TMI Blog2006 (8) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... , 063.96. An order attaching properties of the appellant was also passed. 2. The facts of the case briefly stated are as follows: The plaintiff at the material point of time was engaged in the business of exporting Mica. During the period between 14th October 1966 and 17th February, 1967 the plaintiff exported diverse quantity of Mica from the, Port of Calcutta to foreign countries, Naturally Customs duty was assessed. In assessing the export duty, the Customs Authority is alleged to have realised an excess sum of Rs. 1,05,745.25 by wrongfully and illegally taking into consideration the cess, payable at the rate of two and half per cent of the value of the Mica exported, as part of the value thereof. In other words cess payable at the rate of two and half percent ad valorem was included in the price of the goods for the purpose of section 14 of the Customs Act and by inclusion of the aforesaid cess in the price of the goods Customs duty was realised on a larger amount. If the price of goods was Rs.100 it became Rs. 102.50 inclusive of cess. Customs duty was assessed on the sum of Rs. 102.50 which according to the plaintiff the Customs Authority had no jurisdiction to do. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mits of illegally collected, the suit lies. In the instant case, the collection of export duty on 'cess' is patently illegal and beyond the powers conferred on the authorities under the Customs Act, as such the suit lies. 7. As regards the second issue the learned Trial Court held that real value of the goods was their invoice price. It was added that This position, indeed, was accepted by the customs authorities when they ordered refund of excess duty charged by them in relation to items 22 to 29 and 33-35. Such refund could only have been ordered on the footing that the excess duty on these consignments had been charged without the authority of law and, therefore, without jurisdiction . 8. As regards the third issue the learned Trial Court granted a decree for Rs. 1,05,745.25 together with interim interest and interest on Judgment at the rate of 12% per annum. There was however no claim for any interest in the plaint. 9. Mr. Roy Chowdhury, learned senior Advocate appearing in support of the appeal against the decree submitted that a suit shall not lie for refund or recovery of any duty paid in excess except where the realisation was made pursuant to a statute wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties, imposed thereunder. Section 11B of the Central Excises and Salt Act and section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under proposition (i) below have to and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact, or law and that not only an appeal is provided to a Tribunal - which is not a departmental organ- but to this Court, which is a Civil Court. (ii) Where, however, a refund is claimed on the ground that the provision of the Act under which it was levied is or has been held to be unconstituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke a prayer for refund in accordance with the procedure laid down in the Act. A suit in that regard is specifically barred as would appear from the case of Mafatlal which he has already cited. He submitted that the learned Trial Court fell into an error in proceeding the basis that the realisation of a sum of Rs. 1,05,745.25 was without jurisdiction and, therefore, a suit was maintainable for recovery thereof. 13. He drew our attention to the decree in order to show that the learned Trial Court has granted 12 per cent interest for the period during which the suit was pending and 12 per cent interest after the decree whereas in the plaint there is no claim for any interest. He submitted that prior to 1995, the Customs Authority did not charge any interest for any delayed payment on duty because there was no provision for any interest being realised. Similarly, there was no provision in the Customs Act for grant of interest together with refund, if any. For the first time provisions were included in the Customs Act both for the purpose of realisation and for payment of interest in the year 1995. He drew our attention to section 27A, which was introduced with effect from 26th May, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Excise Act and the Rules framed thereunder by strictly adhering to the stipulated procedure. However, in cases where the authorities under the Excise Act arrogate to themselves jurisdiction even in cases where there is clear want of jurisdiction, the situation poses some difficulty. Reddy, J. has held that in all cases, except where unconstitutionality is alleged, the remedy is to be pursued within the framework of the Excise Act. This is a dangerous proposition for it will not cater to situations where the authorities under the Excise Act assume authority in cases where there is an inherent lack of jurisdiction. This is because if one were to follow Reddy, J's reasoning, the authorities under the Act will have the final say over situations in which they totally lack inherent jurisdiction. In such a situation, there nothing to prevent the authorities exercising jurisdiction in cases which are ultra vires the Excise Act but intra vires Constitution. To that extent, I would hold that in cases where the authorities under the Excise Act initiate action though lacking in inherent jurisdiction, the remedy by way of a suit under section 72 of the Contract Act or, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of payment were allowed. It is, therefore, an admission of the fact that the claim made by the plaintiff was just and lawful. Only defence of the defendant is that such claim was not made within the period of limitation. He submitted that if the claim is just and lawful, there is no reason why the same should not be allowed and, therefore, the Trial Court was perfectly justified in passing the decree and this Court shall refrain from interfering with the same. 21. We have considered the rival submissions made by the learned counsel appearing for the parties. We cannot but hold that law is now well settled that a claim for refund has to be made by resorting to the procedure laid down in the Act and not by a suit. This position in law has been made amply clear in a number of Judgments including in the case of Mafatlal Industries Limited, which has already been quoted. 22. It is not possible to hold that the excess recovery made the Customs Authority by proceeding on an erroneous basis as regards the value of the goods was an act without jurisdiction. They did have the jurisdiction to make the assessment. Once that is accepted, the power to make the assessment wrongly h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff, alleges and establishes that he has not passed on the burden of the duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or the extent he has not so passed on, as the case may. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the Judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State i.e. by the people. There is no immorality or impropriety involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund of any duty shall be entertained except in accordance with the said provision, it is not permissible to resort to section 72 of Contract Act to do precisely that which is expressly prohibited by the said provisions. In other words, it is not permissible to claim refund by invoking section 72 as a separate and independent remedy when such a course is expressly barred by the provisions in the Act, vis., Rule 11 and section 11-B. For this reason, a suit for refund would also not lie. Taking any other view would amount to nullifying the provisions of Rule 11/section 11-B, which, it needs no emphasis, cannot be done. It, therefore, follows that any and every claim for refund of excise duty can be made only under and in accordance with Rule 11 or section 11-B, as the case may be, in the forums provided by the Act. No suit can be filed refund of duty invoking section 72 of the Contract Act. 28. The appeal is as such allowed and the decree is set aside. 29. Since the decree has been set aside the order passed in execution thereof automatically ceases to be operative. Both the appeals are thus allowed. There shall be no order as to costs. Prayer for stay made by Mr. Dutta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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