JUDGMENT

FATHIMA BEEVI, J.:- The appellant is a federation of glass manufacturers in India. The Federation entered into a contract with M/s. Magadi Soda Company Ltd., Kenya, for supply of 5000 metric tonnes of soda ash dense at the rate of US $155 per metric tonne c.i.f. Bombay. The consignment arrived from Mombasa, Kenya on 28-12-1981. The goods were cleared on payment of customs duty of Rs. 32,15,904.21 from Bombay. The appellant on distribution of the goods to various members of the federation, received complaints that the soda ash which had been supplied was of sub-standard quality. The seller M/s. Crescent Dyes & Chemicals as well as their agents were approached. They sent a team of experts to examine the goods. The inspection confirmed that the goods were defective. As per agreement dated 9-2-1982, M/ s. Crescent Dyes & Chemical sent a credit note of US $2,40,000/- as compensation on account of the defective goods sent by M/s. Magadi Soda Company Ltd. The amount remitted on account of the import made was only US $5,35,000/-as against the earlier contracted amount of US $7,75,000/-.

2. In view of such reduction, the appellant filed a refund application before the Customs Departm