also given his findings that there is a prescribed procedure for claiming demurrage in case of delayed clearance by obtaining detention certificate and as there is nothing on record to show that the Appellants has following the said procedure, the benefit cannot be given late at the appeal stage.
3. Shri T.S.Sawhney, Managing Director of the Appellants, submitted that as the excess duty was charged erroneously by the Department, they are entitled to claim refund of excess duty paid, interest @ 18% permissible under the Customs Act; that the demurrage had been paid by them on account of delay caused by the Department and accordingly they are entitled to refund of the same. He relied upon the decision in the case of Natwar Textile Processors (P) Ltd. Vs. U.O.I., 1995 (57) ECR 10 (S.C.) wherein in Supreme Court dismissed the Civil Appeal with cost with direction to the Appellants that in case duty is found payable then interest @ 18% P.a. will also be payable from the date of payment. He also placed reliance on the decision in the case of Sandeep Industries Vs. Collector of Customs, New Delhi, 1991 (37) ECR 595 (Del) wherein it was held by the Delhi High Court that “….when the import was lawful, the goods could not be confiscated and when the valuation has also been finally determined by the Collector, i.e., the declared value as accepted by the Collector then there was no occassion for not releasing the goods and the petitioner cannot even be held liable for demurrage in these facts and circumstances. In our opinion, therefore, the petitioner is entitled to a direction for the release of the goods without payment of any demugrrage/ground rent charges/container charges in respect of the period from the date of filing of the bills of entry.”
4. Countering the arguments, shri A.K. Mehta, ld S.D.R. submitted that the cause for refund arises only on the date the Collector (Appeals) passed order accepting the value of the imported goods as declared by the Appellants; that refund can be considered and sanctioned as per the provisions of Section 27 of the Customs Act; that a refund application can be made only in respect of any duty and interest paid by person; that as it is not the case of the appellant that any interest was paid by them, refund of interest does not arise; that under the provisions of Section 27A of the Customs Act, interest is payable if the amount is not refunded within three months from the date of receipt of application under Section 27(1) of the Act. He, further, said that demurrage charges are not paid to the Customs Department and as such question of giving any refund of such charges by Customs Department does not arise; that as observed by the Commissioner (Appeals), the Appellants have not followed the prescribed procedure in respect of demurrage charges. He also referred to the decision of the Supreme Court in the case of International Airports Authority of India Vs. Grand Slam International, 1995 (77) ELT 75 3 S.C. wherein it was held that even it goods are detained for no fault of the importer, the Collector of Customs or his delegate could not direct the International Airports Authority of India, by issuance of a certificate to release the goods of the importer without collection of the charges liable to be paid in respect thereof. In reply Shri Sawhney mentioned that it was held by the Bombay High court in Pure Drinks Pvt. Ltd Vs. U.O.I., 1989 (22) ECR 589 (BOM) that “when such excise duty is collected by the State without any authority of law, it is the duty of the State to refund the tax…” The High Court also directed the Department to pay interest @ 12% per annuum from the date the duty was collected till payment.
5. We have considered the submissions of both the sides. From the material brought on record, we observe that the Commissioner (Appeals), only under the impugned Orders, has held that enhancement of value by the Department was not warranted and accepted the declared value. The refund of duty, it appears, is to be considered in pursuance of these impugned Orders. The ld. SDR has rightly emphasised that refund is governed by the provisions of Section 27 of the Customs Act. This has been the views of the Supreme Court in the case of Mafatlal Industries Ltd. Vs. U.O.I., 1997 (89) ELT 247 (SC) wherein it was held that by virtue of sub section 3 of Section 27 of the Customs Act, all claims for refund (excepting those which arise as a result of declaration of unconsitutionally of a provision where under the levy was created) have to be preferred and adjudicated only under the provisions of the Customs Act. No suit for refund of duty is maintainable in that behalf. The Supreme Court also held that the writ petition has to be disposed of in the light and in accordance with the provisions of the Act. “This is for the reason that the power under Article 226 has to be exercised to affectuate the regime of law and not for abrogating it. Even while acting in exercise of the said Consitutional power, the High Court can not ignore the law nor can it override it.”
6. Provisions of Section 27 does not deal with the refund of any demurrage charges or payment of interest from the date duty in excess was paid. The Customs Authorities, being the creature of Customs Act, has to exercise the powers under the Act,. the Apex Court, in the case of C.C.E. Chandigarh Vs. Doaba Co-operative Sugar Mills, 1988(37) ELT 478 (S.C.), has held:
“… in making claims for refund before the departmental authority, an asseessee is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed there under must be adhered to. The Authorities functioning under the Act are bound by the provisions of the Act.”
7. Accordingly the Appellants have to claim the refund of duty from the Departmental Authorities within the four corners of the provisions of the ACt. There is no provision in the Customs Act providing for payment of interest on the duty collected in excess from the date of payment. Similarly, there is no provision for refund or reimbursement of demurrages Charges paid by an assessee. We, thus, find no infirmity in the impugned Orders and reject both the appeals filed by the Appellants.