PATEL INDIA (PRIVATE) LTD. versus UNION OF INDIA & OTHER

Citation: [1973] 3 S.C.R. 811 · Decided: 28-03-1973 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
D 
E 
F 
G 
H 
PATEL INDIA (PRIVATE) LTD. 
V, 
UNION OF INDIA & OTHER~ 
(with connected petition) 
March 28, 1973 
[J. M. Sl:IELAT ACTING C.J. AND Y. V. Cl:IANDRACl:IUD, J.] 
Sea Customs Act, 1878-S. 40-Whether refund of excess ilnport duty 
comes under the Section. 
The appellant Company was the so1e distributing agent in India for 
the imported products of an American firm. 
The Customs authorities used 
to ]evy i1'tport duty on the basi.s of the invoice price under s. 29 read 
with s. 30 of the Sea Customs Act, 1878, as being the real value of the 
goods so imported. 
· 
During 1954~55, the appellant Company imported several items set out 
in. Annexure 'D' o'f the Special Leave Petition. 
\Vhen items 1 and 2 
arfived in Bombay Port, the Custom authorities, ignoring their hitherto· 
followed practice, refused to accept the invoice price as the real value and 
Jcvie<l excess duty. 
An appeal to the Customs Collector failed, where-
upon the appellant Company lodged a revision 
application 
before the 
Government of India. 
Pending the disposal of the said revision, several other items set out 
in Annexure 'D' arrived in Bombay Port and the Customs authorHies 
charged the Appellant-Company with excess· amounts as 
import duty. 
For fear of demurrage charges, the appellant-Company paid the excess 
duty under protest. 
In March, 1957, the Government of India disposed of the said revi-
sion, accepting the appellants' contention, and directed re~assessment of 
import duty on the said two items 1 and 2 on the basis of their invoice 
price and also ordered refund of the excess duty charged on them. 
The .appellaht-Company, however, did not file appeals in respect of 
the other items which had arrived during the pendency of the said revi-
sion, although the Customs had levied excess duty thereon. 
, / 
The Customs authorities 
refunded the excess duty levied on those 
items, for which applicatiort for refund was made within the time pres-
cribed under s. 40, 'but refused refund in respect of the rest of the items., 
An appeal to the Collector and a revision before the Government of 
India were both rejected. The appellant c9mpany, thereafter, filed a writ 
petition before the Delhi High Court for appropriate relief, but was with-
out success. 
The respondent contended' before .the Court that whatever claims were 
found not in time as required by s. 40 of'the Sea Customs Act have been 
correctly rejected by the Appraiser df Customs, Bombay, and therefore, 
the appellant-Company had nd claim. 
Allowing the appeal, 
HELD : (I) After the disposal of the revision by the Government of 
India, there was no doubt that the invoice prices were the real value of 
the consi&nments and the Custom authorities bad no right in law 
to 
charge extra duty on the rest of the consignments. 
Indeed the excess 
duty was charged in violation of Sections 29 and 30 and ln excess of 
811 
812 
SUPREME COURT REPORTS 
[1973] 3 s.c.R. 
jurisdiction. This position was also accepted by the Custom authorities 
when they ordered refund of excess duty charged by them in relation to 
items 22 to 29 and 33 to 35. [815HJ 
(ii) Section 40 had no application in the present case. Section 40 
clearly applies only to cases where duties have been paid through inadver-
tence, error or misc~truction, and where refund application has to be 
made within 3 months. The present case is not one where the excess duty 
was paid through any of the 3 reasons set out in S'.P.ction -40. The excess 
duty was demanded on the ground that the invoice price was not the real 
value of the imported goods. 
Since s. 40 did not apply to the facts of 
the case, the respondents could not retain the excess duty illegally. [816 DJ 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1799 of 
1969. 
Appeal btY special leave from the judgment and order dated 
April 5, 1967 of the Delhi High Court at New Delhi in letters 
Patent Appeal No. 44 of 1967 and Writ Petition No. 181 of 1967. 
A 
B 
c 
Petition under Article 32 of the Constitution of India for the 
enforcement of fundamental rights. 
D 
N. S. Bindra, S. K. Dholakia and Vineet Kl!.mar, for the appel-
lant and petitioner. 
S. N. Prasad and S. P. Nayar, for the respondents. 
The Judgment of the Court was delivered by 
SHELAT, ACTING C.J.-At all material times, the appellant-
company acted as the sole distributing agent in India for the pro-
ducts of Mis. Sawyer's Inc., Portland, U.S.A., and as such used 
to import Viewmaster stereoscopes,

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