TMI Blog1985 (4) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioners was exclusively produced from crude coal-tar. The certificates also stated that there was no production of petroleum Naphthalene in the Federal Republic of Germany. All the three certificates are to the same effect. 2. He petitioners were assessed to Customs duty in respect of the Naphthalene so imported under Customs Tariff Item 27.07 which item refers to oils and other products of the distillation of "high temperature coal-tar". For the purpose of countervailing duty, however, the petitioners were assessed under Tariff Item 11A of the First Schedule to the Central Excises and Salt Act, 1944. Item 11A of the First Schedule to the Central Excises and Salt Act (hereinafter referred to as Central Excise Tariff) is as follows : "Item No. 11A-PETROLEUM PRODUCTS NOT OTHERWISE SPECIFIED Item No. Description of Goods Rate of Duty Basic Duty Additional Duty (Rs. per kilolitre at 15 oC) 11-A. All products derived from refining of crude petroleum or shale (whether gaseous, liquid, semi-solid or solid in form), not otherwise specified, including refiners, gases, lubricating oi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificates produced by them at the material time, applied for refund of the countervailing duty collected from them on 23rd January, 1979. 5. In view of the decision of the Collector of Customs (Appeals) in the case of Atic Industries Limited and in view of the fact that the petitioners have produced evidence to show that Naphthalene imported by them under their invoice of 23rd December, 1977 is derived from coal-tar and not from petroleum, the petitioners are entitled to classify Naphthalene so imported under Central Excise Tariff Item 68 for the purpose of countervailing duty. In view of the said exemption notification no countervailing duty can be levied on Naphthalene imported by the petitioners under the said invoice. The refund application of the petitioners, however, was rejected by the Assistant Collector of Customs under his order dated 25-1-1979/6-2-1979 on the ground that the claim for refund was barred by limitation prescribed under Section 27(1) of the Customs Act, 1962. The petitioners filed an appeal from this order. The appeal however, was rejected by the 3rd respondent under his order dated 30-3-1979 also on the ground that the claim for refund was barred under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust retain it unimpaired until it has discharged its task.........if a tribunal in the course of its inquiry addressed itself to the wrong question or violated the rules of natural justice, it thereby stepped outside its jurisdiction." Jurisdictional errors can also be based on wrong findings of fact e.g. a tribunal dealing only with agricultural land cannot rule on non-agricultural land. Since the factual position regarding non-agricultural land is the same, at the outset, the tribunal was never entitled to entertain the case at all. Error as to the nature of land goes to the root of jurisdiction. Applying the same logic in the present case, if Naphthalene is not a petroleum product but is a product derived from coal-tar, this must be so at the outset. The Customs authorities were not entitled to levy any countervailing duty at all on this product. The levy of countervailing duty, therefore, is an act which is wholly without jurisdiction. 9. This concept of actions without jurisdiction was expounded and extended in the case of Amisminic Ltd. v. Foreign Compensation Commission [1969 (2) A.C. 147]. The decision has been subsequently approved by the House of Lords in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his able arguments, Mr. Shroff, learned Counsel for the petitioners cited several judgments before me. In the case of Maharashtra Vegetable Products Pvt. Ltd. v. Union of India and others, reported, in 1981 E.L.T. 468 (Bom.) a Division Bench of the Bombay High Court was required to consider refund of excise duty wrongly collected on post-manufacturing expenses. The Court held that such collection was exercising powers without jurisdiction. It would not, therefore, attract the bar of limitation prescribed under Rule 11 of the Central Excise Rules, 1944 for the purpose of refund. 11. Similarly, another Division Bench of this court in the case of Wipro Products Ltd, and another v. Union of India and another reported in. 1981 E.L.T. 531 (Bom.) held that if the levy of Central Excise, was totally without Jurisdiction and outside the provisions of Section 4 of the Central Excises and Salt Act the bar of limitation prescribed under Rule 11 of the Central Excise Rules was not applicable. That was also a case where the excise duty was levied by taking into account post-manufacturing expenses. (See also in this connection Associated Bearing Company Limited v. Union of India and another, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n concerned was filed. 14. In view of these authorities learned Counsel for the petitioner has submitted that the mistake in the present case relating to classification is a mistake which goes to the root of jurisdiction. I am inclined to accept this submission. 15. On behalf of the respondents it was pointed out by Mr. Shah, learned Counsel for the respondents that the error in classifying Naphthalene under Tariff Item 11A was merely an error of law which does not go to the root of jurisdiction of the Customs authority. In support of his contention he relied upon a decision of the Supreme Court in the case of Bata Shoe Co. Ltd. v. Jabalpur Corporation, reported in AIR 1977 S.C. 955. In that case the question related to the recovery of octroi under the C.P. Berar Municipalities Act, 1922. Under Section 83(1) of that Act an appeal is provided against the assessment of octroi. Under sub-section (1-A) of that section the person aggrieved by the decision of the Appellate authority has a right to apply to the State Government for revision on the ground (a) that the decision is contrary to law or is repugnant to any principle of assessment of a tax, or (b) that the appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of octroi duty under the Bombay Municipal Corporation Act on glass ampoules brought into Bombay by the petitioners was under consideration. Under Rule 26 of the Bombay Municipal Corporation (Levy of Octroi) Rules, 1965 there was a provision for refund of octroi paid wrongly or in excess. Under that rule, when octroi has been wrongly recovered or has been recovered in excess through inadvertence, error, misconstruction, misinterpretation or any other reason on the part of the Municipal Octroi staff, such excess may be refunded provided that such a claim for refund together with various documents mentioned therein is lodged within 3 months from the date of its recovery. In view of the specific provisions of this rule the learned Judge held that the application for refund should have been made within 3 months, even in the case of mis-interpretation of an entry. The learned Judge in terms distinguished the provisions of this rule from the provisions of Section 27 (1) of the Customs Act and held that the wording of Rule 26 was totally different from the wording of Section 27(1) of the Customs Act and distinguished that section by saying that there was no provision under Section 27(1) f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvailing duty on Naphthalene. In any case, in the absence of any factual basis for this submission, such a submission cannot be accepted. 18. The petitioners have prayed for interest at the rate of 18% per annum on the duty collected from the date of the petition till payment. In the case of Elpro International Ltd. and others v. Joint Secretary, Govt. of India, Ministry of Finance and others, reported in 1985 (19) E.L.T. 3 (S.C.) the Supreme Court has awarded interest on duty which was wrongly collected. The Supreme Court has awarded a lump-sum interest of Rs. 50,000/- in that case when the duty had been wrongly collected in the year 1966. In the case of Metal Distributors Ltd. and another v. Union of India and others, reported in 1984 (18) E.L.T. 269 (Bom.) this High Court also awarded interest at the rate of 12% per annum on the excise duty which was collected illegally. In the interest of justice and looking to the circumstances of the case it would be just and fair to award to the petitioners interest at the rate of 12% per annum from the date of the petition till payment. In the premises, the petition is allowed and the rule is made absolute with costs as prayed, save and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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