1. The revision petition preferred by M/s. Hindustan Lever Ltd. to the Government of India against the order of the Appellate Collector of Customs, Bombay dated 19-1-1979 on transfer to this Tribunal under Section 131-B of the Customs Act is being disposed of as an appeal under this order.
2. Shipping Bill dated 10-2-1976 had been presented by the appellants, Hindustan Lever Ltd. to the Superintendent of Customs, Porbandar who had cleared the bill on 11-2-1976 after collecting the necessary charges, no duty being payable on the commodity (Groundnut Kernels) that day. The entry outwards of the vessel was on 12-2-1976. Under Notification No. 8/F No. 347/1/76-TRU, dated 12-2-1976 duty @ Rs. 800/- per tonne had been imposed on this commodity. On 4-3-1977 the Superintendent of Customs, Porbandar sent a letter to the appellants mentioning the above fact and advised the appellants to pay the duty of Rs. 80,000/- on the goods exported. Under reply dated 21-3-1977 the appellants denied liability and pointed out that the demand was barred by time and requested for personal hearing also. It is also claimed therein that the Shipping . Bill having been cleared on 11-2-1976, permitting clearance of goods for export, no duty could thereafter be demanded as provided under the notification. Subsequently on 21-5-1977 the Superintendent of Customs, Porbandar issued a show cause notice demanding payment and directing the appellants to show cause why the demand should not be enforced. Under reply dated 22-8-1977 the appellants again put forward the defences earlier mentioned and requested for grant of personal hearing also. Under letter dated 30-8-1977 the Assistant Collector of Customs, Porbandar pointed out that duty was payable as provided under Section 16 of the Customs Act, entry outwards having been granted to the ship on 12-2-1976, and that the demand may be honoured and the amount paid. Under letter dated 28-9-1977 the appellant made payment under protest, reiterating their submissions made in the reply to the show cause notice and reserving the right to claim refund as per law. Subsequently, on 20-10-1977, they preferred an appeal which was dismissed by the Appellate Collector of Customs under his order dated 9-1-1979. He held thereunder that the claim made in the appeal memorandum that the goods had been loaded on 11-2-1976 cannot be true as the vessel itself arrived at 00.30 hours only on 12-2-1976 and that entry outward having been granted on 12-2-1976, duty was payable in accordance with the notification dated 12-2-1976. But he further held, with reference to the defence on the ground of the demand being time-barred, that once it is established that the goods are chargeable to duty and the amount is due to the Government, the amount, if paid, cannot be refunded, notwithstanding the fact that the demand itself was time-barred under Section 28(1) of the Customs Act.
3. It is against the said order that the revision petition, now an appeal, had been preferred. Shri M.S. Gupta, Senior Legal Manager of the appellant, appeared on behalf of the appellant, the department being represented by Shri Vineet Ohri, SDR.4. Shri Gupta contends that the provisions of Section 16 of the Customs Act cannot over-ride the provisions of Sections 50 and 51 and that once the goods have been cleared for export by suitable orders on the Shipping Bill and after collection of the charges payable as on that day, no duty could thereafter be demanded on the basis of the duty becoming payable under a notification issued on a subsequent day. So far as the contention that the goods have been loaded on 11-2-1976 itself, the said cannot be correct since, as the Appellate Collector has pointed out, the arrival of the vessel itself was after the midnight of 11/12-2-1976. Section 16 is clear and categorical that in case of goods entered for export under Section 50 the rate of duty shall be the rate as on the date on which a Shipping Bill is presented but that if the Shipping Bill had been presented before the date of entry outwards of the vessel by which the goods are to be exported, the Shipping Bill shall be deemed to have been presented on the date of such entry outwards. Sections 50 and 51 provide for the presentation of the Shipping Bill and the clearance thereof. But they do not provide for the date for calculation of the rate of duty, which is provided under Section 16 only. Therefore, the contention for the appellant that the Shipping Bill having been cleared on 11-2-1976 no duty would thereafter be payable, though the goods were loaded on 12-2-1976 (on which date duty was imposed) and the entry outwards of the ship was on 12-2-1976 only, is not acceptable. This contention for the appellant is accordingly rejected.
