Customs refund and assessable value principles bar levy on statutory cess added to export duty computation

A civil suit for refund was maintainable despite Section 27 of the Customs Act where the customs levy itself was without jurisdiction and there was no effective statutory machinery to recover money collected without authority of law. The Court held that cess on exported mica could not be added to the assessable value under Section 14 for export duty, because a statutory impost is not part of the goods' value; the resulting levy was ultra vires. Once the assessment was found illegal, the amount collected was refundable, and consequential relief including interest and costs followed. The assessment orders were quashed to the extent they included the cess in the taxable value.

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Issues: (i) whether the suit for refund was maintainable notwithstanding Section 27 of the Customs Act, 1962; (ii) whether cess on exported mica could be treated as part of the assessable value for levy of export duty under Section 14 of the Customs Act, 1962; (iii) whether the plaintiff was entitled to refund and consequential relief.

Issue (i): whether the suit for refund was maintainable notwithstanding Section 27 of the Customs Act, 1962

Analysis: Section 27 was held to govern claims for refund of duty collected within the statutory framework of the Customs Act. Where the duty itself was levied without jurisdiction and without authority of law, the provision did not bar a civil suit. The Court also relied on the absence of any effective machinery under the Customs Act for refund of taxes illegally collected or collected beyond power.

Conclusion: The suit was maintainable and the objection based on Section 27 failed.

Issue (ii): whether cess on exported mica could be treated as part of the assessable value for levy of export duty under Section 14 of the Customs Act, 1962

Analysis: The levy of export duty was made by adding the mica cess to the value of the exported goods. The Court held that cess under the Mica Mines Labour Welfare Fund Act, 1946 was not part of the assessable value under Section 14 of the Customs Act, 1962. A duty cannot be levied on an amount which is itself a statutory impost and not part of the goods' value. The assessment was therefore beyond the competence of the customs authorities and amounted to an illegal and ultra vires levy.

Conclusion: Cess could not be included in the assessable value and the levy was illegal.

Issue (iii): whether the plaintiff was entitled to refund and consequential relief

Analysis: Once the levy was found to be without jurisdiction, the amount collected was refundable irrespective of the limitation objection under Section 27. The Court held that money recovered without authority of law must be returned, and the plaintiff had sued promptly after discovery of the mistake. Consequential relief including interest was also warranted.

Conclusion: The plaintiff was entitled to refund, interest, and costs.

Final Conclusion: The assessment orders were quashed to the extent they included cess in the taxable value, the refund claim succeeded, and the plaintiff obtained monetary and consequential relief.

Ratio Decidendi: Where customs duty is levied on an amount that cannot legally form part of the assessable value, the collection is without jurisdiction and a civil suit for refund is maintainable despite the statutory refund limitation.

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