Mistaken payment of customs duty may escape limitation where the levy was collected without authority of law.

Refund of customs duty and countervailing duty paid under a mistake of law was held to lie outside the limitation bar in Section 27 of the Customs Act. The Court accepted that the import duty had been collected without authority of law and that the claim arose from restitution after the legal position on the product was clarified. On those facts, Section 27(1) did not apply to defeat the refund claim, and the petitioners were entitled to repayment of the duty paid.

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Issues: Whether refund of customs duty and countervailing duty paid under a mistake of law could be denied as time-barred under Section 27 of the Customs Act.

Analysis: The duty had been paid on import of glass fibre yarn and refund was sought after the governmental position on the product was clarified. The decisive question was whether the limitation in Section 27 of the Customs Act applied where the levy itself was collected without authority of law. The Court accepted that, on the facts, the payments were made under mistake of law and that the bar of limitation under Section 27(1) did not apply to such a claim for restitution.

Conclusion: The refund claim was not barred by limitation and the petitioners were entitled to refund of the duty paid.

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