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PETITIONER: MADRAS RUBBER FACTORY LTD.

       Vs.

RESPONDENT: THE UNION OF INDIA & ORS.

DATE OF JUDGMENT03/12/1975

BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. MATHEW, KUTTYIL KURIEN GOSWAMI, P.K.

CITATION:  1976 AIR  638            1976 SCR  (2) 864  1976 SCC  (2) 255

ACT:      Customs  Act-Section  27(1)-Limitation  for  refund  of claims.

HEADNOTE:      "V. P. Latex" imported by the appellants was treated as falling under  item 87  of the  Indian Tariff  Act 1934, the custom Authorities  and custom duty was charged, in addition to a  countervailing duty  under item  15A  of  the  Central Excise Tariff,  in accordance with the Central Salt & Excise Act 1944.  The appellants  contending that  V.P. Latex is an item of  raw-rubber covered  only by  item 39  of the Indian Tariff Act  1934 preferred  refund-claim under section 27(1) of the Customs Act before the Assistant Collector, which was dismissed on  the ground  of limitation.  The  appeal  under section 128(1)(b) and the Revision failed.      Dismissing the appeals, by special leave the Court. ^      HELD: In  the instant  case, there  was nothing to show that duty  was paid  under protest,  general or specific and therefore the claim was not within the period of limitation. The view  taken  by  the  authorities  on  the  question  of limitation was correct. [867-DE]      Dunlop India  Ltd., etc.  v. Union of India, [1976] (2) S.C.R., P. 98 referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal Nos. 1565- 1569/73.      Appeals by Special Leave from the orders Nos. 4844-4848 of 1972  dated 25th  November 1972  of  the  Central  Govt., Ministry of Finance, Govt. of India.      D. V. Patel and K. R. Nambiyar for the Appellant.      G. L. Sanghi and Girish Chander for the Respondents.      The Judgment of the Court was delivered by      UNTWALIA, J.  The appellant company in these appeals by special leave  is a  manufacturer of rubber tyres and tubes. It imports  several raw-materials  including  Pyratex  Vinyl Pyridine Latex  used in  the manufacture of rubber tyres and

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tubes. The  Customs authorities  of the  Government of India have been  charging custom  duty on  V. P.  Latex under  the residuary item  87 of  the Indin Tariff Act, 1934 instead of ICT 39-an  item meant  for charging  duty on raw rubber. The custom duty  charged under item 87 is much more than the one chargeable under  item 39.  A countervailing duty under item 15-A of  the Central  Excise Tariff  in accordance  with the Central Salt  and Excise  Act, 1944  is also  charged if the article imported  is not  treated  as  raw-rubber.  On  five consignments of V. P. Latex imported by the appellant in the year 1968  custom duty  was charged  under item  87  by  the Appraiser pursuant  to his order of assessment. Since he was an officer  lower in  rank than  the Assistant  Collector of Customs the  appellant filed  five applications  before  the Assistant Collector under section 27 (1) of the Customs 865 Act, 1962-hereinafter  referred to as the Act, for refund of the excess  amount of  duty charged.  In  other  words,  the appellant took  the stand  that if  a custom duty would have been charged  on V.  P. Latex  under item 39 then the amount would have been less to the extent of Rs. 3,74,879.49 on the five consignments  in question.  It, therefore,  claimed the refund of  the said  amount, the  details of  which  are  as follows: ___________________________________________________________ Bill No. and date         Date of       Delay         Amount                          claim for                           refund ____________________________________________________________ 1. D. NO. 1644 dated     8-4-69        31/4 Months 50,305.53      24-6-1968 2. D. No. 1024 dated     27-6-69       3 Months    60,339.97      18-9-1968 3. D. No. 1132 dated      8-4-69       2 Months  1,61,615.10      21-8-1968 4. D. No. 1931 dated     10-4-69       1 Months    50,512.71      23-7-1968 5. D. No. 68 dated        10-4-69       4 Months   52,106.18      1-6-1968                                   ____________                                                  3,74,879.49 ____________________________________________________________      Under section  27(1) of  the Act  the  application  for refund had  to be  made before the expiry of six months from the date  of payment  of duty, the date of payment being the date of  the bill  in each  case. Thus  there  was  a  delay varying between 1 month to 4 months in the filing of each of the applications  for refund.  The  Assistant  Collector  of Customs dismissed  the applications  on the ground that they were filed  out  of  time.  The  appeals  to  the  Appellate Collector of  Customs filed  under section 128(1) (b) of the Act failed. The appellant took the matter in revision to the Central Government  under section  131. The  revisions  were dismissed by  the Central  Government by  their order  dated November 29, 1972 stating therein:           "The Govt.  of India have carefully considered the      reasons advanced  by the  petitioners for their failure      to  prefer  the  claims  for  refund  within  the  time      stipulated under  section 27  of the Customs Act, 1962,      but  see   no  justification   to  interfere  with  the      appellate  orders.   The  revision   applications  are,      therefore, rejected." These appeals were filed from the said order after obtaining special leave of this Court.      Mr. D.  V. Patel  learned  counsel  for  the  appellant submitted that  in view of the recent decision of this Court

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in Dunlop  India Ltd.  etc. v.  Union of  India & Ors. V. P. Latex was  chargeable  to  duty  under  item  39  only.  The applications filed by the appellant for refund of the excess amount have  erroneously been  dismissed on  the  ground  of having been  filed out  of time.  Counsel submitted that the appellant used  to  pay  custom  duty  not  as  and  when  a particular consignment  was received  but by making deposits in a running account. Hence no parti- 866 cular date  of payment  could be  assigned in  respect of  a particular consignment.  He further  submitted that the duty was paid  under protest  and hence under the proviso to sub- section (1)  of section 27, the limitation of six months did not apply.  Mr.  G.  L.  Sanghi,  learned  counsel  for  the respondents contended  that no  case of  running account had been made  before the  authorities below  and that there was nothing to show that the duty had been paid under protest in relation to any of of the five consignments.      It is  no doubt  true that  in view  of the decision of this Court mentioned above the custom duty was chargeable on import of  V. P.  Latex under item 39. The authorities below do not  seem to  have decided the refund applications of the appellant on  merits. They have dismissed them merely on the ground of  limitation. The  only question,  therefore, which falls for  determination by  us is  whether the applications for refund were filed out of time.      Section 27 reads as follows:           "27. (1)  Any person  claiming refund of any duty,      paid by him in pursuance of an order of assessment made      by  an  officer  of  customs  lower  in  rank  than  an      Assistant Collector  of Customs may make an application      for refund  of such  duty to the Assistant Collector of      Customs before  the expiry  of six months from the date      of payment of duty:           Provided that  the limitation  of six months shall      not apply where any duty has been paid under protest.           Explanation-Where any  duty is  paid provisionally      under section  18, the  period of  six months  shall be      computed from  the date of adjustment of duty after the      final assessment thereof.           (2) If  on receipt  of any  such  application  the      Assistant Collector,  of Customs  is satisfied that the      whole or  any part  of the  duty paid  by the applicant      should be  refunded  to  him,  he  may  make  an  order      accordingly.           (3) Where,  as a  result of  any order  passed  in      appeal or  revision under  this Act, refund of any duty      becomes due  to any  person,  the  proper  officer  may      refund the  amount to such person without his having to      make any claim in that behalf.           (4) Save  as provided  in section 26, no claim for      refund of  any duty  shall  be  entertained  except  in      accordance with the provisions section. The  appellant’s  case  obviously  and  admittedly  was  not covered by  sub-section (3)  as it  had not  challenged  the order of  assessment in any appeal or revision. Nor was it a case where any duty was paid provisionally under section 18. The appellant’s  case was  governed by  sub-section  (1)  of section 27.  No. case  of any  running account was set up by the appellant  nor was there anything in the records of this case to  substantiate it. Custom duty was paid in respect of each of  the five consignments on the date of its respective bill. Ultimately this 867 position could  not be  disputed before  us. The  appellant,

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however, contended  that the  duty  was  paid  always  under general protest  which  covered  the  cases  of  these  five consignments also.  Hence under  the proviso  to sub-section (1) the limitation of six months does not apply.      Our attention  was drawn  to  several  letters  in  the records of the appeals before us to substantiate the plea of payment under protest, but none of them helps the appellant. We may  refer to  only two  of them.  The appellant  wrote a letter on  February 8,  1968 to  the Assistant  Collector of Customs, Madras  making out  a case therein that V. P. Latex was assessable  to duty  under item  39-ICT. Finally in this letter a  protest was  made for the assessment of duty under item 87  on V. P. Latex imported by the company in the past. This letter  was written  before the  five  consignments  in question were  imported and  duty paid thereon. The protest, therefore, embodied  in the  letter  aforesaid  was  not  in respect of  any of  these consignments.  A letter written on July 15,  1968 was  a letter written at a point of time when two out  of the  five consignments  had been  imported;  but three were  imported after the writing of this letter by the appellant to  the Asstt.  Collector of Customs, Madras. This letter relates  to a  consignment of 59 drums of V. P. Latex which  could   not  be   connected  with  any  of  the  five consignments in question. Thus there is nothing to show that duty on them was paid under protest, general or specific.      It was lastly contended on behalf of the appellant that in view  of the  recent decision  of this  Court, the  Govt. should be  directed to  refund  the  excess  amount  of  Rs. 3,74,879.49 charged  on the five consignments. We are unable to do  so because  the present  appeals arising  out of  the orders made  by the Government of India in proceedings under section 27(1) of the Act have got to fail on the ground that the view  taken by  the authorities below on the question of limitation could not be shown the incorrect.      In the result the appeals fail and are dismissed. There will be no order as to costs. S.R.                                      Appeals dismissed. 868