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1977 Supreme(Ker) 308
High Court of Kerala
V.P. Gopalan Nambiyar, K.K. Narendran, JJ.
Bakul Cashew Company - Appellant
Versus
Asst Collector Of Customs & Ors - Respondent
W.A. No. 209 of 1977
Decided On : 29-11-1977
Strict compliance with the conditions for exemption is necessary to claim refund under the Finance Act and Customs Act.
Headnote:
Finance Act - Import of Cashew Nuts - S.4 of Finance Act 14 of 1971 - S.25 of Customs Act, 1962 - Notification dated 20th April 1972 - The court discussed the imposition of regulatory duty of excise on the import of cashew nuts under S.4 of the Finance Act 14 of 1971 and the conditions for exemption under the relevant notification. The court emphasized the requirement for the importer to comply strictly with the conditions and terms imposed by the notification in order to earn exemption.
Fact of the Case:
The petitioner imported raw nuts and paid duty in full. He applied for a refund of duty on the ground of exemption under a notification, but his claim was rejected on the basis of time limitation and failure to comply with the conditions for exemption.
Finding of the Court:
The court found that the duty was paid in pursuance of an order of assessment, and the application for refund was made beyond the time limit. The petitioner failed to comply with the conditions for exemption, thus rendering the claim for refund unsustainable.
Issues: Time limitation for refund application, compliance with conditions for exemption
Ratio Decidendi: Duty must be paid in pursuance of an order of assessment for refund application; strict compliance with the conditions for exemption is necessary to claim refund.
Final Decision: The appeal was dismissed with no order as to costs.
V.P. Gopalan Nambiyar, C. J.
1. We think the learned Judge was right in the view that he took. Under section 4 of the Finance Act 14 of 1971 certain regulatory duty of excise was imposed on the import of cashew nuts. Under the terms of a notification exemption from the duty thus imposed could be earned under certain terms and conditions. The relevant notification dated 20th April 1972 reads as follows:
"In exercise of the powers conferred by sub-s.(1) of S.25 of the Customs Act, 1962 (52 of 1962) read with sub-s.(4) of S.4 of the Finance Act, 1971 (14 of 1971), the Central Government, being satisfied that it is necessary in the Public Interest so to do hereby exempts raw cashew nuts from the whole of the regulatory duty of customs leviable thereon under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 38 Customs, dated the 17th March 1972, subject to the following conditions, namely:--
(i) that the importer makes a declaration at the time of import that the goods are being imported for processing and reexport;
(ii) that the goods are reexported in the form of cashew kernels with six months of the date of importation or within such extended period not exceeding one year, as the Collector of Customs may allow; and
(iii) that the weight of cashew kernels exported is not less than 25 per cent of the weight of cashew nuts imported, or where it is proved to the satisfaction of the Collector of Customs concerned that the kernels were obtained only from imported raw cashew nuts, such lower percentage of the weight of the cashewnuts imported as the Collector of Customs may in each case determine:
Provided that the importer executes a bond with such surety or sufficient security as the collector of customs approves, undertaking.
(a) to reexport the goods after processing within six months of the date of importation or within such extended period not exceeding one year, as the Collector of Customs may allow;
(b) to produce the cashew kernels before the Collector of Customs prior to reexport; and
(c) to pay the duty if the reexport does not take place within stipulated period".
The petitioner appellant imported raw nuts in two lots under a licence dated 8th December 1971. Duty in full was paid by two payments made on 2nd May 1972 and 5th May 1972. He applied for refund of duty on 13th December 1972 on the ground that no duty was in fact payable, that he was eligible to exemption under the terms of the notification, and the duty had been paid mistakenly as he was unaware of the exemption. His claim was rejected by Ext. P1 order which was confirmed on appeal (vide Ext. P2) and again on further revision (vide Ext. P3). The writ petition to quash these orders was dismissed by the learned Judge on the ground that the application for refund was barred by time.
2. S.27(1) of the Customs Act in so far as it is relevant provides:
"27. Claim for refund of duty.-- (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 S.18, the period of six months shall be computed from the date of adjustment of duty after the final assessment thereof.
* * * * "
The section provides for refund of duty paid in pursuance of an order of assessment; the application for refund shall be made before the expiry of six months from the date of payment of duty. The argument was that there was no order of assessment, and therefore the duty was not paid in pursuance of any order of assessment. The appellant had paid the duty in full by two payments made on the two dates mentioned earlier. Under