5. In the grounds of revision it is mentioned that the notification dated 12-2-1976 was not made available to the public on that day and was, in fact, printed and released on a subsequent date. It is claimed that for this reason also no duty could have been demanded. But it may be noted that no such ground had been raised either in the reply to the show cause notice or even in the grounds of appeal. Nor is any evidence produced to support this averment of fact first made in the grounds of revision. Nor was this ground seriously pressed by Shri Gupta at the time of his arguments. This contention is also accordingly rejected.
6. But Shri Gupta contends that the demand for duty was obviously time-barred since the duty became payable on 12-2-1976 and the first demand therefor was under letter dated 4-3-1977, much beyond the period of 6 months prescribed under Section 28 of the Customs Act, there being no case of collusion, wilful mis-statement or suppression of facts even alleged against the appellants as would have enlarged the period of limitation under the proviso to Section 28(1). The Appellate Collector also in a measure admits the fact that the demand for duty was beyond the period of limitation prescribed therefor. But he has held that the duty being legally chargeable and having been paid, though in pursuance of a time-barred demand, no refund could be claimed.
7. But it may be seen that the present proceedings are not on any refund application by the appellants but that the appeal to the Appellate Collector was against what is described as an order of the Assistant Collector, confirming a demand for payment of duty. Thus, in effect, the proceedings initiated by the appellants by way of appeal to the Appellate Collector were to question the liability for payment and thus question the validity of the demand itself. No doubt, subsequent to the letter (or order) of the Assistant Collector dated 30-8-1977 the amount of duty demanded had, in fact, been paid on 28-9-1977 and the appeal had been preferred subsequently only on 20-10-1977. But it should be seen that in making the payment on 28-9-1977 the appellants had specifically stated that the amount was being paid under protest without prejudice to their rights to claim refund thereof.
8. In their reply dated 22-8-1977 to the show cause notice dated 21-5-1977, the appellants had specifically demanded a personal hearing also. Hut it may be seen that no personal hearing appears to have been granted and, in fact, no regular order had been passed by the Assistant Collector. After making reference to the reply dated 22-8-1977 the Assistant Collector had merely sent a letter to the appellants dated 30-8-1977 rejecting their claim regarding non-liability on the basis of the Shipping Bill having been passed on 11-2-1976 and requesting them to make the payment of Rs. 80,000/- as demanded under the show cause notice. It is significant that the Assistant Collector has made no reference whatever to the defence of time-bar raised in the reply to the show cause notice. The concluding paragraph of the letter merely reads as follows: "It is hoped that on receipt of this letter, the outstanding amount of Rs. 80,000/- against Export duty on Ground Nut Kernels will \x paid by you." It therefore appears to us that there was really no order passed by the Assistant Collector following the adjudication proceedings initiated under the show cause notice. In any event if this letter dated 30-8-1977 is to be construed as an order, the same will have to be set aside on the basis that it is invalid in law as no personal hearing had been granted as demanded under the reply to the show cause notice and principles of natural justice had thus been violated.
9. As earlier mentioned, the appellants had chosen to pay the duty thereafter but under protest. Shri Gupta submits that it was in order to avoid harassment by the Customs authorities with reference to the subsequent export commitments of the appellants, the appellants being a large export house, that the payment was made, though under protest.
Such a representation appears to have been made before the Appellate Collector also as is seen from the order of the Appellate Collector.
But it appears to us that it is not necessary to go into the truth of these allegations of harassment. It appears to us that it is sufficient in this connection to note that the payment was under protest and reserving the rights of the appellants to claim the refund.
