R.R. International vs Union of India (UOI)

V.C. Daga, J.—Heard learned Counsel for the Petitioners and learned Counsel for the Respondent. Perused petition.

The Petitioners have filed this petition to challenge the order of assessment relating to the bills of entry filed by the Petitioners, details of which are incorporated in para-3(a) of the petition, contending that the bill of entry ought to have been assessed in terms of Notification No. 431-Cus., dated 1st November, 1976 as interpreted by the Customs Excise and Gold (Control) Appellate Tribunal, Madras ("Tribunal" for short) in its order dated 30th September, 1985; wherein it was held that the rate of duty was Rs. 20 per kg. less 71/2% i.e. 71/2% ad valorem.

The factual matrix giving rise to the present petition is that the Petitioners had imported Cloves falling under Heading 9.04/10 of the First Schedule to the Customs Tariff Act, 1975. The bill of entry was filed. It was assessed at the rate of Rs. 20/- per kg. less 71/2% i.e. 71/2% of Rs. 20/-. The Petitioners had contended that the words less 71/2% means less 71/2% ad valorem i.e. of the assessable value. This contention of the Petitioners was rejected by the Customs Officer.

The Petitioners, subsequent to the above judgment, having acquired knowledge of the judgment of the Tribunal, dated 30th September, 1985 in CD Appeal No. 463/1985 (D) 1986 (6) ECR 623 , preferred this petition in the year 1987 contending that pursuant to the judgment of the Tribunal at Madras, the Petitioners were entitled to refund of duty quantified and paid in the sum of Rs. 1,15,565.53.

The Petitioners, during the pendency of the petition, amended this petition and challenged the assessment of the bills of entry contending that the assessment is liable to be quashed and set aside and the Petitioner''s bill of entry is liable to be assessed in consonance with the view taken by the Tribunal at Madras in the case of Cortland Exports (supra) while interpreting the Notification No. 431-Cus. dated 30th September, 1985 and that the consequent relief of refund should be granted to the Petitioners. Learned Counsel appearing for the Petitioners submits that the judgment of the Tribunal at Madras in the case of Cortland Exports (supra) has been accepted by the Revenue and that the said judgment is still holding the field.

Per contra, Mr. Pardeshi, learned Counsel appearing for the Respondents urged that the petition is misconceived and devoid of merits. He submits that against the impugned order of assessment, appeal ought to have been preferred by the Petitioners since the alternate remedy was available. He, thus, submits that the Petitioners should be relegated to the alternate remedy.

Mr. Pardeshi further submits that initially the Petitioners did not challenge the order of assessment of the bill of entry. However, after inordinate delay, the petition was amended and the assessment of the bill of entry has been challenged. That such a belated challenge should not be entertained by this Court.

Mr. Pardeshi further submits that so far as the claim for refund is concerned, it is open for the Petitioners to file suit for recovery of the tax paid under the mistake of law. He placed reliance on the judgment of the Apex Court in the case of Mafatlal Industries Ltd. and Others Vs. Union of India (UOI) and Others, .

Mr. Pardeshi, alternatively, submits that so far as the refund is concerned, the same cannot be granted in writ jurisdiction of this Court since the question of unjust enrichment will require detailed investigation which cannot be done in the writ jurisdiction of this Court. He, thus, submits that the petition is liable to be dismissed with costs.

In rejoinder, learned Counsel for the Petitioners submits that, in the identical set of facts, Writ Petition No. 1917/1986 was allowed by this Court; wherein this Court was pleased to grant refund to the Petitioners therein. Copy of the order is placed on record. He, thus, submits that in order to maintain consistency in exercise of judicial powers, this petition is also liable to be considered and decided on its own merits in the tune which the order passed in Writ Petition No. 1917/1986 decided on 4th February, 1987.

Consideration:

Having heard rival parties, it is, no doubt, true that the petition when filed in the year 1987, it did not contain prayer challenging the order of assessment of the bill of entry and the Petitioners had directly prayed for refund of duty. The reason being that this Court had not only entertained petition involving identical facts and issues but allowed the same, being W.P. No. 1917/1986. The Petitioners, thus, thought it fit to file similar petition applying for refund of duty. It appears, subsequent to the law laid down by the Apex Court in the case of Mafatlal Industries Ltd. (supra), the Petitioners were advised to amend their petition and challenge the order of assessment of the bill of entry. Amendment to that extent was allowed to challenge the bill of entry. Once the petition is allowed to be amended, then the amended part of the petition relates back to the date of presentation of the petition is the settled legal position.

Having said so, the judgment and order of the Tribunal at Madras in the case of Messrs. Cortland Exports (supra) has been accepted by the Revenue. The interpretation given to the Notification No. 431-Cus dated 1st November, 1976 by the Tribunal is still holding the field. Admittedly, the assessment of the bill of entry in the instant case is contrary to the order of the Tribunal at Madras. The said order of the Tribunal has also been relied upon by this Court while allowing Writ Petition No. 1917/1986 vide its judgment dated 4th February, 1987 and by way of consequential relief, refund was allowed. The judgment of this Court has also been accepted by the Revenue.

In our considered view, it will not be in the interest of justice to relegate the Petitioners to an alternate remedy after lapse of 23 years, especially, when this petition does not involve any disputed questions of fact requiring investigation thereof see L. Hirday Narain Vs. Income Tax Officer, Bareilly,

In the above view of the matter, the assessment of the bill of entry done by the customs authorities holding that the rate of duty was Rs. 20/- per kg. less 71/2% i.e. 71/2% of Rs. 20/- is liable to be declared as bad and illegal and stands substituted with that of rate of duty @ Rs. 20/- per kg. less 714% ad valorem. Accordingly, the order of assessment is set aside and stands substituted in consonance with the view taken by the Tribunal at Madras in the case of Cortland Exports (supra). With the result, Petitioners would be entitled to refund as claimed amounting to Rs. 1,15,565.63, the quantum of which is not in dispute.

It is needless to mention that in view of subsequent amendment to the Customs Act, the doctrine of unjust enrichment would get attracted. The undisputed amount of refund having been determined by this Court, now it would be open for the Respondents to investigate as to whether the Petitioners would be entitled to get refund or the amount of refund determined is liable to be credited to the Consumer Welfare Fund.

Petition is allowed. Rule is made absolute in terms of this order with no order as to costs.