Shri M.V.N. Rao, Addl. Secretary and D.N. Lal, Joint Secretary
1. This is a batch of three revision applications received from the same petitioners on common issue and, therefore, these are being dispose of through this order.
2. The Government of India have carefully considered all the three revision applications and the points urged at the time of personal hearing granted to the petitioner's counsel. The facts briefly are that the petitioners are claiming refund of C.V. duty paid on consignments of silicone oil/silicone fluid in all these three cases, and in the case covered by F. No. 371/3001/78-Cus. II, the Government observe that the appeal failed on account of limitation under Sec. 128 of the Customs Act, 1962. In the other two cases, the claim failed on account of limitation under Sec. 27(1) of the aforesaid Act. The break-up is as follows :-
1. F. No. 371/3001/78-Cus. IITime barred under Section 128Date of communication of theorder-in-original. 9-3-78Date of filing of the appeal 1-7-78Delay beyond three months but No explanationwithin 6 months. for delay2. F. No. 371/3002/78-Cus. IITime barred under Sec. 27(1)Duty paid vide B/E CashNo. 3515 dated 15-11-77Dated of filing of the refundclaim 10-7-783. F. No. 371/3003/78-Cus. IITime barred under Sec. 27(1)Duty paid vide B/E CashNo. 508 dated 1-12-77Date of filing of the refundclaim 10-7-78
3. The delays in filing of the respective claims are not in dispute but the petitioners main contention is that the goods imported are not excisable and therefore, the time limit stipulated under the Customs Act would not apply in the matter of settlement of such claims, particularly so when the recovery has been made under a mistake of fact as well as under the law. They have also relied in this context on the provision of Section 72 of the Indian Contract Act.
4. A careful perusal of the records of the case shows that in none of these cases the Customs authorities had gone into the merits of the claim. In respect of the claim where the appeal failed as time-barred the original claim failed as unsubstantiated. In the other two cases the refund claims were rejected under limitation under Sec. 27(1) without going into the merits of the case and the appellate authority had upheld the original order on the short point of limitation.
5. The composition of the products or the test report is not on record. The petitioners, however, are presumably relying on Board's tariff advice No. 13/78 dated 13-3-78 to justify their contention that the goods were not liable to C.V. duty. The Government would have gone into the question of excisability of the product in question in detail in order to determine the validity of their contentions but for the reasons set out hereunder.
6. The Government observe that all these claims are barred by limitation either under Section 27 of the Customs Act, 1962 or under Section 128 ibid. Having been filed after the period of limitation prescribed under the Act had expired. The advocate at the time of hearing had argued that it is a well settled principle that if the goods are held to be non-excisable, then the time limit under Sec. 27(1) of the Customs Act, 1962 becomes inapplicable and the claims are guided by common law. It has also been urged that this principle has already been accepted by the Government and favourable orders have been issued in the past to various parties in India.
7. The Government have carefully considered this argument and observe that these decision relate to a period when the Central Excise Tariff was covering in its ambit a few specific items. When the present consignments were imported, there was an entry viz. item 68 which existed in the Central Excise Tariff covering all residual items which were not covered within the preceding 67 entries. Thus, with the introduction of Item 68 in the CET, if a particular product, even assuming is not covered under Sl. No. 1 to 67, it would fall under item 68 and in a case of this type, there can be no occasion of the levy being without jurisdiction. It may be true that the product imported by the petitioners may not be classifiable under item 15A of the CET but in that case they would fall under the item 68 of the CET. In short, this would mean that the assessing authority has got an inherent jurisdiction to classify any article for the purpose of Central Excise classification and while classifying such products one might fall in error and classify the goods wrongly. The wrong classification may result in excess recovery but it cannot be said that a levy or classification was without jurisdiction. Thus, the Government observe that the decision relied upon by the petitioners in respect of limitation were given at a time when only a few specific items were under the excise net, clarifying that if an assessing authority classifies a non-excisable goods as excisable and levy duty on the same the said authority crosses the jurisdiction as such levy is not authorised under the law. It could be argued that in such cases the time bar under Sec. 27 would not apply because assessment itself is ab initio void. This position has undergone a change after the introduction of the item 68 of the tariff. The Government also observe that the quasi-judicial authority functioning under the Customs Act cannot ignore the same Act and take recourse to the general law of limitation for the purpose of grant or refund. If the petitioners were entitled for a refund and if such right of refund is conferred by the statute and if there is any pre-condition imposed to the exercise of such right like filing of an application for refund within a prescribed time limit, that would be binding on that person concerned and he cannot claim such refund without fulfilling such prescribed conditions. In that context, the Government observe in a similar situation the Hon'ble High Court of Calcutta in the matter of Incheck Tyres Ltd. vs. Asstt. Collector of Customs - 1979 ELT J 236 had held that if an authority has illegally collected an amount, the aggrieved party is entitled to the refund of the same. However, if such right of refund is conferred by the statute and there is any condition imposed to the exercise of that right, that would be binding on that person concerned and he cannot claim his right to refund without such condition. While coming to this observation the Hon'ble High Court placed its reliance on a decision of the Supreme Court in the case of M/s Burmah Construction Company vs . The State of Orissa and others : AIR1962SC1320 . The High Court has further held that even if it is a case of unlawful recovery of extra duty, the petitioner's right to refund is governed by the statute which provides the condition and it is not open to the petitioners to contend that they had such a right independent of the statute or they could agitate for refund even after the prescribed time limit specifically provided had expired. In this view of the matter, the Government of India uphold the order-in-appeal in respect of revision application covered by F. No. 371/3002 and 3003/78-Cus. II. These two revision applications are rejected.
8. In respect of the revision application covered by F. No. 371/3001/78-Cus.II, the Government of India observe that the original claim for refund was in time and it was rejected as unsubstantiated by the Asstt. Collector. Having regard to the various extenuating factors, the Government are pleased to condone the delay beyond 3 months in filing the appeal vide proviso to Sec. 12 as the appeal was preferred within the maximum period of 6 months. This case is accordingly remanded back to the Assistant Collector for giving the petitioners another opportunity to substantiate their claim and pass appropriate order in this matter. The three revision applications are disposed of accordingly.