1. This is a revision application to the Government of India under Section 131 of the Customs Act, 1962 (as then applicable) which, in accordance with Section 131 B (2) ibid, is to be proceeded with as if it were an appeal filed before the Tribunal. (It is hereinafter referred to for convenience as ' "the appeal"). After notice had been duly issued, the matter was taken up for hearing on the 11th April, 1983.
2. The case relates to the appellants' claim for refund of Rs. 54,540.50 paid by them as additional (countervailing) duty of Customs on a consignment of non-toxic PVC Compound imported by them. The duty was paid on 17.2.75. Their refund claim was filed on 13.1.78, i.e. well beyond the time limit of 6 months set out in Section 27(1) of the Customs Act. Their claim was therefore rejected by the Assistant Collector as time-barred. This decision was upheld by the Appellate Collector of Customs, Bombay. The appellants then filed a revision petition to the Government of India, which has since been transferred to us.
(b) that the levy of duty was made without authority of law and without jurisdiction, and therefore the time-limit under Section 27 of the Customs Act was not applicable.
4. The first ground has not been gone into by the lower authorities, as the claim was rejected only on the basis of limitation. For the purposes of argument, we shall assume that this ground had substance, and that additional duty of Customs was not leviable on the goods at the material time.
5. In support of their second ground, the appellants have relied on a circular letter of the Central Board of Excise and Customs dated 24.1.1970 (No. 1/7/70-Cus. VI) and also on 4 Orders-in-Revision of the Government of India.
6. Shri Gersappe, who appeared on behalf of the appellants, 'reiterated the points made in their revision application. As against this, Smt.
Vijay Zutshi, on behalf of the Department, submitted that, as already held by the Tribunal in other similar cases, the limitation under Section 27 Customs Act was fully applicable to a case of this nature.
She also submitted that the Tribunal was not bound by any decision of the Government of India in revision. According to her, therefore, the appeal deserved to be rejected.
7. We have carefully considered the case, in the light of the arguments advanced by both sides. In the first place, we could observe that "countervailing duty" is an additional duty of Customs, leviable under Section 3(1) of the Customs Tariff Act, 1975. The fact that it is equated to the excise duty leviable on a like article (though even in this respect the method of valuation is different) does not change its essential character as a Customs duty. Its levy, refund, etc., are their fore squarely covered by the provisions of the Customs Act, 1962, the relevant provision in the present context being Section 27.
8. The very same issue has been raised earlier more than once before the Tribunal, and the Tribunal, after a very full examination and after taking into account a large number of judicial decisions bearing on the issue, and in particular the decisions of the Supreme Court, had come to the conclusion that any claim for refund of duty under the Customs Act had to be dealt with in terms of Section 27 of the Customs Act. We would in particular refer to Order No. D-28/83 dated 6.1.1983, passed by a Special Bench of the Tribunal in the case of Miles India Ltd., Baroda (reported in 1983 ECR 242D (CEGAT). The issues in that case were materially the same as in this case, the appellants having claimed refund of countervailing duty paid on "Indian Chemical Reagent Strips" imported by them, which according to them were exempt from the duty under exemption notification No. 198/77-Cus. dated 17.9.1977. The conclusions reached by that Bench, after a very full study of the authorities, are contained in paragraph 33 and 34 of its Order, which are reproduced below : 33. This Tribunal while examining orders passed by such customs authorities, acting under the Act, has to examine their propriety and legality solely with reference to the provisions of the Act itself, and we find that the Customs Act does nowhere contemplate that any cause could be set up by the party before the customs authorities as justification for the delay, and it is the established proposition that the general law of limitation cannot be invoked before quasi-judicial authorities, which proposition has been laid down by the Supreme Court, in the case earlier referred to : namely AIR 1975 SC 1039 and also subsequently in another case, reported as AIR 1978 SC 209".
34. On a resume of the foregoing discussion, making reference to a number of authorities wherein the principle that statutory authorities are bound by the time-limit provided by the Statute, was approved and confirmed, we do not find any ground to interfere in the present appeal. The same is accordingly dismissed.
In our view the reasoning in the above decision is fully applicable to the present appeal, which deserves rejection.
9. As regards the letter of the Central Board of Excise and Customs relied upon by Shri Gersappe, we observe that it could not bind quasi-judicial authorities below the Board, far less an authority like, the Tribunal. As regards the 4 orders-in-revision of the Government of India, two of them, namely, those dated 31.3.1978 and 1.4.1978, contain no reasons for allowing the revision applications, while the other two, namely, those dated 22.2.78 and 10.5.78, which are worded similarly, do not contain any detailed reasons such as have been given in the Tribunal's order No. D-28/83 dated 6.1.1983, to which we have referred.
