Ajay Industrial Corporation Ltd. Vs Assistant Commissioner of Customs (Refund) (Bombay High Court)
Bombay High Court held that customs duty paid on goods lost or rendered unavailable before the time of clearance for home consumptions is liable to be refunded back in terms of section 23 of the Customs Act, 1962. Accordingly, the petition is allowed.
Facts- The Petitioner has impugned the communication dated 28 December 2022 issued by Respondent No.1, whereby the Petitioner’s claim for refund of customs duty amounting to ₹35,37,358/- was rejected/disposed of. Notably, this is an unfortunate case where the Petitioner, despite having duly complied with all statutory obligations and paid the necessary customs duty, is forced to approach this Court due to a prolonged and unresolved dispute between Respondent No.1 and Respondent No.2. The Petitioner, who has neither received the imported goods nor obtained a refund of the duty paid, has had to run from pillar to post for nearly three years, caught between two public authorities, each seeking to shift responsibility onto the other.
Conclusion- Accordingly, whether the non-receipt of goods is regarded as a case of short landing or as loss after unloading but before clearance, the legal consequence remains the same: the importer cannot be held liable to pay customs duty on goods that were never cleared for home consumption. The obligation to refund such duty, along with statutory interest, under Sections 23, 27, and 27A of the Customs Act, 1962, cannot be delayed or avoided. If the customs authorities are confident in their legal and factual position, they can, at most, proceed against the Port authorities and recover the amount from them. We again clarify that this is not our opinion, as we are not assessing the issue of inter se liability between the Customs and port authorities. However, due to such an inter se dispute, the Petitioner cannot be denied relief after bona fide paying the customs duty and not receiving the goods.
