Time-barred customs duty cannot be adjusted against refund; alternative remedy and technical objections did not defeat relief.

Expiry of the statutory period for recovering short-levied customs duty barred not only the remedy but also enforcement of the liability, so time-barred duty could not be set off against a refund payable to the importer. Writ relief was not refused merely because an alternative remedy existed, since the petition was filed shortly after communication of the impugned decision and the delay was not unreasonable. The refund claim was also not defeated on the technical ground that the order had been made against customs officers rather than solely against the Union, as the Union was already before the court. The attempted adjustment was therefore disallowed and the refund claim succeeded.

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Issues: (i) Whether, on a proper construction of sections 20 and 39(1) of the Sea Customs Act, 1878, the Customs authorities could recover or set off a time-barred short-levied duty against amounts refundable to the importer; (ii) whether relief should be declined on the ground of availability of an alternative remedy and alleged delay and laches; and (iii) whether the refund relief could be denied because the order was made against Customs officers and not solely against the Union of India.

Issue (i): Whether, on a proper construction of sections 20 and 39(1) of the Sea Customs Act, 1878, the Customs authorities could recover or set off a time-barred short-levied duty against amounts refundable to the importer.

Analysis: Section 20 imposes the duty, while section 39(1) provides the machinery and time-limit for demand where duty has not been levied or has been short-levied. The provisions were read together to mean that, after expiry of the statutory period of three months from the relevant date, not only is the remedy barred but the liability to recover the deficiency in duty cannot be enforced. A time-barred demand therefore cannot be used as a basis for withholding or adjusting sums otherwise refundable to the importer.

Conclusion: The Customs authorities were not entitled to set off the time-barred short-levied duty against the refund payable to the importer.

Issue (ii): Whether relief should be declined on the ground of availability of an alternative remedy and alleged delay and laches.

Analysis: The availability of an appellate remedy did not by itself compel refusal of writ relief, as the grant of such relief remained discretionary. The petition was filed shortly after the impugned decision was communicated, and the delay was not unreasonable. The claimed alternative civil remedy was also not treated as a ground to refuse relief in the circumstances.

Conclusion: Relief could not be refused on the grounds of alternative remedy, delay, or laches.

Issue (iii): Whether the refund relief could be denied because the order was made against Customs officers and not solely against the Union of India.

Analysis: Although there was force in the objection that the operative relief ought properly to have been directed against the Union of India, the Union was already a party to the proceeding and had been impleaded in the appeal. Refusal of relief on this technical ground alone would have served no useful purpose and would only have caused further delay and expense.

Conclusion: The refund relief was not to be denied on this technical ground.

Final Conclusion: The importer was held entitled to the refund amount, and the attempted adjustment against a time-barred customs demand was disallowed; the appeal therefore failed.

Ratio Decidendi: Where a customs statute makes recovery of short-levied duty subject to a strict limitation period, expiry of that period bars not merely the remedy but also enforcement of the liability, and such time-barred dues cannot be set off against an admitted refundable amount.

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