1. These are fourteen revision applications filed by M/s. Union Carbide of India Ltd. (hereinafter called the appellants) before the Government of India (now transferred to the Appellate Tribunal under Section 131B of the Customs Act, 1962) against the order-in-appeal Nos. 211 to 220/80, dated 18-2-1980 and Nos. 363-366/80, dated 29-2-1980 passed by the Appellate Collector of Customs, Calcutta.
2. Briefly stated the facts of the case as are apparent on record are that the appellants are manufacturers of Electric Dry Batteries and for the manufacture of Dry Cell batteries, manganese ore and E.M.D.(Electrolytic Manganese Dioxide), an electrochemically processed chemical compound were imported. Both manganese ore and E.M.D. were assessed by the Customs authorities under the same item of the tariff i.e. 25.01/32(3) of the Customs Tariff as 'Battery Grade Manganese Dioxide'. As per the appellants these two articles are two totally different materials one being an ore and the other being a chemical compound and neither of them deserved to fall under minerals grade.
Price-wise also E.M.D. is about 10 to 15 times more costly than Manganese Ore and commercially these two items are recognised as two different commodities. Electryolytic Manganese Dioxide (E.M.D.) is a electrochemically processed chemical compound, Manganese Ore, 'on the other hand, is unprocessed mined-material. As per the appellants, 'earlier, before the C.C.C.N. was adopted, there were separate tariff items for assessing imported Manganese Ore which was classified under metallic ores, 'all sorts, and E.M.D. which was placed under chemicals.
The C.C.C.N. has Itself separate heading even now for Manganese Ore (Chapter 26) and E.M.D. (Chapter 28.22).
3. Aggrieved by the action of the assessing authority the appellants 'felted" refund claims before the Assistant Collector, Customs (Appraising Refund Section) Calcutta narrating the entire facts but he summarily rejected the appellants claims for refund of excess customs duty paid holding the same barred by time. The appeals filed before the Appellate Collector of Customs Calcutta, were also rejected without going into the merits of the cases on the technical ground that the claims were time-barred under Section 27 of the Customs Act, 1962.
4. Being aggrieved with the orders of the Appellate Collector of Customs, :the appellants filed 14 revision applications which were transferred to this Tribunal and are treated as appeals.
5. As the issue involved in all these appeals is identical, so we propose to dispose of all these 14 appeals by this consolidated order.
6. We have heard Shri Ravindra Narain, Advocate, counsel for the appellants who was assisted by Shri T.M, Ansari, Advocate and Shri A.S.Sundar Rajan, J.D.R. for the department and have gone through the record.
7. Shri Ravindra Narain contended that the order of the authority below in rejecting the appeals summarily on the technical ground of limitation .is not justified and that the matter should have been heard and decided on merits. He laid much stress on the point that this Tribunal should decide the matter on merit rather disposing of the same on technical ground of limitation. He drew our attention towards the decision of Delhi High Court in Vazfr. Sultan Tobacco Co. Ltd. v. Union of India and Ors. [(1981 E.L.T. 140 (Del.)] in support of his contention that the excess amount of customs duty has .been recovered from the appellants and the department cannot retain the illegally collected money. Any money realised excess of what is permissible thereunder would be realisation without the provisions of the Act and the time-limit laid down for refund under the Statute will not apply in such cases. He put much emphasis on paragraph 12 of this judgment wherein Hon'ble Mr. Justice B.N. Kirpal of Delhi High Court observed as under :- "In the present case even if it be assumed that the payment has been made by reason of mistake, the payment which has been made cannot legally be termed to be payment of excise duty. As I have already observed, payment of excise duty would be the payment authorised by law and not any payment in excess thereof. In this view of the matter, it may be said that the application made ought not to have been regarded as application under Rule 11 at all. That Rule applies to refund of duty or charges which are paid under mistake. The application of the petitioner should have been regarded as a sought representation, not covered by Rules 11 or 173-J and the respondents ought to have applied the law laid down in Voltas case and passed an administrative order directing the refund of the excise duty realised by them in excess of what was permissible under the Act." 8. As per the arguments of the learned counsel of the appellants,; a direction can be given by this Tribunal to the aurhority below to refund the excess amount recovered from the appellants regardless of the period of limitation. There is no need of filing any application for claiming refund in such cases as has,been observed by the Hon'ble Judge of the Delhi High Court.
