PETITIONER:
MADRAS RUBBER FACTORY LTD.
Vs.
RESPONDENT:
THE UNION OF INDIA & ORS.
DATE OF JUDGMENT03/12/1975
BENCH:
UNTWALIA, N.L.
BENCH:
UNTWALIA, N.L.
MATHEW, KUTTYIL KURIEN
GOSWAMI, P.K.
CITATION:
1976 AIR 638 1976 SCR (2) 864
1976 SCC (2) 255
ACT:
Customs Act-Section 27(1)-Limitation for refund of
claims.
HEADNOTE:
"V. P. Latex" imported by the appellants was treated as
falling under item 87 of the Indian Tariff Act 1934, the
custom Authorities and custom duty was charged, in addition
to a countervailing duty under item 15A of the Central
Excise Tariff, in accordance with the Central Salt & Excise
Act 1944. The appellants contending that V.P. Latex is an
item of raw-rubber covered only by item 39 of the Indian
Tariff Act 1934 preferred refund-claim under section 27(1)
of the Customs Act before the Assistant Collector, which was
dismissed on the ground of limitation. The appeal under
section 128(1)(b) and the Revision failed.
Dismissing the appeals, by special leave the Court.
^
HELD: In the instant case, there was nothing to show
that duty was paid under protest, general or specific and
therefore the claim was not within the period of limitation.
The view taken by the authorities on the question of
limitation was correct. [867-DE]
Dunlop India Ltd., etc. v. Union of India, [1976] (2)
S.C.R., P. 98 referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1565-
1569/73.
Appeals by Special Leave from the orders Nos. 4844-4848
of 1972 dated 25th November 1972 of the Central Govt.,
Ministry of Finance, Govt. of India.
D. V. Patel and K. R. Nambiyar for the Appellant.
G. L. Sanghi and Girish Chander for the Respondents.
The Judgment of the Court was delivered by
UNTWALIA, J. The appellant company in these appeals by
special leave is a manufacturer of rubber tyres and tubes.
It imports several raw-materials including Pyratex Vinyl
Pyridine Latex used in the manufacture of rubber tyres and
tubes. The Customs authorities of the Government of India
have been charging custom duty on V. P. Latex under the
residuary item 87 of the Indin Tariff Act, 1934 instead of
ICT 39-an item meant for charging duty on raw rubber. The
custom duty charged under item 87 is much more than the one
chargeable under item 39. A countervailing duty under item
15-A of the Central Excise Tariff in accordance with the
Central Salt and Excise Act, 1944 is also charged if the
article imported is not treated as raw-rubber. On five
consignments of V. P. Latex imported by the appellant in the
year 1968 custom duty was charged under item 87 by the
Appraiser pursuant to his order of assessment. Since he was
an officer lower in rank than the Assistant Collector of
Customs the appellant filed five applications before the
Assistant Collector under section 27 (1) of the Customs
865
Act, 1962-hereinafter referred to as the Act, for refund of
the excess amount of duty charged. In other words, the
appellant took the stand that if a custom duty would have
been charged on V. P. Latex under item 39 then the amount
would have been less to the extent of Rs. 3,74,879.49 on the
five consignments in question. It, therefore, claimed the
refund of the said amount, the details of which are as
follows:
___________________________________________________________
Bill No. and date Date of Delay Amount
claim for
refund
____________________________________________________________
1. D. NO. 1644 dated 8-4-69 31/4 Months 50,305.53
24-6-1968
2. D. No. 1024 dated 27-6-69 3 Months 60,339.97
18-9-1968
3. D. No. 1132 dated 8-4-69 2 Months 1,61,615.10
21-8-1968
4. D. No. 1931 dated 10-4-69 1 Months 50,512.71
23-7-1968
5. D. No. 68 dated 10-4-69 4 Months 52,106.18
1-6-1968 ____________
3,74,879.49
____________________________________________________________
Under section 27(1) of the Act the application for
refund had to be made before the expiry of six months from
the date of payment of duty, the date of payment being the
date of the bill in each case. Thus there was a delay
varying between 1 month to 4 months in the filing of each of
the applications for refund. The Assistant Collector of
Customs dismissed the applications on the ground that they
were filed out of time. The appeals to the Appellate
Collector of Customs filed under section 128(1) (b) of the
Act failed. The appellant took the matter in revision to the
Central Government under section 131. The revisions were
dismissed by the Central Government by their order dated
November 29, 1972 stating therein:
“The Govt. of India have carefully considered the
reasons advanced by the petitioners 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.”
