Case: Madras Rubber Factory Ltd Vs. The Union Of India &amp; Ors

The appellant company in these appeals by special leave is manufacturer of rubber tyres and tubes. It imports several raw materials including Pyratex Vinyl Pyridine Latex used in the manufacture of rubber tyres and tubes. The customs authorities of the Government of India have been charging custom duty on V. P. Latex under the residuary item 87 of the Indian Tariff Act, 1934 instead of ICT 39 - an item meant for charging duty on raw-rubber. The custom duty charged under item 87 is much more than the one chargeable under item 39. A countervailing duty under item 15-A of the Central Excise Tariff in accordance with the Central Salt and Excises Act, 1944 is also charged if the article imported is not treated as raw rubber. On five consignments of V. P. Latex imported by the appellant in the year 1968 custom duty was charged under item 87 by the Appraiser pursuant to his order of assessment. Since he was an officer lower in rank than the Assistant Collector of Customs the appellant filed five applications before the Assistant Collector under Section 27(1) of the Customs Act, 1962 - hereinafter referred to as the Act, for refund of the excess amount of duty charged. In other words, the appellant took the stand that if a custom duty would have been charged on V. P. Latex under item 39 then the amount would have been less to the extent of Rs. 3, 74, 879.49 on the five consignments in question. It, therefore, claimed the refund of the said amount, the details of which are as follows :Bill No. and Date Date of claim Delay Amountfor refund1. D. No. 1644 dated 8-4-69 3 1/2 months 50, 309.5324-6-19682. D. No. 1024 dated 27-6-69 3 months 60, 335.9718-9-19683. D. No. 1132 dated 8-4-69 2 months 1, 61, 615.1021-8-684. D. No. 1931 dated 10-4-69 1 month 50, 512.7123-7-685. D. No. 68 dated 10-4-69 4 months 52, 106.181-6-683, 74, 879.492. Under Section 27(1) of the Act the application for refund had to be made before the expiry of six months from the date of payment of duty, the date of payment being the date of the bill in each case. Thus there was a delay varying between 1 month to 4 months in the filing of each of the applications for refund. The Assistant Collector of Customs dismissed the applications on the ground that they were filed out of time. The appeals to the Appellate Collector of Customs filed under Section 128(1) (b) of the Act failed. The appellant took the matter in revision to the Central Government under Section 131. The revisions were dismissed by the Central Government by their order dated November 25, 1972 stating therein :-"The Govt. of India have carefully considered the reasons advanced by the petitioners for their failure to prefer the claims for refund within the time stipulated under section 27 of the Customs Act, 1962, but see no justification to interfere with the appellate orders. The revision applications are, therefore, rejected.These appeals were filed from the said order after obtaining special leave of this Court.

Court's reasoning:
4. It is no doubt true that in view of the decision of this Court mentioned above the custom duty was chargeable on import of V. P. Latex under itemappellants case obviously and admittedly was not covered by sub-section (3) as it had not challenged the order of assessment in any appeal or revision. Nor was it a case where any duty was paid provisionally under Section 18. The appellants case was governed by sub-section (1) of section 27. No case of any running account was set up by the appellant nor was there anything in the records of this case to substantiate it. Custom duty was paid in respect of each of the five consignments on the date of its respective bill. Ultimately this position could not be disputed beforeletter relates to a consignment of 59 drums of V. P. Latex which could not be connected with any of the five consignments in question. Thus there is nothing to show that duty on them paid under protest, general orare unable to do so because the present appeals arising out of the orders made by the Government of India in proceedings under Section 27(1) of the Act have got to fail on the ground that the view taken by the authorities below on the question of limitation could not be shown to be incorrect.