9. He pointed out that in none of the decisions of the Tribunal on the point of limitation, this aspect of the matter was specifically dealt with. No period of limitation is applicable in such cases where the duty was collected in excess of what was legally due. Under Article 265 of the Constitution, the Government is entitled to levy and collect duty only by authority of law., and, therefore, what was legally not due to them cannot be said to have been collected according to law. If the Government has realised the duty.in contravention of law, the Court is fully competent to allow refund of excess amount of duty, even though the refund claim has been held to be time-barred by the departmental authorities. The payment of duty would be payment authorised by law and not any payment in excess thereof and, as such, the departmental authorities were duty bound to refund the excess amount of duty recovered illegally from the appellants even if without any application for refund from the appellants.
10. Shri Sundar Rajan, Departmental Representative countered the arguments of the learned counsel of the appellants and submitted that the very same issue has been raised earlier more than once before the Tribunal, and the Tribunal, after full examination and after taking into account a large number of judicial decisions on the issue, and, in particular the decisions of the Supreme Court, had come to the conclusion that any claim of refund of duty under the Customs Act had to be dealt with in terms of Section 27 of the Customs Act. He referred in particular to Order No. D-28/83, dated 6-1-1983 passed by the Special Bench of the Tribunal in the case of Miles India Ltd., Baroda v. Appellate Collector of Customs, Bombay [1983 E.L.T. 1026 (CEGAT)].
Order No. 273/83-C, dated 13-5-1983 [Appeal No. CL(SB) 778/78-C] Laboratories Vifor (India) Pvt. Ltd. v. Collector of Customs, Bombay (1983 ECR 977-D) and Order No. 536/83-C [Appeal No. CD(SB) 1233/80-C] in Sandoz (India) Ltd. v. The Collector of Customs, Bombay in support of his contention. According to him the reasoning in the above decisions is fully applicable to the present appeals and, therefore, these appeals deserve rejection.
11. The plea of the learned counsel of the appellants that the matter should have been decided on merits rather than on the technical ground of limitation has no force.
12. It is settled principle of law that once a party places reliance upon a statutory right, then it is not open to that party to urge that the restrictions imposed by such a Statute on the exercise of that right as to the entertainabi-lity of that claim are to be ignored. The limitation period for filing the claim for the refund of duty has been specifically mentioned as six months from the date of the payment of duty under Section 27 of the Customs Act, 1962. Provisions of Section 27 are mandatory in nature and therefore, they go to the root of the matter and hence, the authority below has rightly chosen to decide this matter of limitation before going into the merits of the main matter.
There is no illegality in deciding an issue as a preliminary issue if that issue goes to the root of the matter and the case can be disposed of finally by the decision on that preliminary issue. The question of limitation goes to the root of the matter and the appellants cannot escape the mandatory provisions of Section 27 of the Customs Act, 1962 in the garb of getting the matter decided on merits of the case. When the authority below has not given any findings on the merits of the case, and only found the case barred by time under Section 27 of the Customs Act, 1962, this Tribunal, who is an appellate authority, cannot decided the matter on merits of the case. We are, therefore, unable to accede to this contention of the learned counsel of the appellants.
13. On the point whether the authority below was justified in rejecting the appeals of the appellants on the ground of limitation, we have to look into the provisions of Section 27 of the Customs Act, 1962 which reads as under :- "Claim for refund of duty.-(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: (a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, before the expiry of one year; (b) in any other case, before the expiry of six months, from the date of payment of duty : Provided that the limitation of one year or six months, as the case may be, shall not apply where any duty has been paid under protest.
Explanation.-Where any duty is paid provisionally under Section 18, the period of one year or six months, as the case may be, shall be computed from the date of adjustment of duty after thefinal 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 the 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 of this Section." 14. In these cases, admittedly, the appellants filed the refund claim applications beyond six months from the date of the payment of duty which was not under protest. Now, it is to be seen whether any application is necessarily to be filed for the refund of the duty claimed to be illegally recovered from the appellants or if it is necessary whether the time-limit of six months as laid down under Section 27 of the Customs Act, 1962 is mandatory in nature or not 15. In this respect, reliance has been placed by the learned counsel of the appellants on the observation made by Single Judge of the Delhi High Court in Vazir Sultan Tobacco Co. Ltd. v. Union of India and Ors.
