Full Judgment
2. This appeal challenges the Order-in-appeal dated 16-12-93 passed by the Collector of Customs (Appeals), Bombay rejecting the appellant's appeal against Order-in-original dated 28-6-93 passed by the Assistant Collector of Customs (Refunds) rejecting the refund claim dated 30-1-89 of the appellants. It is seen from the said Order-in-original that the learned Assistant Collector has not gone into the merits of the claim but has rejected the same as time-barred.
3. It is the case of the appellant that they had imported Baynicron -Slurry UP FE 2117 black under B/E No.9056 dated 24-7-86. The appraising officials of Bombay Custom House sought to classify the product under Chapter 32 though the appellants had imported similar items earlier under Chapter 38. The appellants submitted a detailed letter of protest through their advocates on 19th September, 1986 and having no alternative cleared the goods on payment of excess duty on 3rd October, 1986 under Chapter 32. In the said representation, it was clearly brought out that the imported item was a kind of finishing agent used in the paper industry, especially for coating papers called carbonised copying paper meriting classification under sub-heading 3809.92 and not as a dye under sub-heading 3204.19 as contended by the appraising group. Reference was also made to the technical literature issued by the supplier M/s. Bayer. The said representation also referred to the Chief Chemist's opinion and earlier practice of classifying such product under Chapter 38.
4. The appellants have brought to notice the chemical examiner's note dated 12-10-88 wherein he states that since there is a difference of opinion regarding the classification of the product, it has been suggested that the matter may be either referred to the chief chemist or to the next Collector's conference for decision.
5. The issue was discussed in the Tariff Conference on 8/9-12-1988 at Calcutta as seen from the Minutes thereof, where the chief chemist unequivocally expressed the view that the product in question merited classification under Chapter 38 and his view was accepted by the Collectors in conference leading to subsequent issue of tariff advice.
6. It is the appellant's submission that they filed the refund claim on 30-1-89 as soon as they came to know of the decision of the Tariff conference. In view of the said decision, the appellants no doubt have a clear case on merits in their favour.
7. As regards the time bar, it is seen that Section 27 of the Customs Act, 1962 provides for a time limit of 6 months from the date of payment of duty. At the same time, it provides for an exception that the time limit of 6 months will not apply where duty has been paid under protest. Secondly, Explanation to the said Section also stipulates that where duty is paid provisionally under Section 18, the limitation of 6 months shall be computed from the date of adjustment of duty after the final assessment thereof. Section 18 reads as under :- "Section 18. Provisional assessment of duty. - (1) Notwithstanding anything contained in this Act but without prejudice to the provisions contained in Section 46 - (a) where the proper officer is satisfied that an importer or exporter is unable to produce any document or furnish any information necessary for the assessment of duty on the imported goods or the export goods, as the case may be; or (b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test for the purpose of assessment of duty thereon; or (c) where the importer or the exporter has produced all the necessary documents and furnished full information for the assessment of duty but the proper officer deems it necessary to make further enquiry for assessing the duty; the proper officer may direct that the duty leviable on such goods may, pending the production of such documents or furnishing of such information or completion of such test or enquiry, be assessed provisionally if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency; if any, between the duty finally assessed and the duty provisionally assessed.
(2) When the duty leviable on such goods is assessed finally in accordance with the provisions of this Act, then - (a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed and if the amount so paid falls short of, or is in excess of [the duty finally assessed], the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be; (b) in the case of warehoused goods, the proper officer may, where the duty finally assessed is in excess of the duty provisionally assessed, require the importer to execute a bond, binding himself in a sum equal to twice the amount of the excess duty." 8. In the instant case, the appellants did file a letter of protest through their advocates before paying duty at higher rate under Chapter 32. Moreover, the assessing officers and the chemical examiners were clearly in doubt regarding the correct classification and that is why a reference was made to the Tariff Conference. In the meanwhile, the assessment was done at the higher rate obviously on a provisional basis under Chapter 32. Otherwise, it would have been incumbent on the Assistant Collector of the Assessing Group to give a personal hearing and pass a speaking order with reasons for changing the past practice of classification under Chapter 38 and charging higher duty under Chapter 32. No such order was passed finalising assessment under Chapter 32.
9. The CEGAT decision in the case of Ritspin synthetics, cited by the learned DR does not advance the case for time-bar as it has been decided therein that while a letter of protest is must, the endorsement on duty paying documents is not mandatory but only directory. In the instant case, there was a letter of protest filed by the appellants.
The copy of the Appraising Manual filed by the learned DR reproduces a C.B.R. letter of July 8/1955. It does mention that a protest may be either simultaneous with or subsequent to the payment of duty, but can never be prior to such payment. However, the said instructions also envisage filing of general protest raising a question of law valid for subsequent payments.
10. In view of the foregoing, the instant case is fully covered under the exceptions to the time-bar of 6 months provided in Section 27 of the Customs Act, 1962. Firstly, it is a case of payment of duty under protest and secondly, the assessments were tentatively and provisionally made pending reference to the Tariff Conference and thereafter, no order finalising the assessment has been passed. It is a strange case, where the assessing officers tentatively change the earlier assessment practice to the detriment of the appellants, without passing a speaking order, refer the matter to the Tariff Conference which decides in favour of the appellants, and yet, instead of correcting the wrong assessment made and refunding the excess duty collected on account of erroneous assessment, the appellant's refund claim is rejected after an inordinate delay of over four years on the ground of time-bar without going into merits.
11. The refund claim filed by the appellants is, therefore, held to be not hit by limitation of time under Section 27 of the Customs Act, 1962 and the impugned Order-in-appeal and Order-in-original are set aside.
Appeal is allowed by way of remand to the concerned Assistant/Deputy Commissioner of Customs with a direction to consider the refund claim of the appellants on merits within a period of 2 months of receipt of this order.