I.J. Rao, Member (T)

1. The appellants - a Public Sector Undertaking - imported and cleared an ore sorter under a Bill of Entry No. DI-564 dated 16.7.1983. On certain representations being made by the importers/appellants, the Government of India issued an Exemption Order No. 191 dated 12.10.1983 under Section 25(2) of the Customs Act granting exemption from customs duty, auxiliary duty and additional duty. This order was to be valid upto, and inclusive of, 31.3.1984.

2. The appellants, who paid the duty earlier, made an application for refund on the basis of the Exemption Order. The Assistant Collector of Customs rejected the same on the ground that the Exemption Order No. 191 was issued subsequent to the importation of the goods and payment of duty thereon. While doing so, the Assistant Collector observed that the exemption under the authority of Sub-section (2) of Section 25 of the Customs Act, 1962, is, in fact, a post-facto exemption applicable only to subsequent importation of goods. (The Assistant collector meant 'prospective' but appears to have wrongly used the word 'post-facto'). He further observed that (the exemption) has no retrospective effect and does not apply to goods imported earlier.

3. Aggrieved, the appellants filed an appeal before the Collector of Customs (Appeals). The appellants pleaded before the Collector that the correspondence for the ad hoc exemption was initiated much earlier and relied upon a decision of the Madras High Court in the case of 'Indian Loaf Tobacco Development Limited (ITC Ltd.) v. Union of India and Ors. (Writ Petitions Nos. 3025 and 3026 of 1978) where, according to the appellants, it was clearly held that exemption could be granted, under circumstances of an exceptional nature, even before a levy is made or after the levy but before the recovery of the amount and even in a case where customs duty has been collected, it would be certainly open to the Central Government to exercise their power under Section 25(2) of the Customs Act to grant exemption and refund of levy. The appellants also cited before the Collector an order of the Tribunal (Order No. 239/84-C, dated 24.4.1984). The Collector of Customs (Appeals) rejected the appeal holding that the exemption granted after payment of duty could not be accepted in the absence of any specific endorsement to the extent that the certificate issued would be valid for the goods "already imported. Hence, the present appeal.

4. Shri M.A. Rangaswamy, the learned Counsel for the appellants, appearing with Miss Radha Rangaswamy, reiterated his arguments and took the Bench through the facts of the matter. He cited the following case law in support of his argument that even though the Exemption Order was issued after the importation of the goods and of payment of customs duty thereon, it is a valid order and refund should be granted:-

(1) C.C. Rajkot v. Cotton Corporation of India MANU/CE/0272/1985 : 1986 (25) ELT 327;

(2) Food Corporation of India v. C.C. Bombay MANU/CE/0237/1984 : 1985 (21) ELT 128;

(3) Dr. Hari Vishnu Pophale v. Union of India 'ILR (1981) 1 Delhi 514'; and

(4) Indian Leaf Tobacco Development Company Ltd. (ITC Ltd.) v. Union of India, reported in 'MANU/TN/0037/1983 : 1984 (16) ELT 234 Madras'.

5. Shri Rangaswamy also submitted that the appellants were heard in person by one Collector of Customs (Appeals) whereas the order impugned was passed by his successor in office who did not extend a personal hearing to the appellants. He submitted that there was, thus, violation of the principles of natural justice.

6. Shri J. Gopinath, the learned SDR, submitted that, as the learned Counsel for the appellants has pleaded, that there was violation of the principles of natural justice, before the Collector of Customs (Appeals), the matter may be remanded to him for de novo consideration. On the merits of the matter, Shri Gopinath referred us to his arguments in the matter of 'Food Corporation of India v. Collector of Customs, Bombay' reported