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Issues: Whether refund of customs duty paid on goods that were not traceable could be refused solely on the ground of limitation under Section 27 of the Customs Act, and whether the High Court could direct refund in exercise of jurisdiction under Article 226 of the Constitution of India.
Analysis: The petitioner had paid customs duty on imported goods which were subsequently found not to be available for clearance. The departmental authorities rejected the refund claim as time-barred under Section 27 of the Customs Act. The Court accepted that the goods had not been delivered and that the duty had been recovered even though the imported goods were not available, making the retention of duty unjustified. In these circumstances, the limitation in Section 27 did not prevent the Court from granting relief where the levy and collection were without authority of law.
Conclusion: The refund was directed in favour of the petitioner, and the rejection of the refund claim on limitation was not sustained.
Final Conclusion: The petition succeeded, and the customs authorities were directed to refund the duty amount, with the claim for interest declined.
Ratio Decidendi: When duty is retained despite the imported goods being unavailable and the collection is without authority of law, the writ court may order refund notwithstanding the statutory limitation applicable to departmental refund claims.
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