Madras Rubber Factory Ltd. Vs. The
Union of India & Ors  INSC 297 (3 December 1975)
MATHEW, KUTTYIL KURIEN GOSWAMI, P.K.
CITATION: 1976 AIR 638 1976 SCR (2) 864 1976
SCC (2) 255
Customs Act-Section 27(1)-Limitation for
refund of claims.
"V. P. Latex" imported by the
appellants was treated as falling under item 87 of the Indian Tariff Act 1934,
the custom Authorities and custom duty was charged, in addition to a
countervailing duty under item 15A of the Central Excise Tariff, in accordance
with the Central Salt & Excise Act 1944. The appellants contending that
V.P. Latex is an item of raw-rubber covered only by item 39 of the Indian
Tariff Act 1934 preferred refund-claim under section 27(1) of the Customs Act
before the Assistant Collector, which was dismissed on the ground of
limitation. The appeal under section 128(1)(b) and the Revision failed.
Dismissing the appeals, by special leave the
HELD: In the instant case, there was nothing
to show that duty was paid under protest, general or specific and therefore the
claim was not within the period of limitation.
The view taken by the authorities on the
question of limitation was correct. [867-DE] Dunlop India Ltd., etc. v. Union
of India,  (2) S.C.R., P. 98 referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
Nos. 1565- 1569/73.
Appeals by Special Leave from the orders Nos.
4844-4848 of 1972 dated 25th November 1972 of the Central Govt., Ministry of
Finance, Govt. of India.
D. V. Patel and K. R. Nambiyar for the
G. L. Sanghi and Girish Chander for the
The Judgment of the Court was delivered by
UNTWALIA, J. The appellant company in these appeals by special leave is a
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 Indin 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 Excise 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 865 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 Delay Amount claim for refund ____________________________________________________________
1. D. NO. 1644 dated 8-4-69 31/4 Months
2. D. No. 1024 dated 27-6-69 3 Months
3. D. No. 1132 dated 8-4-69 2 Months
4. D. No. 1931 dated 10-4-69 1 Months
5. D. No. 68 dated 10-4-69 4 Months 52,106.18
1-6-1968 ____________ 3,74,879.49
____________________________________________________________ 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 29, 1972
"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.
Mr. D. V. Patel learned counsel for the
appellant submitted that in view of the recent decision of this Court in Dunlop
India Ltd. etc. v. Union of India & Ors. V. P. Latex was chargeable to duty
under item 39 only. The applications filed by the appellant for refund of the
excess amount have erroneously been dismissed on the ground of having been
filed out of time. Counsel submitted that the appellant used to pay custom duty
not as and when a particular consignment was received but by making deposits in
a running account. Hence no particular date of payment could be assigned in
respect of a particular consignment. He further submitted that the duty was
paid under protest and hence under the proviso to sub- section (1) of section
27, the limitation of six months did not apply. Mr. G. L. Sanghi, learned
counsel for the respondents contended that no case of running account had been
made before the authorities below and that there was nothing to show that the
duty had been paid under protest in relation to any of the five consignments.
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 item 39. The authorities below do not seem to have decided
the refund applications of the appellant on merits. They have dismissed them
merely on the ground of limitation. The only question, therefore, which falls
for determination by us is whether the applications for refund were filed out
Section 27 reads as follows:
"27. (1) Any person claiming refund of
any duty, paid by him in pursuance of an order of assessment made by an officer
of customs lower in rank than an Assistant Collector of Customs may make an
application for refund of such duty to the Assistant Collector of Customs
before the expiry of six months from the date of payment of duty:
Provided that the limitation of six months
shall not apply where any duty has been paid under protest.
Explanation-Where any duty is paid
provisionally under section 18, the period of six months shall be computed from
the date of adjustment of duty after the final assessment thereof.
(2) If on receipt of any such application the
Assistant Collector, of Customs is satisfied that the whole or any part of the
duty paid by the applicant should be refunded to him, he may make an order
(3) Where, as a result of any order passed in
appeal or revision under this Act, refund of any duty becomes due to any
person, the proper officer may refund the amount to such person without his
having to make any claim in that behalf.
(4) Save as provided in section 26, no claim
for refund of any duty shall be entertained except in accordance with the provisions
The appellant's 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 appellant's 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 867 position could not be
disputed before us. The appellant, however, contended that the duty was paid
always under general protest which covered the cases of these five consignments
also. Hence under the proviso to sub-section (1) the limitation of six months
does not apply.
Our attention was drawn to several letters in
the records of the appeals before us to substantiate the plea of payment under
protest, but none of them helps the appellant.
We may refer to only two of them. The
appellant wrote a letter on February 8, 1968 to the Assistant Collector of
Customs, Madras making out a case therein that V. P. Latex was assessable to
duty under item 39-ICT. Finally in this letter a protest was made for the
assessment of duty under item 87 on V. P. Latex imported by the company in the
This letter was written before the five
consignments in question were imported and duty paid thereon. The protest,
therefore, embodied in the letter aforesaid was not in respect of any of these
consignments. A letter written on July 15, 1968 was a letter written at a point
of time when two out of the five consignments had been imported; but three were
imported after the writing of this letter by the appellant to the Asstt.
Collector of Customs, Madras. This letter 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 was paid under
protest, general or specific.
It was lastly contended on behalf of the
appellant that in view of the recent decision of this Court, the Govt. should
be directed to refund the excess amount of Rs. 3,74,879.49 charged on the five
consignments. We are 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 the incorrect.
In the result the appeals fail and are
dismissed. There will be no order as to costs.
S.R. Appeals dismissed.