RAYMOND WOOLLEN MILLS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition filed under Article 226 of the Constitution of India, the petitioners are challenging decision recorded by CEGAT confirming the order passed by the appellate authority and Assistant Collector rejecting the refund claim on the ground that the claim is barred by provisions of Section 27 of the Customs Act. The facts lies in a narrow compass and are required to be briefly stated to appreciate the grievance of the petitioners.

(2.) The petitioners imported liquid paraffin by two separate consignments in March 1977. The petitioners presented bill of entry and paid customs duty under Tariff Item 27.10(1) at the rate of 40% and auxiliary duty at the rate of 5%. The petitioners claimed that the collection of countervailing duty by the Customs authorities was not justified under Excise Tariff Item No. 11A. The Department did not accept the claim and as the petitioners were keen to clear the goods, the countervailing duty/additional duty at the rate of 20% ad valorem and Rs. 190/- per metric ton was paid by the petitioners. The petitioners thereafter filed two separate refund applications on February 1, 1979 and claimed refund of sum of Rs. 1,08,242.60 in respect of the two consignments. The Assistant Collector of Customs (Refund) rejected the claim by order dated February 5,1979 on the ground that refund claim was not received within six months from the date of payment of duty and accordingly the claim was barred under Section 27(1) of the Customs Act. The decision recorded by the Assistant Collector was confirmed in two separate appeals preferred before the Appellate Collector of Customs. The Appellate Collector concurred with the view taken by the Assistant Collector. The decision of the Appellate Authority was challenged by the petitioners by filing two revision applications before the Ministry of Finance, Department of Revenue, New Delhi. The revisions were transferred after constitution of CEGAT and the revision applications were rejected by order, copy of which is annexed as Exhibit J' to the petition. These orders are under challenge in this petition filed under Article 226 of the Constitution of India.

(3.) Shri Vora, learned counsel for the petitioners, submitted that the three authorities below were in error in rejecting the refund claim on the ground that the claim was barred by provisions of sub-section (1) of Section 27 of the Customs Act. The sub-mission is correct and deserves acceptance. It is now well settled by catena of decisions of this Court that the limit prescribed under Section 27 is not available as a defence in the proceedings filed in this Court under Article 226 of the Constitution of India. Though the authorities constituted under the Customs Act are bound by the provisions of Section 27, the defence is not available to the Department when in writ jurisdiction it is established that the recovery of duty was in violation of law. It is now well established that the Department cannot retain duty which was recovered without any authority of law. Shri Rege, learned counsel appearing on behalf of the Department, submitted that there is nothing on record to establish that duty was recovered without any authority of law. The learned counsel invited our attention to the observations made by CEGAT to the following effect: