TaxTMI 
TaxTMI 
2025 (11) TMI 1229
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.... 2022127800000000A259, issued by Respondent No. 1, whereby the Petitioner's claim for refund of customs duty amounting to Rs. 35,37,358/- was rejected/disposed of. The Petitioner, therefore, seeks issuance of a writ of mandamus directing Respondent No. 1 to refund the aforesaid amount along with applicable interest, in accordance with the provisions of Sections 13, 23 and 27A of the Customs Act, 1962. The challenge arises in the background of the relevant facts and circumstances set out hereinbelow. 4. This is an unfortunate case where the Petitioner, despite having duly complied with all statutory obligations and paid the necessary customs duty, is forced to approach this Court due to a prolonged and unresolved dispute between Respondent No. 1 and Respondent No. 2. The Petitioner, who has neither received the imported goods nor obtained a refund of the duty paid, has had to run from pillar to post for nearly three years, caught between two public authorities, each seeking to shift responsibility onto the other. 5. The two public authorities utilise taxpayers' money or public funds, and therefore have no hesitation in raising various issues to delay the refund of customs duty....
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....rough its bank account maintained with the ICICI bank on 27.04.2022, b) a sum of Rs. 7,22,657.88/- debited through its SCRIP license bearing No. 2112032025 on 29 December 2021 and Rs. 4,19,162.21/- debited through its SCRIP license bearing No. 2112032029 on 29 December 2021. 10. On 10 May 2022, M/s. Mitsutor Shipping Agency Pvt. Ltd., the Shipping Agent of the Carrier, had issued an Agent Delivery No. DOINBOM120220510573665, whereby it was recorded that the Petitioner's goods, comprising 100 packages weighing 100.600 MTS, have arrived at the port managed by the Respondent No. 2. 11. However, upon non-issuance of Landing/Discharge Certificate by the Respondent No. 2, the Petitioner's Custom House Agent requested a joint survey of the premises of the Respondent No. 2. On 8 June 2022, M/s carried out a joint survey of the premises of the Respondent No. 2. Wilson Surveyor and Adjusters Pvt. Ltd. and M/s. Zebec Marine Services Pvt. Ltd. The surveyors vide their joint report dated 8 June 2022 explicitly recorded that they were "unable to trace the above subject 100 big bags". 12. The Petitioner, having failed to trace or take delivery of the imported goods, lodged a complaint on....
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....ction was that the closure letter sought by the Respondent No. 1 was supposed to be issued by the Respondent No. 1 itself. 19. Mr Jaipal submits that the Respondent No. 1 avoided all kinds of communication from the Petitioner seeking the above-mentioned closure letter against the Bill of Entry to illegally hold on to the customs duty paid by the Petitioner. He further submits that the Respondent No. 1 is trying to take advantage of its own wrong by not issuing the closure letter against the Bill of Entry. 20. Mr. Jaipal further submits that the Respondent No. 2, despite having issued a Certificate of Short Landing, whereby it certified that the goods of the Petitioner never arrived, the Respondent No. 2, through its legal representatives, made a complete contrary representation before this Court in Board of the Mumbai Port Authority v. The State of Maharashtra & Anr. Criminal Application No. 416 of 2023 The Respondent No. 2, through its advocates in the aforesaid case, admitted that the Petitioner's goods had gone missing from the custody of the Respondent No. 2, who was holding the same in lawful capacity. 21. Mr Jaipal, relying upon Section 13 of the Act, submits that it....
