Importers are entitled to a refund of customs duty paid for goods not received, irrespective of inter-departmental disputes, as established under Sections 13, 23, and 27A of the Customs Act.

JUDGMENT :

(Per M. S. Sonak, J.)

1. Heard the learned counsel appearing for the respective parties.

2. Rule. Rule made returnable forthwith, with the consent and at the request of the parties. In any event, by order dated 14 October 2025, the matter had been directed to be listed for final disposal at the admission stage on 11 November 2025.

THE CHALLENGE

3. The Petitioner has impugned the communication dated 28 December 2022 bearing reference No. F.No. CUS/RFD/OTH/141/2022/REF-O/o COMMR-CUS-IMP-II- ZONE-I and DIN 2022127800000000A259, issued by Respondent No.1, whereby the Petitioner’s claim for refund of customs duty amounting to Rs. 35,37,358/- was rejected/disposed of. The Petitioner, therefore, seeks issuance of a writ of mandamus directing Respondent No.1 to refund the aforesaid amount along with applicable interest, in accordance with the provisions of Sections 13, 23 and 27A of the Customs Act, 1962. The challenge arises in the background of the relevant facts and circumstances set out hereinbelow.

4. This is an unfortunate case where the Petitioner, despite having duly complied with all statutory obligations and paid the necessary customs duty, is forced to approach this Court due to a prolonged and unresolved dispute between Respondent No.1 and Respondent No.2. The Petitioner, who has neither received the imported goods nor obtained a refund of the duty paid, has had to run from pillar to post for nearly three years, caught between two public authorities, each seeking to shift responsibility onto the other.

5. The two public authorities utilise taxpayers’ money or public funds, and therefore have no hesitation in raising various issues to delay the refund of customs duty to the Petitioner, even after practically admitting that the Petitioner is not responsible for their situation. The main dispute revolves around the authorities' disagreement over the liability to pay the amount already deposited by the Petitioner for customs duty on imported goods, which neither of the two authorities is willing to release to the Petitioner.

6. The Customs maintain that this is a case of pilferage of the goods after they were landed and in the custody of the Port Authorities. The Port Authorities argue that this is a short landing, for which they have issued a certificate, and that the Customs should refund the customs duty collected from the Petitioner. In this dispute between the two public authorities, the Petitioner is the only sufferer.

7. The present Petition, therefore, exemplifies a situation in which an innocent importer has suffered and continues to suffer due to administrative inaction and inter-departmental discord. This necessitates the intervention of this Court in exercise of its writ jurisdiction to ensure that such an approach by two public authorities, who are supposed to facilitate ease of doing business and act fairly and justly, does not deprive the Petitioner of its dues. Instead, these authorities have erected barriers of procedural technicalities and largely frivolous defences, again utilising public monies, which include the Petitioner’s funds unlawfully retained by them for the past three years.

RELEVANT FACTS & CIRCUMSTANCES

8. The Petitioner Company manufactures and trades in PVC/CPVC pipes and various water management products. The Petitioner imports Polyvinyl Chloride Resin Suspension Grade 5, a raw material required for the manufacturing of the PVC pipes. Since the raw material is consumed in the manufacturing process, it attracts customs duty under the Customs laws.

9. The Petitioner’s case is that it had placed an order for importing 100 metric tons of Polyvinyl Chloride Resin Suspension Grade 5 Erdos for a sum of USD 148,000 and had subsequently, filed a Bill of Entry No.8441729 dated 27 April 2022 with the Respondent No.1. It is undisputed that upon filing of the aforesaid Bill of Entry, the Petitioner paid a total sum of Rs. 35,37,358/- as custom duty to the Respondent No.1, on the goods to be imported. The