We do not, therefore, consider that either the Board's letter or the decisions of the Government of India would prevail over the very detailed reasoning which has been adopted in the Tribunal's Order under reference and which we have followed in reaching the conclusion set out in the previous paragraph.
10. We would not have considered it necessary to say anything further, but for the fact that one of the learned Members of the Bench is not able to share the view taken by the other two of us, for reasons which he is recording separately. His view is based on an examination of the judge-ments of the Supreme Court and various High Courts having a bearing on this issue. In particular, he relies on the judgment of the Supreme Court in Pate] India Pvt. Ltd., v. Union of India Concuss July I(S.C) (in prefererce to Madras Rubber Factory Ltd., v. Union of India and Ors. , on a recent judgment of the Orissa High Court in Straw Products Ltd., v. Factory Officer, C.E. and Ors. reported in 1983 ECR 222D (Orissa), and a judgment of the Delhi High Court in Vazir Sultan Tobacco Co., Ltd. v.Union of India, reported in 1981 ELT 140 (Delhi : 1982 ECR 341D.11. In various previous orders of the Tribunal, particularly those in the case of Afro-Asian Associates reported in 1983 ECR 183D (CEGAT) and Miles India Ltd., Baroda (If paragraph 8 above), there is a very full discussion of the various judgments, bearing on the issue of limitation, in the case of Afro-Asian Associates, the Consultant, Shri T.V. Krishnamoorthy, cited nearly a hundred decisions), and a summation of the overall effect of those judgments we do not think it necessary to cover the same ground again. However as regards the Supreme Court judgments in the case of Patel India and Madras Rubber Factory we would observe that the Madras Rubber Factory decision, which supports the view that the limitation under Section 27 Customs Act is applicable, (a) is more recent than the Patel India decision, and (b) is with reference to the applicability of Section 27 Customs Act, 1962 (which is in issue here), whereas the Patel India decision was with reference to Section 40 of the Sea Customs Act, 1878. There are substantial differences between the two provisions. In particular, Section 40, Sea Customs Act, did not contain a provision corresponding to Sub-section (4) of Section 27 of the Customs Act, namely "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." Again Section 40 of the Sea Customs Act referred to refund being claimed in consequence of the duties having been paid through inadvertance, error or misconstruction. It was held on the facts of the Patel India case that none of these three reasons applied, and that Section 40 itself did not apply to the case. As against this, Section 27 of the Customs Act does not make any reference to the grounds on which the refund is claimed.
Thus the two provisions are not pan materia.
12. Our learned brother lays emphasis on the point that a collection which is not authorised by the Act cannot be treated as duty. It is true that the inclusion of a provision similar to Section 11B(5) of the Central' Excises and Salt Act would have placed the position beyond any possible doubt. But it should not be overlooked that the argument that an amount which is not leviable is not "duty" has been repeatedly advanced in the past, and in fact this has been one of the main grounds on which Courts have held that the limitation under Customs law would not apply. We would not like to presume that when their Lordships of the Supreme Court gave their decision in the case of Madras Rubber Factory, in 1976, this argument was not within their knowledge.
13. As regards the judgment of the Orissa High Court, in the case of Straw Products Ltd., we would observe, with very great respect to that High Court, that the judgment only contains a general statement regarding pronouncements of the Supreme Court, without going into their details. In fact, in the particular case which was the subject matter of the proceedings, the High Court did not think it appropriate to impose a decision on the Statutory authority, but remitted it to that authority to examine the relevant aspects, giving full opportunity to the assessees to be heard and to establish their claim. The statutory authority was required to follow the law and come to its conclusions (emphasis ours). The High Court stressed (and this is significant) that the law of the land as laid down by the highest Court in the country is binding on everyone. If, as we think, the latest pronouncement of the Supreme Court on the particular provision before us is quite clear, we have, with the utmost respect to the Orissa High Court, to apply the law as laid down in that judgment of the Supreme Court.
14. We have also taken note of the observations of the Delhi High Court in the case of Vazir Sultan Tobacco Co. 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. Seel ion 128(1) ibid, 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 173J, 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." This reinforces our view that, whereas the High Court could give relief in such a case in exercise of its jurisdiction, we as the Tribunal cannot claim such a jurisdiction.
15. We have considered the point that by denying a relief which the Courts can and would give, we would be driving the citizen in every case to go to the Courts. This is only partially correct. In the first place, it is not as if in every case the Courts would necessarily give relief; in many cases, they have not done so. Secondly, it is not as if the citizen has no other remedy open to him; the time limit of 6 months or one year which is prescribed in the Customs Act, is normally sufficient, if only the assessee is a little vigilant in looking after his own interests. And finally, if we do not have certain powers which the Supreme Court and High Courts have, namely that of giving relief through writs, it is the choice of the citizen whether he decides to go to Court or not and it is purely within the discretion of the Courts whether they would give him relief. The Tribunal would not be either driving the citizen to the, Courts or standing in the way of his going to the Courts, but would only be refraining from purporting to exercise a power which it does not have.
