1984 (6) TMI 154 - AT - Customs

Appellate Tribunal grants duty refund for stolen goods under Customs Act, setting precedent

The Appellate Tribunal CEGAT, Bombay allowed the appeal, granting the refund claim of duty for 34 missing bags of Nylon Moulding Powder due to possible ... Refund - Short-landing Issues:- Interpretation of Sections 13 and 23(1) of the Customs Act, 1962 for claiming refund of duty.- Whether shortage due to theft or pilferage qualifies for refund under Section 23(1).Analysis:The judgment by the Appellate Tribunal CEGAT, Bombay involved a dispute regarding the refund claim of duty by the appellants for 34 missing bags of Nylon Moulding Powder imported by them. The order-in-appeal and order-in-original had rejected the refund claim, citing that it did not fall under Section 13 or Section 23(1) of the Customs Act, 1962. The appellants filed a Revision Application that was transferred to the Tribunal under Section 31B of the Act.The Tribunal noted that the Customs examination at the Docks confirmed the shortage of 34 bags in one of the pallets, indicating a possible pilferage. The appellants argued that they were entitled to a refund under Section 23(1) due to the physical impossibility of delivering the missing bags, supported by documentary evidence. The Respondent Collector contended that since the out of charge order was passed, refund under Section 13 was not applicable, and Section 23 did not apply as there was no total destruction or loss as per the evidence.After considering the submissions, the Tribunal referred to previous decisions and established that the term 'lost or destroyed' in Section 23(1) encompassed losses due to theft or pilferage, including loss suffered by the party. The Tribunal upheld the appeal, directing the Customs authorities to provide consequential relief to the appellants within four months from the date of the order.This judgment clarifies the scope of Sections 13 and 23(1) of the Customs Act, 1962, emphasizing that losses due to theft or pilferage can qualify for a refund under Section 23(1) if physical delivery becomes impossible. The decision aligns with previous rulings and sets a precedent for interpreting the term 'lost or destroyed' in a broad sense to include losses beyond mere physical destruction.