Customs refund under amended Section 27 remained governed by prevailing High Court law on captive consumption and excess duty.

The amended refund provisions in Section 27 of the Customs Act, 1962 were considered in relation to excess customs duty paid on goods used as an ingredient in manufacture. The Supreme Court's decision in Mafatlal Industries Ltd. had left the captive-consumption issue open, and the Bombay High Court ruling on that point was not stayed. In that setting, the Collector was justified in following the prevailing High Court view while deciding the refund claim. The amendment to Section 27 did not displace the Collector's refund order, and the departmental challenge failed.

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Issues: Whether the amended provisions of Section 27 of the Customs Act, 1962 applied to a claim for refund of excess customs duty paid on goods used as an ingredient in the manufacture of other goods.

Analysis: The Supreme Court's decision in Mafatlal Industries Ltd. left the question relating to captive consumption open, and the Bombay High Court's ruling on the point had not been stayed. In that situation, the Collector was justified in following the prevailing High Court decision while dealing with the refund claim.

Conclusion: The amended Section 27 did not displace the Collector's order on the refund claim, and the departmental challenge failed.

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