Tariff classification of container handling cranes must follow ordinary entry meaning, with excess duty refundable on mistaken assessment.

Imported container handling cranes were held classifiable under Heading 84.22, because the tariff entry for lifting and handling machinery covered a special-purpose crane whose primary function was container handling, while Heading 87.07 applied to mechanically propelled works trucks and similar vehicles used for short-distance transport. The ordinary meaning of the tariff language controlled, and Brussels Explanatory Notes were treated as persuasive only where the Indian tariff text was ambiguous. On refund, duty paid under a mistaken classification was recoverable as money collected without authority of law, with limitation running from discovery of the mistake. The refund claim was held within time under Article 113 of the Limitation Act and Section 72 of the Contract Act.

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Issues: (i) Whether the imported container handling crane was classifiable under Heading 84.22 or Heading 87.07 of the Customs Tariff Act, 1975. (ii) Whether the petitioner was entitled to refund of excess duty, including on the question of limitation.

Issue (i): Whether the imported container handling crane was classifiable under Heading 84.22 or Heading 87.07 of the Customs Tariff Act, 1975.

Analysis: Heading 84.22 covers lifting, handling, loading or unloading machinery, including cranes and transporter cranes, under Section XVI dealing with machinery and mechanical appliances. Heading 87.07 concerns mechanically propelled works trucks and similar vehicles used for short-distance transport or handling of goods under Section XVII. The imported equipment was found to be a special purpose mobile crane whose primary function was handling containers, not transporting goods. The Court treated the description in the tariff entries as controlling and held that the Brussels Explanatory Notes could only be persuasive where the Indian tariff language was ambiguous. On a plain reading, the equipment fit the crane entry and not the vehicle entry.

Conclusion: The imported consignment was classifiable under Heading 84.22 and not under Heading 87.07, in favour of the assessee.

Issue (ii): Whether the petitioner was entitled to refund of excess duty, including on the question of limitation.

Analysis: The duty had been paid under the mistaken classification. A refund claim based on mistake was held not to be defeated by the ordinary appellate limitation where the appellate remedy had become futile by the time the correct opinion was communicated. The Court applied the principle that money collected without authority of law cannot be retained. It further held that the limitation period for relief from mistake runs from discovery of the mistake, and the claim was filed within the period prescribed by Article 113 of the Limitation Act, 1963. The payment was also treated as recoverable under Section 72 of the Indian Contract Act, 1872.

Conclusion: The petitioner was entitled to refund of the excess duty, and the claim was not barred by limitation, in favour of the assessee.

Final Conclusion: The tariff classification was corrected in favour of the importer, and consequential refund of the excess duty was directed to be made.

Ratio Decidendi: Where tariff entries are clear, classification must follow the ordinary meaning of the entry describing the goods, and duty collected under a mistaken and unauthorized classification is refundable if the claim is made within the period running from discovery of the mistake.

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