1. The question for decision in these five appeals is whether in view of the Supreme Court's order dated Nov. 17, 1976 and Dec. 10, 1979 in Civil Appeal Nos. 784-787 and 866 of 1973 and Civil Misc. Petition Nos.
214 and 5924-5927 of 1979, parties V.M. Salgaccar and Bros Pvt. Ltd. v.Shri S.B. Patel and Ors. should be granted refund of amount collected as Duty totalling Rs. 1,70,597.44.
2. Facts material for decision of these apeals are : that appellants during 1964 and 1965 imported 'Earth Moving Equipment' namely, Michigan Tractor Shovel, Michigan Shovel 125A, Traxacavator Model 977, Michigan Shovel 175A and Michigan Tractor Shovel 175A (hereinafter called 'the goods'). The only and primary function for which the goods were designed is that of machinery used for loading, scrapping, excavating i.e. as Earth Moving Machinery. The goods were inter alia assessed to additional duty (countervailing duty) on the basis that they were liable to Excise duty under T.I. 34 of the Central Excise Tariff as Motor Vehicles. The New Customs House, Bombay issued Public Notice No.37 dated 3-6-1968 declaring that Earth Moving Equipment such as the goods imported by the appellants were not liable to Excise duty under T.I. 34 of the Central Excise Tariff and therefore they were not asssessable to countervailing duty. The appellants then applied to the Assistant Collector of Customs for refund of amount collected as countervailing duty. The applications were rejected on the ground that they were filed beyond the six months time-limit prescribed under Section 27 of the Customs Act, 1962. The orders were upheld in appeals.
The appellants then filed Writ Petitions before the Judicial Commissioner, Goa, Daman and Diu. The Judicial Commissioner by order dated 20-7-1972 dismissed the Writ Petitions on the ground that the appellants were guilty of laches which disentitled them from obtaining any remedy from the Court. The appellants then filed Civil appeals before the Supreme Court. The Supreme Court on Nov. 17, 1976 granted leave to the appellants to withdraw the appeals. The appeals were allowed to be withdrawn with liberty to the appellants to approach the Central Government in Revision on all points. The appellants contend that this order was passed on a concession made on behalf of the Union of India (Government of India). The appellants then filed Revision application to the Government of India. The Government of India by order Nos. 82-B to 86-B rejected the five Revision Applications filed by the appellants as time barred under Section 131 of the Customs Act, 1962. The appellants then again approached the Supreme Court and the Supreme Court on Dec. 10, 1979 in Civil Misc. Petition Numbers and Civil appeal numbers referred to above passed the following order : "In view of the fact that when these matters had come up before this Court on November 17, 1976, a statement was made on behalf of the Government that if Revision applications were submitted to the Central Government the same would be considered on merits, we are of the opinion that the Government of India should not have disposed of the Revisions on the ground of limitation. We, therefore, set aside the order passed by the Joint Secretary to the Government of India on June 20, 1978 and remand the matters back to the Government for disposal of the Revision application on merits.
The Civil Misc. Petitions shall stand disposed of in terms of this order. The order of this Court dated November 17, 1976 will stand modified as above." 3. At the hearing, Shri A.N. Haksar with Miss. Shrivastva, Advocate represented the appellants and Shri V. Lakshmi Kumaran, S.D.R.represented the respondent.
4. Shri Lakshmi Kumaran, learned Departmental Representative conceded that the goods imported by the appellants were 'Earth Moving Machinery' and that they were not chargeable to countervailing duty. In view of this concession, the limited question falling for decision is whether the appellants could be granted refund of amount collected from them as countervailing duty ignoring the limitation prescribed under Section 27(1) of the Customs Act, 1962, in view of the assurance given on behalf of the Government of India in the Supreme Court in the two orders cited above.
5. Shri Haksar, learned Advocate for the appellants argued that in view of the order of the Supreme Court, it is not open to the Department to urge limitation under Section 27(1) of the Customs Act as a defence to the appellants' claim, whereas, Shri Lakshmi Kumaran, for the Deptt.
contended that under orders of the Supreme Court, the Tribunal could examine the merits of the claim and merits in this case would only mean limitation under Section 27(1) of the Act. According to him, at no stage was it disputed that the goods were not chargeable to countervailing duty, therefore, the only merits of the claim requiring examination was whether it was barred by limitation under Section 27(1) of the Act. He argued that one of the pleas raised by the Union of India in Civil Writ Petitions was that the appellants had not exhausted the alternative remedy of Revision application to Government of India under Section 131 of the Act (as then existing). If the appellants filed Revision application at that stage the same would have been barred by limitation as stipulated under Section 131 of the Act, therefore, the concession made before the Supreme Court should be interpreted to mean that Government would not reject the Revision application on the ground that they were barred by limitation stipulated under Section 131 of the Act. The concession should not be interpreted to mean that Government had also agreed to waive limitation under Section 27(1) of the Act, As against this Shri Haksar, learned Advocate for the appellants submitted that the entire matter was before the Supreme Court when it passed orders dated Nov. 17, 1976 and Dec.