16. For the foregoing reasons, and after giving the most careful and respectful consideration to the views of our learned brother, we would reject this appeal.
Sd/- (H.R. Syiem) Sd/- (S. Veakattian) Member(T) Senior Vice-President 1. To a question by the Tribunal, the learned Departmental Representative answered that in the instant case no countervailing duty was legally chargeable. The countervailing duty thus realised from the appellants was without authority of law. The question is whether for claiming refund of this amount collected without authority of law as countervailing duty, limitation under Section 27(1) of the Customs Act, 1962 (hereinafter called Act) would be applicable.
2. The Tribunal in a series of orders has taken the view that acting under the Customs Act, 1962, as it does, it has no authority to relax the limitation laid down in Section 27(1) of the Act. In fact in M/s Associated Capsules Pvt. Ltd., Bombay v. Collector of Customs, Bombay reported in 1983 ECR 439-D(CEGAT), Bench 'B' of the Tribunal in which I was also a Member, the same view was taken. That case held as under: From the above observations, it would appear that while it might be open to the High Court and Supreme Court, while exercising writ jurisdiction under Article 226 of the Constitution of India to order refund of an amount collected without authority of law, it would not be open to authority like the present Tribunal, which is a statutory body created by the Act, to disregard the limitation set out in Section 27(1) of the Act.
This decision was primarily due to the observations a single Judge of Madras High Court (A.D. Koshal-Judge as he then was), in Prem Raj, Ganpat Raj and Ors. v. Assistant Collector of Customs, Madras and Ors.
1977 ELT J 166. That case held as under: In so far as the order 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 pro- visions of Section 27 of the Act.
Similar observations are also contained in M/s Associated Bearing Co.
Ltd. v. Union of India & Om(Bombay) 1980 ELT 415 : 1982 ECR 516D (Bombay) and M/s Vazir Sultan Tobacco Co. Ltd. v. Union of India and Ors. Delhi 1981 ELT 140 : 1982 ECR 341D (Delhi) Apart from these observations, there was no definite finding of any High Court or the Supreme Court on the point that any statutory authority (as distinguished from Courts) in case of claim for refund of an amount collected without authority of law or payment made under mistake of law could order the same in disregard of limitation provided by the Special Act (in the present case Section 27(1) of the Customs Act, 1962).
interpreting Section 40 of the Sea Customs Act, 1878 which was, analoguous to the present Section 27 of the Act, held that the Section did not apply to a claim for refund of an excess amount act warranted under the Act. The Customs authorities in refusing to refund the excess duty unlawfully levied could not have relied on Section 40 ibid.
Respondent Union of India could not retain the txcess duty except on authority of some other provisions or authority of law. The Customs authorities not being entitled to retain the excess duty, there was legal obligation on the part of the respondent Union of India to return the excess duty and correspondingly the legal right in the appellants to recover it. It was also held that refusal to return the excess duty on the ground that the appellants had not applied within the time provided by the Act was clearly untenable. There are also a number of High Court decisions to the same effect. To mention only a few they are: Bharat Commerce and Industries v. Union of India and Ors. (Delhi) 1979 ELT J-527, 1979-Cen-Cus 447D, Mis. Vazir Sultan Tobacco Co. v. Union of India and Ors. (Delhi) 1981 ELT 140 : 1982 ECR 341D (Delhi) Maharashtra Vegetable Product Ltd. and Ors. v. Union of India and Ors. (Bombay) 1981 ELT 468 : 1982 ECR 929D, Vipro Products Ltd. and Ors. v. Union of India and Ors. (Bombay) 1981 ELT 531, Paper Products v. Union of India and Ors. (Bombay) 1981 ELT 538.
From the above, legal position emerging is that where collection of an amount was without authority of law or payment made under mistake of law, the provision of limitation like the Section 27(1) of the Act would not be applicable. The question still remains as to the appropriate forum where the assessee could get relief whether he could get relief before the Statutory authorities acting under the Special Act or he could get relief only through writ jurisdiction of High Courts. I have already Said how in view of observations of the Madras High Court and other High Courts referred to above, the Tribunal declined to give relief to the claimant.
4. Before proceeding further some precedents relied on by the Department, in support of their contention that Section 27(1) of the Act would be applicable even to cases where collection has been made without authority of law or payment made under mistake of law, may be considered. In Commissioner of Sales Tax, U.P., Lucknow v. Parson Tools and Plants, Kanpur whether Section 14 (2) of the Limitation Act in terms or in principle could be invoked for excluding the time spent in prosecuting application Tinder Rule 8(6) of the U.P. Sales Tax Rules for setting aside the order of dismissal of appeal in default, under U.P. Sales Tax Act, 1948 from computation of the period of limitation for filing a revision under that Act. A question like the present did not arise for consideration in that case. As between Madras Rubber Factory Ltd. v.Union of India and Ors. and Patel India Pvt. Ltd. v.Union of India and Ors. latter which considered the applicability of Section 40 of the Sea Customs Act, 1878 (analoguous to Section 27 of the Act) to a claim of refund of an amount collected without authority of law, is better applicable to the facts of the present case. In fact this case is the sheet anchor of many High Court decisions referred to above.