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....e is contradicted by the Shipping Line's communication dated 13.10.2025, confirming that the entire manifested cargo was duly discharged at the port. He submits that in light of the dispute between the Shipping Line and the Port Authority, the IGM has not been amended to reflect any short landing, and hence the refund claim cannot be processed until the Bill of Entry is formally closed. 27. Mr. Mishra, relying upon Sections 13 and 45 of the Customs Act, 1962, submits that liability for pilfered or short-landed goods lies with the custodian i.e., the Port Authority and not with the Customs Department, unless the goods are cleared for home consumption. He submits that the Petitioner's claim is premature since the police investigation in FIR No. 0034 of 2022 is still pending and the true cause whether theft, pilferage, or short landing remains undetermined. 28. Mr. Mishra lastly argues that the Petitioner has an alternative statutory remedy under Section 128 of the Customs Act to file an appeal before the Commissioner (Appeals) against the letter dated 28.12.2022, and therefore the present Writ Petition under Article 226 is not maintainable. He prays that the Petition be dismiss....
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....ission of liability nor a statement that the goods were discharged and subsequently lost while in the Port's custody. 34. Mr. Mohammed Oomar Shaikh submits that while his client maintains, on the basis of contemporaneous port records, joint survey reports, and the Short Landing Certificate dated 25 April 2023, that the goods in question have short-landed, even assuming without admitting that the goods were actually discharged at the port and subsequently lost, the liability to refund the customs duty would, in any event, rest solely upon Respondent No. 1. 35. Mr Shaikh submits that the statutory scheme of the Customs Act, 1962 draws a clear distinction between cases of pilferage, as contemplated under Section 13, and cases where goods are lost or destroyed for any other reason before clearance for home consumption, as governed by Section 23. He points out that Section 13 applies only where goods are pilfered prior to clearance, in which case the importer is not liable to pay duty, and the custodian becomes liable for the same under Section 45(3). However, in all other cases where goods are lost, destroyed, or rendered unavailable for delivery before the proper officer has mad....
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....stom duty as the Respondent No. 2 is not a custodian as per Section 45 of the Customs Act. 41. Mr Shaikh finally reiterated that Respondent No. 2 neither opposes nor obstructs the Petitioner's refund claim, but denies any liability, negligence, or wrongdoing in respect of the alleged short landing. He prays that the Writ Petition be dismissed as against Respondent No. 2, there being no cause of action or breach of statutory duty attributable to the Port Authority. ANALYSIS AND FINDINGS 42. From the record, it is abundantly clear and indeed an undisputed position that the Petitioner has never received the goods imported under the Bill of Entry No. 8441729 dated 27 April 2022. The Short Landing Certificate dated 25 April 2023, issued by the Respondent No. 2, coupled with the joint survey reports dated 8 June 2022 and 7 September 2022, fortify the position that the consignment of 100 metric tons of Polyvinyl Chloride Resin was never delivered to the Petitioner. Neither authority has, nor could it dispute, this position. 43. This Court does not wish to go into the issue to determine where or under whose custody the loss occurred. The admitted position is that the Petitioner....
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....an application for refund has been made before the date on which the Finance Bill, 2011 receives the assent of the President, such application shall be deemed to have been made under sub-section (1), as it stood before the date on which the Finance Bill, 2011 receives the assent of the President and the same shall be dealt with in accordance with the provisions of sub-section (2): Provided further that the limitation of one year shall not apply where any duty or interest has been paid under protest. (2) If, on receipt of any such application, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied that the whole or any part of the duty and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund: Provided that the amount of duty and interest, if any, paid on such duty as determined by the Assistant Commissioner of Customs or Deputy Commissioner of Customs under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to- (a) ....
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....prejudice to the validity of anything previously done thereunder. (5) For the removal of doubts, it is hereby declared that any notification issued under clause (e) of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette. 27A. Interest on delayed refunds.- If any duty ordered to be refunded under sub-section (2) of section 27 to an applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below five per cent and not exceeding thirty per cent per annum, as is for the time being fixed by the Central Government by notification in the Official Gazette, on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty: Provided that where any duty, ordered to be refunded under sub-section (2) of section 27 in respect of an application under sub-section (1) of that section made befor....
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....hat if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods required under this sub-section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof- (a) to examine the goods in the presence of an officer of customs; or (b) to deposit the goods in a public warehouse appointed under section 57 without warehousing the same. (2) Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor. (3) The importer shall present the bill of entry under sub-section (1) before the end of the next day following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing: Provided that a bill of entry may be presented at any time not exceeding thirty days prior to the expected arrival of the aircraft or vessel or vehicle b....