(1981 E.L.T. 140) wherein his Lordship observed that in cases of illegal recovery of excise duty, the authorities ought to have passed an administrative order directing the refund of excise duty realised by them in excess of what was permissible under the Act. These observations of a Single Judge of Delhi High Court in this case do not help the appellants. These are not the findings Of the Hon'ble Judge which could have the force of a Judgment in rent. These observations can at the most be said to be exhortation (pious desires) of the Hon'ble Judge in that particular case to the good sense of Government.
It cannot be cited as an authority applicable in the present ease.
Moreover, a perusal of the entire judgment shows that nowhere his Lordship held that where collection of an amount was without authority of law or payment was made under a mistake of law and the refund claim application was filed under the statutory provisions, the provisions of limitation contained under Section 27 of the Act would not be applicable. The special Bench of this Tribunal in the case M/s.
Laboratories Vifor (India) P\t. Ltd. v. Collector of Customs, Bombay (Supra) has also taken note of the observations of the Delhi High Court in the case of Vazir Sultan Tobacco Co. Ltd. (Supra) and it was observed as under :- "The effect of that judgment appears to be that in such cases an application for refund should be treated as an administrative matter and not with reference to the Central Excise Rules. In relation to the present case, it would mean that the application for refund should be dealt with administratively and under the Customs Act. We observe that the Tribunal can only sit in judgment on orders passed under the Act. Section 128(1) of the Customs Act, both before and after amendment, provides for an appeal against an order or decision under this Act. Therefore administrative orders are not within the scope of the Tribunal, and we have no jurisdiction to give any directions which would compel the Customs authorities to take action which is administrative in nature and outside the scope of the Customs Act. In fact, the High Court itself has observed that "it may be that the excise authorities, because of Rules 11 and 173-J", -may not be able to entertain an application for refund. This, however, would not prevent the petitioner from approaching this Court for appropriate direction under Article 226." It is settled proposition of law that once a party places reliance upon a statutory right, then it is not open to that party to urge that the restrictions imposed by such a Statute on the exercise of that right as to the entertainability of the claim should be ignored. As the appellants are claiming the refund of duty under the provisions of the Customs Act, 1962, they will have to follow the restrictions imposed by such a Statute. In the cases before us, the claims for refund were made with reference to the provisions of the Customs Act, and as such it cannot be said that the claims for refund ought not to be disposed of by reference to the time-limit set by Section 27(1) of the Customs Act.
The Tribunals who are the creatures of the Statute and are quasi-judicial authorities have got no powers to give any administrative directions to the lower authorities to refund the claim without following the provisions as laid down under the Statute. A party claiming refund under the Statute will have to follow the conditions as laid down under that Statute. Section 27 of the Customs Act 1962 specifically lays down the time-limit of six months for filing refund application and this mandatory provision cannot be brushed aside while considering the refund claim application.In Incheck Tyres Ltd. v. Assistant Collector of Customs (1981 E.L.T. 1691 Hon'ble Judges of the Calcutta High Court following the decisions of the Hon'ble Supreme Court in Burmah Shell Construction Co.
v. State of Orissa (AIR 1962 S C. 1320) held that the Customs Act is a self-contained Act and the authorities acting thereunder are bound by the provisions thereof and the parties seeking any relief from these authorities cannot insist that the authorities should look to the general provisions of law and ignore the limitations imposed upon them by the particular Statute. Once a party places reliance upon a statutory right, and makes a claim with reference to a particular Statute (as is the case before us), then it is not open to that party to urge that the restrictions imposed by such Statute on the exercise of that right as to the entertainability of the claim are to be ignored. In almost all the cases eited before us it has been laid down that statutory authorities are within their rights in not admitting claims filed beyond time wherein the refunds were "ordered to be made by the High Courts in exercise of writ jurisdiction by invoking the principles envisaged under Section 72 of the Contract Act or under suits filed under the provisions of Section 72 of the Contract Act itself In Prem Raj, Ganpat Raj and Ors. v. Assistant Collector of Customs, Sadru and Ors. 1977 E.L.T. J 166) it has been laid down that :- "In so far as orders of the respondents are concerned, no fault can be found therewith, inasmuch as the application for refund made by' the Company was actually time-barred, having been presented, as already stated beyond six months of the payment of duty so that the Customs authorities were bound to reject it in pursuance of the provisions of Section 27 of the Act." To the same effect were the observations in the case of Associated Bearing Co. Ltd. v. Union of India and Ors. (Bombay) (1980 E.L.T. 415) and also in Vazir Sultan Tobacco Co. Ltd. (1981 E.L.T. 140) wherein it was observed that :- It may be that the excise authorities because of Rules 11 and 173-J would not be able to entertain an application for refund but this could not prevent the petitioner from approaching the Court for appropriate direction under Article 226." 17. From these decisions, we may conclude that the Hon'ble Supreme Court and High Courts are competent to order refund in exercise of writ jurisdiction beyond the period of limitation as prescribed under the Statute with respect to the illegally recovered duty amount but the statutory authorities are bound by the provisions of the Statute and they are justified in rejecting the time-barred claim. This proposition of law that Customs authorities were right in rejecting the claim of refund when made before them by reference to Section 27 of the Act was confirmed by the Supreme Court in the case of Madras Rubber Factory Ltd. v. Union of India and Ors. (AIR 1976 S.C. 638). In this case it was held that unless the case could be brought within the four corners of the provisions of Section 27 itself, namely, that the duty had been paid under protest or provisionally or right of refund accrued by authority of some decision is appeal or refund in the same case, the party coming beyond the period of six months as prescribed by Section 27(1) of the Customs Act, 1962 was liable to have its claim rejecting as being beyond time.