These appeals were filed from the said order after obtaining
special leave of this Court.
Mr. D. V. Patel learned counsel for the appellant
submitted that in view of the recent decision of this Court
in Dunlop India Ltd. etc. v. Union of India & Ors. V. P.
Latex was chargeable to duty under item 39 only. The
applications filed by the appellant for refund of the excess
amount have erroneously been dismissed on the ground of
having been filed out of time. Counsel submitted that the
appellant used to pay custom duty not as and when a
particular consignment was received but by making deposits
in a running account. Hence no parti-
866
cular date of payment could be assigned in respect of a
particular consignment. He further submitted that the duty
was paid under protest and hence under the proviso to sub-
section (1) of section 27, the limitation of six months did
not apply. Mr. G. L. Sanghi, learned counsel for the
respondents contended that no case of running account had
been made before the authorities below and that there was
nothing to show that the duty had been paid under protest in
relation to any of of the five consignments.
It is no doubt true that in view of the decision of
this Court mentioned above the custom duty was chargeable on
import of V. P. Latex under item 39. The authorities below
do not seem to have decided the refund applications of the
appellant on merits. They have dismissed them merely on the
ground of limitation. The only question, therefore, which
falls for determination by us is whether the applications
for refund were filed out of time.
Section 27 reads as follows:
“27. (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 before the expiry of six months from the date
of payment of duty:
Provided that the limitation of six months shall
not apply where any duty has been paid under protest.
Explanation-Where any duty is paid provisionally
under section 18, the period of six months 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) Where, as a result of any order passed in
appeal or revision under this Act, refund of any duty
becomes due to any person, the proper officer may
refund the amount to such person without his having to
make any claim in that behalf.
(4) Save as provided in section 26, no claim for
refund of any duty shall be entertained except in
accordance with the provisions section.
The appellant’s case obviously and admittedly was not
covered by sub-section (3) as it had not challenged the
order of assessment in any appeal or revision. Nor was it a
case where any duty was paid provisionally under section 18.
The appellant’s case was governed by sub-section (1) of
section 27. No. case of any running account was set up by
the appellant nor was there anything in the records of this
case to substantiate it. Custom duty was paid in respect of
each of the five consignments on the date of its respective
bill. Ultimately this
867
position could not be disputed before us. The appellant,
however, contended that the duty was paid always under
general protest which covered the cases of these five
consignments also. Hence under the proviso to sub-section
(1) the limitation of six months does not apply.
Our attention was drawn to several letters in the
records of the appeals before us to substantiate the plea of
payment under protest, but none of them helps the appellant.
We may refer to only two of them. The appellant wrote a
letter on February 8, 1968 to the Assistant Collector of
Customs, Madras making out a case therein that V. P. Latex
was assessable to duty under item 39-ICT. Finally in this
letter a protest was made for the assessment of duty under
item 87 on V. P. Latex imported by the company in the past.
This letter was written before the five consignments in
question were imported and duty paid thereon. The protest,
therefore, embodied in the letter aforesaid was not in
respect of any of these consignments. A letter written on
July 15, 1968 was a letter written at a point of time when
two out of the five consignments had been imported; but
three were imported after the writing of this letter by the
appellant to the Asstt. Collector of Customs, Madras. This
letter relates to a consignment of 59 drums of V. P. Latex
which could not be connected with any of the five
consignments in question. Thus there is nothing to show that
duty on them was paid under protest, general or specific.
It was lastly contended on behalf of the appellant that
in view of the recent decision of this Court, the Govt.
should be directed to refund the excess amount of Rs.
3,74,879.49 charged on the five consignments. We are unable
to do so because 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
limitation could not be shown the incorrect.
In the result the appeals fail and are dismissed. There
will be no order as to costs.
S.R. Appeals dismissed.
868