NIBS INDIA Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner are a partnership firm and are small scale unit having factory at Thane and the petitioners manufacture drawing pens, nibs etc. For the purpose of manufacture the petitioners imported seven consignments during March to October 1986 and cleared the same for home consumption under Open General Licence in the capacity as actual users. The goods were classified under Heading 90.17 sub-heading 9017.20 of the First Schedule to the Customs Tariff Act, 1975 . The goods were charged to duty at the rate of 60% ad valorem basic customs duty plus 40% ad valorem auxiliary duty plus 15% ad valorem additional duty. The additional duty was levied under Section 3(1) of the Customs Tariff Act.

(2.) The petitioners claim that levy of additional duty was contrary to law in view of Notification No. 71/86 dated February 10, 1986 as amended by Notification No. 164/86 dated March 1,1986. The petitioners preferred refund applications in respect of levy of additional duty before the Assistant Collector of Customs on April 11, 1987. The applications for refund were rejected by the Assistant Collector of Customs, Air-cargo Complex, Bombay by various orders holding that the refund claims were lodged after expiry of six months of time limit stipulated under Section 27 of the Customs Act, 1962 and therefore were barred by limitation. The orders passed by the Collector of Customs are under challenge in this petition filed under Article 226 of the Constitution of India.

(3.) Shri Nankani, learned counsel appearing on behalf of the petitioners, submitted that the conclusion of the Assistant Collector that the claims were barred under Section 27 of the Customs Act is incorrect. It is now well settled that in respect of duty recovered without authority of law the refund cannot be declined on the ground of limitation as prescribed under Section 27 of the Customs Act. The question therefore which requires determination is whether the additional duty levied in respect of import made by the petitioners was in violation of law. Shri Nankani strongly relies upon the exemption notification dated February 10, 1986 as amended on March 1, 1986. Before referring to this notification, it is desirable that the entries under the heading 90.17 and 9017.20 are set out.