10. Subsequent to such payment the appellants had prefer red an appeal against the order dated 30-8-1977 questioning the very legality of the demand, on the ground of time-bar under Section 28 as also non-liability to pay on the basis of the Shipping Bill having been cleared and passed on 11-2-1976.
11. While it may be true that if a person from whom duty is demanded (but demand is time-barred), chooses to make the. payment voluntarily, he cannot subsequently claim refund thereof insofar as the duty was legally payable though the demand may have become time-barred. It is on this basis that the Appellate Collector has passed his order. But we are satisfied that the said principle would not apply to the facts of the present case. The payment by the appellants was not merely not voluntary and under protest, but specifically reserving the right of the appellants to claim refund of the amount by talcing subsequent proceedings. Such subsequent proceedings had, in fact, been initiated by preferring the appeal to the Appellate Collector. The mere fact, that the duty demanded had been paid before preferring the appeal, cannot take away the right of the appellants to prefer the appeal itself to question the validity of the original demand. In fact, the Customs Act itself contains provisions for deposit of the duty demanded before preferring appeals. Therefore, the mere fact, that the duty demanded had been paid on 29-8-1977, cannot take away the right of the appellants to prefer the appeal to question the very liability to pay on the basis that the demand had become time-barred. We, therefore, hold that if the appellant is able to establish that the demand was invalid, the mere fact that the duty had been paid under protest before preferring the appeal, cannot deprive the appellants of the relief of quashing the demand.
12. As earlier mentioned, there can be no doubt that the demand for payment of duty was time-barred under the provisions of Section 28 of the Customs Act. In that event on that ground itself the demand was liable to be quashed. Further, as ealier noted, the order of the Assistant Collector is liable to be quashed on the further ground that the same had been passed without affording an opportunity of personal hearing.
13. We, therefore, hold that the orders of the lower authorities are liable to be set aside. We, accordingly, allow the appeal and set aside the orders of the lower authorities, leaving it open to the appellants to take necessary steps to obtain refund in the manner provided therefor in law.
14. With great respect to my learned Brothers, I would like to differ and record my reasons below.
15. My learned Brothers, observed in para 12 of the order that the Assistant Collector's order is liable to be quashed on the ground that the same has been passed without affording an opportunity of personal hearing (to the appellant). I would further observe that the Assistant Collector's letter dated 30-8-1977 appears to be neither a decision nor an order on which an appeal could have been filed. This order merely records a hope that the outstanding amount would be paid by the appellant. There could be no appeal against it. The orders of the Appellate Collector should have been quashed on the grounds that: (i) The Asstt. Collector's letter dated 30-8-1977 was not appealable order or decision; and (ii) Even this letter was issued without affording personal hearing to the appellant.
16. My learned Brothers, came to the conclusion (para 4) that Section 16 of the Customs Act is clear and categorical that in case of goods entered for export under Section SO, the rate of duty shall be the rate as on the date on which a Shipping Bill is presented but that if the Shipping Bill has been presented before the date of entry outward of the vessel (by which the goods were to be exported), the Shipping Bill shall be deemed to have been presented on the date of such entry outward.
17. I respectfully agree with the conclusion in paragraph 4 and would add that there was really no "demand by" the customs. As mentioned earlier, the Assistant Collector's order dated 30-8-1977 merely expressed hope that the outstanding duty would be paid by the appellant. Therefore, I hold that there having been no demand under Section 28 of the Customs Act, there can be no question of time-barred demand. The amount was clearly payable under Section 16 of the Act. The hope for payment was expressed after six months.
18. It has not been established that any coercion was used to revise this amount. Therefore, I hold that there was only a suggestion from the Customs that the appellants pay the amount which was legitimately due to the department but against which a demand under Section 28, if raised, would have been time-barred. The suggestion by the A.C. was honoured by the appellant. In these circumstances, there could not have been any appeal at all. For these reasons, I would dismiss the appeal.