1994 (2) TMI 74 - SC - Customs

Section 27 six-month bar mandatory: refund claims time-barred, authorities rightly rejected late Customs refund applications

The SC dismissed the appeal, holding the refund applications were time-barred under Section 27 of the Customs Act. Section 27's six-month limitation is ... Applications for refund rejected - barred under Section 27 - imported industrial fittings for 400 KV Transmission Lines - Held that:- Section 27 is emphatic in language. It says that an application for refund of duty shall be made before the expiry of six months from the date on which the duty was paid. In the face of this provision, the authorities under the Act, including the Government of India, had no option but to dismiss the appellant's application. As considering the decision of Shri Vallabh Glass Works v. Union of India [1984 (3) TMI 64 - SUPREME COURT] as refereed by assessee to submit that by virtue of Section 72 of the Contract [Act] the bar of limitation contained in Section 27 cannot be invoked by the authorities to reject the appellant's application it has been observed this decision was rendered under the Central Excises and Salt Act and it pertains to the situation obtaining in 1976. Above all, the decision does not refer to any provision of the Central Excise Act prescribing a period of limitation as is done by Section 27 of the Customs Act. We cannot understand the said decision as saying that even where there is a specific provision prescribing a period of limitation, it can be ignored by invoking Section 72 of the Contract Act. Appeal dismissed. Issues:- Application for refund of duty filed beyond the prescribed period under Section 27 of the Customs Act, 1962.- Interpretation of the order of assessment under the Customs Act.- Applicability of Section 72 of the Indian Contract Act in cases of refund of duty.- Comparison of relevant case laws concerning the limitation period for refund applications.Analysis:1. The appellant imported industrial fittings for 400 KV Transmission Lines in 1977 and paid duty under Tariff Item 73.33/40. Subsequently, he sought a refund based on a contention that the goods should have been classified under Tariff Item 85.18-27, attracting a lower duty rate. The application for refund was filed beyond the six-month period prescribed by Section 27 of the Customs Act, leading to rejections at various levels.2. The appellant argued that since there was no formal order of assessment due to no dispute on classification or duty rate during clearance, the limitation period under Section 27 should not apply. However, the court disagreed, emphasizing that the duty assessment and payment are integral parts of the clearance process under Sections 45, 46, 17, and 47 of the Customs Act. The absence of a formal order does not negate the assessment process, as evident from the approved bill of entry.3. The court highlighted the significance of Section 27's clear language mandating refund applications within six months of duty payment. Referring to precedent in Madras Rubber Factory v. Union of India, the court affirmed that authorities are bound by the statutory limitation period, necessitating dismissal of belated refund claims.4. Regarding the applicability of Section 72 of the Indian Contract Act for refund claims, the court distinguished the decision in Shri Vallabh Glass Works v. Union of India, emphasizing the specific limitation provision in Section 27 of the Customs Act. Citing Miles India Limited v. Assistant Collector, the court reiterated that statutory limitation periods prevail over general contract law principles in refund matters.5. Ultimately, the court dismissed the appeals, upholding the rejection of the refund application due to non-compliance with Section 27's limitation period. The appellant was reminded of the availability of other legal remedies despite the dismissal, ensuring no restriction on pursuing alternate courses of action within the law.