18. Under these circumstances, we find no justification to interfere with the decisions of the authority below and we, therefore, reject all these appeals.
(a) It is not every levy or collection of duty in excess of, what, according to the assessee, is the permissible limit, that becomes, straightaway, an illegal exaction and, hence, refundable.
(b) It is only if the levy was altogether (i) without jurisdiction ab initio, (i) any of the relevant provisions of the enactment, in question, is ultra vires, or declared to be ultra vires, or (ii) an error as to a collateral fact was committed whereby jurisdiction was assumed, or (iii) the levy exceeds the limit imposed in the Constitution itself.
(i) incompetent i.e. the assessing officer is not duly authorised to make the assessment, or (ii) in disregard of the conditions laid down by the statute itself for the assumption and exercise of jurisdiction, or (iii) in bad faith or in violation of the principles of natural justice.
As succintly observed by Lord Reid in Anisminic Ltd. v. The Foreign Compensation Commission, [(1969) 1 AIIE R 208=2 WLR 163], "But there are many cases where, although the tribunal had jurisdiction to enter on the enquiry, it has done or failed to do something in the course of the enquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had no power to make. It may have failed in the course of the enquiry to comply with the requirements of natural justice. It may in perfect good faith have miscoastrusd the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted toil. It may have refused to take into account something which it was required to take into account.
Or it may have based its decisioa on some matter which, under the provisions setting it up, it had no right to take into account. I do not intended this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly." (e) In all such cases, as well as in a case of a payment made on account of mistake, it is either the Civil Court in a Suit filed within the period of Limitation prescribed under the Limitation Act, 1963, or the High Court in exercise of its writ jurisdiction that can direct refund of the amount of the illegal levy or mistaken payment, as the case may be.
(f) (i) Where, indisputably, the assessing officer had the requisite jurisdiction to determine the duty payable initially, it is not lost merely because he was in error in law or on facts; (AIR 1962 S.C. 1621- Ujjambai v. State of Madhya Pradesh).
(ii) An erroneous decision of an assessing authority cannot be said to be reached without jurisdiction merely because it was shown in some collateral proceeding to be wrong 1969(2) SCWR 446 Union of India v. A.V. Narasimhulu].
(iii) An error committed by an assessing authority in interpreting a tariff item wrongly, in exercise of his indisputable jurisdiction, does not have the effect of placing the resulting order beyond his jurisdiction, however erroneous or grossly erroneous the interpretation may be [1983 EL.T. 1327 (S.C.)-A.V. Venkateswaran v. Ramchand Sobhraj Wadhwani]. Where between two competing entries, the statutory authority applied one or the other it is not a case of want of jurisdiction ab initio or acting in excess of it.
(g) Where the alleged erroneous determination of the duty payable did not result from either want of jurisdiction or acting in excess of jurisdiction, the period of Limitation prescribed in the Act will govern the proceedings. Thus, in AIR 1976 S.C. 638- (Madras Rubber Factory v. Union of India), it was held that an application for refund of duty charged in excess beyond the statutory period of Limitation prescribed under Sec. 27 of the Act is barred and is thus rightly rejected.
(h) Having applied under Sec. 27 of the Act, it is futile for the Appellant to contend that the period of Limitation prescribed therein is inapplicable.