5. After the orders of the Tribunal regarding applicability of Section 27 of the Act were passed in a number of cases, there is a decision of Division Bench of Orissa High Court, consisting of R.N. Misra, Chief Justice (as he then was, no Judge Supreme Court) and Shri J.J.C.Mohanty, Judge. In Straw Products Ltd. v. Factory Officer Central Excise and Ors. 1983 ECR 222D (Orissa). the High Court in Para-8 of the judgment held as under: There have been a series of authoritative pronoucements of the Supreme Court that where payment has been found to be on account of mistake, there is no plea of estoppel and the State cannot exact from a citizen anything which is not due under the law and if the citizen out of mistake or not knowing his liability has parted with any money, the State would not be entitled to keep it. If the amount is one which is not due under the Statute a claim for refund would not be governed by the Special limitation provided by Statute and would be governed by the General Law of Limitation, namely, a period of 3 years from the date of discovery of the mistake. A host of authorities were cited before us and we are sure when opportunity is extended to the petitioner in the matter of disposal of its petition by the competent authority, these decisions would be cited. Since the law of the land is certain on these points, by decisions of the highest court in the country and these are binding on everyone, we are sure the statutory body will act in a fair way, follow the law and come to its conclusions.
From the judgment of the Orissa High Court extracted above, it would appear that statutory bodies like the Tribunal for entertaining claims in such cases should invoke not Section 27 of the Act but the General Law of Limitation. The Division Bench of Orissa High Court's judgment which is recent and more definite should be preferred to observations of the High Courts referred to in para 2- above.
6. I might also refer to a decision of Delhi High Court in M/s Vazir Sultan Tobacco Co. Ltd. v. Union of India and Ors. 1981 ELT 140 (Delhi). In para-12 of the judgment, the High Court held 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.
One more point requires mention; the limitation under Section 27(1) of the Act applies to a claim for a refund of any duty paid by a person in pursuance of an order of assessment made by an Officer of Customs lower in rank than an Assistant Collector of Customs., I have already referred to the precedents where collection not authorised by the Act or payment made. under mistake of law cannot be treated as duty within the section. The Customs Act has no provision like Sub-section-5 of Section 1 IB of the Central Excises and Salt Act, 1944 (Section 11B was added by Customs & Central Excises and Salt Act and Central Board of Revenue (amendment Act, 1978) and came into force from 17.11.1980).
Section 11B of this Act also sets down time limit of 6 months for claim of refund of duty. Sub-section-5 clarifies that this Section shall also apply to a claim for refund of any amount collected as duty of Excise, made on the ground that the goods in respect of which such amount was collected were not excisable or were entit ed to exemption from duty.
In the absence of a parallel provision in. Customs Act, amount collected not authorised by the Act cannot be treated as duty within the meaning of Section 27 (1) of the Act. I 7. The Supreme Court has tune and again laid down that the State must not defeat the just claims of citizens by raising technical pleas of limitation. In fact many cases have been cited before us, where in cases of collection of amount not authorised by law or payment made under mistake of law, the Government of India directed refund of such amount ignoring limitation under Section 27 of the Act and applying limitation under the Limitation Act, 1963. The lower authorities, like the Appellate Collectors (now Collector Appeals) also did so. If the Tribunal rejects such claims, the lower authorities would also do the same thing. The result would be that a citizen in such a case would have no alternative except to approach the High Court in its writ jurisdiction.
8. The Tribunal has very wide powers and in view of the law laid down by the Supreme Court and High Courts, certainly can, in clear and undisputed cases of collection of an amount not authorised by law or payment made under mistake of law, grant suitable relief and order refund ignoring Section 27 of the Act and applying the limitation under the General law of Limitation. In view of Orissa High Courts' judgment referred to above, I would revise my views expressed in M/s Associated Capsules Pvt. Ltd. (Supra).
9. The question in the present case, however, is as to what should be done, whether recourse should be had to the course adopted in Vazir Sultan Tobacco Co. (Supra) and the matter remanded to the authorities for dealing with appellants' applications as representation and then dispose of the same or order refund. The admitted position in the present case is that the amount collected as countervailing duty from the appellants was without authority of law. I would, therefore, order refund of the same.
In accordance with the decision of the majority of Members of the Bench, the Appeal is rejected.