Gripwell Industries Limited vs Union Of India

M.B. Shah, C.J.—The petitioner have challenged the order dated 5th July, 1989 (Exhibit ''F'' to the petition) passed by the Assistant Collector of Customs, Refund Department, rejecting the petitioners'' application for refund of the Customs duty paid on the ground that the application was time-barred.

It is the say of the petitioners that without giving any opportunity of hearing and without applying the mind, the petitioners'' application for refund was rejected as beyond the period of six months. It is pointed out that the goods were imported in March 1984. As the goods were detained, the petitioners paid the amount of duty and interest under protest without prejudice to its rights and contentions that the duty and interest were not at all payable. For that purpose, the petitioners have produced on record letters dated 21st March, 1985 (Exhibits ''H'' and ''I'' to the petition). The petitioners have also produced on record the detention notice dated 17th April, 1984 (Exhibit ''G'') whereby the petitioners were directed to pay duty as well as Interest @ 18% per annum.

Subsequently, it is pointed out that the aforesaid detention order was withdrawn by a letter dated 26th March, 1989. Necessary correspondence in this regard is produced on record.

Despite the aforesaid facts stated in the petition, no affidavit in reply is filed. Therefore, from the record as it is, it is apparent that the petitioners paid the Customs duty and interest under protest because of the detention order. If that be the position, the second proviso to Section 27 of the Customs Act would apply and the limitation of six months will not apply as the duty and Interest has been paid under protest. It is, therefore, contended that the impugned order No. 5/6-GR4-182/89R, dated 5th July, 1989 passed by the Assistant Collector of Customs, Refund Department should be quashed and set aside.

However, it has been pointed out by the learned Counsel for the respondents that in view of the amended Section 27, the Competent Authority is required to determine whether the amount is required to be refunded to the petitioner or whether it is required to be credited to the fund established under the Customs Act can be determined by the appropriate authority under the Customs Act by verifying whether the petitioners satisfy clauses (a) to (f) of proviso to sub-section (2).

Considering the aforesaid submission and the proviso of Section 27, in this case, the Assistant Commissioner of Customs is required to decide on merits whether the petitioners are entitled to get refund of the duty and interest paid by them under protest.

In the result, the petition is partly allowed. The impugned order is quashed and set aside. The Assistant Commissioner of Customs is directed to decide whether the duty and interest paid by the petitioners under protest should be refunded to the petitioners or whether it should be credited to the fund as envisaged u/s 27(2) of the Customs Act. The Assistant Commissioner of Customs would decide the said question within a period of two months from today if the petitioners furnish the necessary information within a period of 15 days from today.

Rule made absolute to the aforesaid extent with no order as to costs.