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TMI Blog1994 (2) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... er, stated that as per Section 154 of Customs Act, 1962, the clerical or arithmetical mistake in any decision or order passed by the Officer of Customs or errors arising therefrom from any accidental slip or omission may be corrected at any time by such officer or his successor. They, further, stated in their claim that indication of wrong rate of duty is only a clerical error due to accidental slip and can be rectified at any time. They made a prayer that accordingly this error may be rectified and cosequent refund may be granted. Application for refund of customs duty and charges. The Assistant Collector of Customs (Refunds) in the Bombay Customs House rejected the claim by his order dated 4-4-1990. He found that the duty had been paid on 21-3-89 whereas the claim for refund had been filed on 4-4-90 being beyond the statutory limit prescribed for such a refund under Section 27(1) of the Customs Act, 1962. He also relied upon the Supreme Court decision in the case of Madras Rubber Factory v. Union of India - 1983 (13) E.L.T. 1579 wherein it has been stated that a statutory refund claim, filed beyond the time limit under Section 27(1) of the Act, cannot be entertained by the Assist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... error under Section 154, the provision of Section 27 of the Customs Act are not attracted in such a case. 3.Shri Sidharath Kak, Jr. C.D.R. for the department, referred to the provisions of Section 27 as a whole. In this case the application for refund had been made under the Section to the Assistant Collector, who is empowered thereunder. Therefore, the claim to be processed and dealt with under the provisions of Section 27 only. Ld. Jt. CDR pointed out that separate provisions are made in the Section under sub-section 3 thereof for consequential relief as a result of order-in-appeal for refund under the Act. Ld. Jt. CDR further draw attention to sub-section 4 of Section 27 which says that save as provided in Section 26, no claim for refund of any duty shall be entertained except in accordance with the provisions of this section. Therefore, the ld. Jt. CDR, contended that all types of refund except those under provisions under Section 26, have to be dealt with only under Section 27 and the time limit thereunder will apply. Further, he referred to the provisions Section 154 which requires such mistakes to be corrected by such officer of Custom, who passed the decision or order or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as collected were not leviable to such duty or were entitled to exemption from duty and no court shall have any jurisdiction in respect of such claim. Section 154 - Correction of clerical errors, etc. - Clerical or arithmetical mistakes in any decision or order passed by the Central Government, the Board or any officer of Customs under this Act, or errors arising therein from any accidental slip or omission may, at any time be corrected by the Central Government, the Board or such officer of customs or the success in-office or such officer, as the case may be. 5.In the present case, the claim of the appellants for refund was made before the Assistant Collector beyond the period of six months set out in Section 27 (1) , but their claim is that it was a case of correction of clerical errors under Section 154 which does not set out any time limit for such correction of errors and the further argument is that the power to carry out such corrections by necessary implication also would give the authority the power to grant consequential refund without reference to the limitation under Section 27 (1) of the Customs Act. On this question, only the majority decision of the Hindustan Ferti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court decision in the case of Collector of Central Excise v. Doaba Cooperative Sugar Mills - 1988 (37) E.L.T. 478 (S.C.) are relevant which followed Miles India Ltd. case. Para 6 of the Doaba Cooperative Sugar Mills is reproduced below : "It appears that where the duty has been levied without the authority of law or without reference to any statutory authority or the specific provisions of the Act and the Rules framed thereunder have no application, the decision will be guided by the general law and the date of limitation would be the starting point, when the mistake or the error comes to light. But in making claims for refund before the departmental authority, an assessee is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed thereunder must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail. It may, however, be open to the department to initiate proceedings in the Civil Court for recovery of the amount due to the department in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Paras Laminates (P) Ltd. reported in 1990 (30) ECR 305 (SC), we propose to refer this issue to the Larger Bench to resolve the issue. Accordingly, we are placing this matter before the President to constitute Larger Bench in accordance with the law to resolve the issue." 8.In this context first and foremost a question arises whether a Bench could refer a matter to the President for constituting Larger Bench merely because it was so inclined and if so, whether the Hon'ble President was bound to constitute a Larger Bench, or the Bench so constituted could return the reference. 9.In my opinion, the case of U.O.I. v. Paras Laminates [1990 (49) E.L.T. 322 (SC) = 1990 (30) ECR 305 (SC)] cited by the original Bench allows a reference to be made only in such cases where a Bench comes to a conclusion for goods and sufficient reasons to be recorded in writing that the view taken earlier was not a correct view. 10.In the instant case, the original Bench has not indicated in so many words as to in what respect the earlier Bench which decided the issue went wrong and what was the reason for concurring with the minority view, apart from their inclination to follow it. However, even if it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Paras Laminates do not obtain, and a number of areas mentioned in the majority opinion have not been touched. I consider that the reference was not in order and the matter was required to be returned to the original Bench with the observation that the precedent already set by majority of five Members in the case of Hindustan Fertilizers Corporation. may be followed. 15.However, since the matter has already been heard by the Larger Bench constituted by the Hon'ble President in exercise of his discretionary authority, I may further elaborate that referring Bench has not taken into account the situations which were not covered by Section 27 but in respect of which Section 154 could still be invoked. 16.The annexure to the order in the case of Hindustan Fertilizers Corporation illustrates and lists a number of such situations not covered by Section 27 in which errors may arise and may require rectification. This itself shows that scope of Section 27 is limited. 16.1.Further, the areas covered by Section 27 have been clearly dealt with by the majority opinion and there was no reason to presume that clauses 4 and 5 escaped its notice. 16.2.For one, the majority opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or deposited in anticipation of the arrival of the ship under prior entry system. 24.The main point to be noted is that clauses 4 and 5 do not extend the scope of Section 27 to cover the types of situation mentioned in the majority opinion as falling beyond the scope of Section 27 but covered by Section 154. 25.As mentioned earlier, the Bench order in the case of MMTC also distinguishes between cases which involve substantive review (and others which do not) but has fallen into error in applying its own theory for the simple reason that correction of arithmetical or clerical error does not involve and is not expected to involve substantive review. 26.Again under Section 27, Assistant Collector was competent to undertake substantive review only in case of orders passed by a subordinate and not in a case of consequential relief ordered by higher authorities. Therefore, while it is correct to say that Section 154 does not cover substantive review, it does not follow, ipso facto, that it does not cover consequential relief. The ratio of the Hon'ble Supreme Court in the case of Miles India and Oudgh Sugar Mills quoted by the referring Bench has no application to the matter before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid errors anytime it follows therefrom that the amount could be returned at any time and indeed it could only be expected that it would be so returned as soon as the error(s) or mistake(s) was detected or soon thereafter. Indeed Article 265 of the Constitution provides that no tax shall be levied or collected save by the authority of law. Therefore, the amount, if any, found in excess of what was legally authorized due could not be retained, otherwise it may tantamount to usurpation - not permitted in a constitutional State such as ours and would be against the letter and spirit of the Constitution. 33. Indeed there is no reason to presume that Section 154 was merely intended as an academic exercise for sake of record and/or did not cover the consequential relief and/or limited such relief to a specific time period. This is evident from the fact that the words used with reference to time in Section 154 are "any time" and they would be rendered fruitless if a time bar was additionally read into this Section. In my opinion since Section 154 itself takes care of time factor there was no cause or licence to lift the same from elsewhere and inject it into this Section artificial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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