HINDUSTAN AERONAUTICS LTD. Vs. COMMISSIONER OF CUSTOMS,

JUDGEMENT

(1.) The issue involved in this Appeal, filed by M/s. Hindustan Aeronautics Ltd, is whether the Refund Claim filed by them on 18.2.95 in respect of customs duty paid during January to June 1993 on the imports of parts of Light Combat Aircraft, is admissible to them.

(2.) Shri P.C. Anand, Ld. CA submitted that there was a Notification No. 228/88 which provides exemptions from payment of customs duty on the impugned goods; that this Notification was amended by Notification No. 234/92 making it valid upto 31.12.92; that the appellants were pursuing the matter with the Ministry of Finance for extending the application of this Notification for subsequent period and accordingly they had field a letter of protest with the department saying that they would pay duty under protest; that subsequently the Central Government issued a special order under the provisions of Sub Section (2) of Section 25 of the Customs Act giving the exemption from Customs Duty; that this special order was issued on 10.1.95; that the proviso to Section 27 of the Customs Act provides that in case goods are exempted from payment of duty by special order issued under sub section (2) of Section 25, the limitation of one year or six months, as the case may be, shall be computed from the date of issue of such order. The Ld. CA mentioned that as the Refund claim has been filed on 18.2.85 i.e. within 38 days of the issue of the special order, the Refund claim is not hit by time limit specified under Section 27 of the Customs Act. He, further, submitted that it has been opined by the Attorney General of India that exemption can be passed under Section 25(2) even after the goods have been imported, Exemption may also be granted even after the duty has been and in such event duty paid has to be refunded; that the opinion of the Attorney General was circulated by Board under letter F.No.384/947/85 -AU dt.24.7.87 and was recirculated vide circular No. 12/97. He, therefore, contended that in view of the Board's circular, they are eligible for the refund of the duty. In addition, the Appellate Tribunal also in the following cases have confirmed that the Refund is admissible to them if any special order under Section 25(2) has been issued subsequent to the import:

(3.) Countering the submissions, Shri Arumugam, Ld. DR, submitted that these points were not raised before both the lower authorities and they had no opportunity, therefore, to consider this aspect of the matter; that the Refund claim was dismissed by the Assistant Commissioner as well as by the Commissioner (Appeals) only on the question of time limit as specified under Section 27 of the Customs Act. He also mentioned that the letter of protest field by them was rejected by the Assistant Commissioner and as such they cannot get any benefit out of letter of protest. In reply, the Ld. CA submitted that there are decisions according to which if letter of protest has been field the time limit specified under Section 27 does not run.