10, 1979. The Supreme Court was aware that the appellants' claim for refund had been rejected on the ground of limitation under Section 27(1) of the Act and so was Government. Therefore, when a direction was given for disposal of Revision Application on merits merits should be interpreted to mean merits of the claim and not an examination as to whether the application for refund were barred by limitation under Section 27(1) of the Act. Shri Haksar, learned Advocate also submitted that other parties who had filed applications for refund after the expiry of the time-limit under Section 27(1) of the Act had been granted refund. Shri Haksar in support of his arguments relied on the following decisions : (i) Sunalal Yadav v. the State of Rajasthan and ors., AIR 1977 S.C. 2050, (ii) M/s. Shiv Shankar Dal Mills v. State of Haryana and ors., AIR 1980 S.C. 1037, (iii) Mohamed Oamer, Mohamed Noorullah v. S.M. Noordin, AIR 1952 Bombay 165.Scientific Instruments Co, Ltd. v. Collector of Customs and anr., 1980 E.L.T. 89 (Calcutta), and (v) M/s. Nirlon Synthetics Fibres & Chemicals Ltd. v. Union of India, (Civil Appeal No. 84/79) undated co]py filed.
6. Shri V. Lakshmi Kumaran, learned Departmental Representative could not tell us as to what exactly was the statement or concession made on behalf of the Union of India on 17-11-1976 before the Supreme Court when the Supreme Court granted leave to the appellants to withdraw their appeals, Shri Lakshmi Kumaran replied that from the files it is not possible to say what exactly was the concession made by the Counsel representing the Union of India. While orders dated 17-11-1976 passed by the Supreme Court may be silent as to exact nature of the statement made on behalf of the Union of India but when the two orders (dated 17-11-1976 and 10-12-1979) are read together there can be no doubt that according to these orders a statement was made on behalf of the Government that after Revision applications were submitted to the Central Government, the same would be considered on merits. From the material part of the Supreme Court's decision dated 10-12-1979, it is also clear that the Supreme Court viewed with disfavour the Government of India having disposed of Revision applications on the ground of limitation. The Supreme Court then remanded the matter back to Government for disposal on merits. Admittedly, the applications for refund filed by the appellants were beyond time stipulated under Section 27(1) of the Act and the Supreme Court was aware of it. The Supreme Court could not have remanded the matter back to Government only for rejecting the claim on the ground that they were filed beyond time stipulated under Section 27(1) of the Act.
We find that in M/s. NirIon's case (a copy of which has been filed by the appellants and whose correctness is not disputed by the other party) Solicitor General representing the Union of India agreed to examine the substance of the claim in the case without regard to question of limitation [under Section 27(1) of the Act] and on such examination, if any sum was found refundable to the petitioners, it would be so refunded. Looking to this decision of the Supreme Court and the concession made by the Solicitor General in the case, it appears that the statement made on behalf of the Union of India was to examine the appellants claim overlooking or waiving limitation under Section 131 or under Section 27(1) of the Act.
7. Shri Haksar, learned Advocate for the appellants relying on Sunalal Yadav v.. The State of Rajasthan and ors., AIR 1977 S.C. 2050 and Mohamed Oamer, Mohamed Noorllah v.. S.M. Noordin, AIR 1952 Bombay 165 argued that an examination on merits would not include an examination about limitation.
In the view we have taken in the present appeals, it is not necessary for us to give a finding whether in every case an examination on merits would exclude examination about limitation. As pointed out elsewhere in the present appeals our finding is that Government of India had made a statement before the Supreme Court to dispose of the appellants' claim ignoring limitation both under Section 131 and Section 27(1) of the Act.
8. It was urged that limitation under Section 27(1) of the Act cannot be relaxed by the Tribunal and that while Government has powers to grant refund ex gratia, the Tribunal has no such powers. It has however not been urged that if the Tribunal orders refund, the same would be disobeyed. We do not think that on this hair splitting argument, we should sit in judgment over decision of the Supreme Court driving the appellants from pillar to post and reject their claim on the technical plea of limitation when the Government itself as evidenced by the order of the Supreme Court agreed to waive limitation and examine the appellants claim on merits and when now before us it is not disputed that appellants goods were not chargeable to countervailing duty. It is manifest that on merits the appellants'claim deserves to be granted.
9. In view of the orders of the Supreme Court, the appellants are held entitled to and are ordered to be refunded the sums collected from them as countervailing duty in the five cases within 3 months from the date of this order. The appeals are thus allowed.