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....y is returned to him by the proper officer for payment of duty in the case of assessment, reassessment or provisional assessment; or (c) in the case of deferred payment under the proviso to sub-section (1), from such due date as may be specified by rules made in this behalf, and if he fails to pay the duty within the time so specified, he shall pay interest on the duty not paid or short-paid till the date of its payment, at such rate, not less than ten per cent but not exceeding thirty-six per cent per annum, as may be fixed by the Central Government by notification in the Official Gazette: Provided that the Central Government may, by notification in the Official Gazette, specify the class or classes of importers who shall pay such duty electronically: Provided further that where the bill of entry is returned for payment of duty before the commencement of the Customs (Amendment) Act, 1991 (55 of 1991) and the importer has not paid such duty before such commencement, the date of return of such bill of entry to him shall be deemed to be the date of such commencement for the purpose of this section: Provided also that if the Board is satisf....
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....'s liability for duty crystallises only upon such clearance, and if the goods are pilfered or short-landed prior thereto, the incidence of duty cannot be fastened upon the importer. 49. This Court notes with concern that the Petitioner has been compelled to approach multiple authorities over a span of nearly three years, filing repeated representations and grievances, only to be confronted with a bureaucratic deadlock between Respondent No. 1 (Customs Department) and Respondent No. 2 (Mumbai Port Authority). Both Respondents, in their respective affidavits, seek to absolve themselves of liability by shifting the burden of responsibility upon the other. The Petitioner, who has acted bona fide, paid the customs duty in advance, and made diligent efforts to trace the goods, cannot be made to suffer indefinitely due to an inter-departmental tussle in determining or fixing the responsibility for loss of goods. 50. The facts, as they stand, make out a clear case where the Petitioner has paid customs duty for goods which were never received. The Customs Act, 1962, specifically provides in Sections 13, 23, and 27 in such circumstances. Section 13 provides that where goods are pilfere....
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....er came into its custody for delivery. This Court does not find it necessary, nor is it within the scope of the present petition, to adjudicate upon the inter se liability between Respondent Nos. 1 and 2. That is a matter which may be resolved in appropriate proceedings, if so initiated. 55. The contention of Respondent No. 1 that the matter is premature due to the pendency of the police investigation or due to the non-closure of the Bill of Entry is untenable. The criminal investigation pertains to possible theft or pilferage and not to the Petitioner's statutory right to seek a refund of customs duty. The Petitioner's entitlement to a refund arises not from the outcome of the FIR but from the admitted factual position that the goods were never delivered and the Bill of Entry never attained final clearance. 56. The argument of an alternate remedy under Section 128 of the Act also cannot defeat the Petitioner's claim in the present circumstances. The impugned communication dated 28 December 2022 merely returned the Petitioner's refund application without adjudicating upon it. Such a communication is not an appealable order within the meaning of Section 128 and, therefore, the....
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....se of short landing or pilferage, the Petitioner cannot be denied relief. 60. The insistence that the Petitioner now persuades the shipping line or agent to amend the IMD is also grossly unreasonable and lacks any sanction of the law. The shipping line insists that it has delivered the imported goods. Therefore, the Petitioner cannot now be forced to prevail against the shipping line to amend the IMD. This is yet another instance of an unreasonable approach in the present case. 61. Accordingly, whether the non-receipt of goods is regarded as a case of short landing or as loss after unloading but before clearance, the legal consequence remains the same: the importer cannot be held liable to pay customs duty on goods that were never cleared for home consumption. The obligation to refund such duty, along with statutory interest, under Sections 23, 27, and 27A of the Customs Act, 1962, cannot be delayed or avoided. If the customs authorities are confident in their legal and factual position, they can, at most, proceed against the Port authorities and recover the amount from them. We again clarify that this is not our opinion, as we are not assessing the issue of inter se liabilit....