T.P. Nambiar, Member (J)

1. The appellants have presented this appeal against the order passed by the Ld. Collector of Customs (Appeals), Custom House, Calcutta dated 22-7-1986 under Order No. Cal-Cus-1183/86.

2. The brief facts of the case are that the appellants Company submitted a claim for refund to the Ld. Assistant Collector of Customs, Custom House, Calcutta dated 12-3-1986 on the ground that there was an excess payment due to wrong calculation per s.s. "Castor" T/S. "Bengal Progress", under B/L No. 010 dt. 12-2-1985, Rot. No. 146/85, L/No. 113, B/E. No. DI/224 dt. 5-6-1985 against their P.O. : FE-448 dated 30-6-1984. They had stated in their application dated 12-3-1986 that they claimed a refund of Rs. 2149.99 which had occurred due to wrong calculation of the first item of the said B/E No. DI/ 224 dated 5-6-1985. They also prayed that the same may be registered under Section 154 of the Customs Act, 1962. Along with this application they also filed Triplicate copy of the B/E No. DI-224 dt. 5-6-1985 and the copy of the invoice.

3. After this refund claim was filed the Ld. Assistant Collector passed an order No. S 101-105/86 ARS dated 27-3-1986 stating that as the Importers application for refund had been received after the expiry of six months from the date of payment of duty, the same was time-barred under Section 27 of the Customs Act, 1962 and as such it was rejected. It is now admitted that the date of payment of duty was 5-6-1985 and the above-said application was filed on 30-3-1986 and therefore, the Ld. Assistant Collector rejected the claim.

4. Against that order the appellants approached the Ld. Collector (Appeals) who also upheld the order of the Assistant Collector and dismissed the appeal. Against that order the present appeal is filed before this Tribunal.

5. In the grounds of appeal, the most important point canvassed by the appellants is that the payment of duty was in excess and it was due to error in calculation only and according to the provision under Section 154 of the Customs Act, 1962, in respect of the clerical or arithmetical mistake any decision or order passed by the officer concerned, can be corrected. Therefore, it was stated that when the excess amount is levied by the Customs, which was not due to the Customs, such a correction must be made and the amount levied must be repaid or refunded. In this connection it was also contended that the claim of the appellants was solely dismissed in view of the Section 27 of the Customs Act while the claim filed by the appellants under Section 154, was not considered by both the lower authorities. It is, therefore, contended that the claim is one which is under Section 154 of the Customs Act and its rejection under Section 27 is not in accordance with law and without adverting to the provision of Section 154.

6. At the outset, at the time of hearing the Ld. J.D.R. raised a preliminary point stating that this is a second appeal and the amount is less than Rs. 10,000.00 and there is no point of law or fact involved and therefore, the same may not be admitted.

7. But the Ld. Counsel for the appellants stated that it is a case of arithmetical error which is required to be corrected in terms of Section 154 and they had filed a Refund Application mentioning this fact claiming the consequential relief and refund. However, the Ld. Assistant Collector rejected it as time-barred under Section 27 and the Ld. Collector (Appeals) upheld the same and both of them failed to consider Section 154 of the Customs Act in this regard.

8. On hearing both the sides we were of the considered view that it involved an important question of law and it was fit to be heard and accordingly the appeal was heard. The Ld. Consultant contended that in their application dated 12-3-1986 addressed to the Assistant Collector, the appellants specifically averred to the effect that there was an error in arithmetical calculation and requested him to register the application under Section 154 of the Customs Act, but while doing so, the same was dismissed in view of Section 27 and this fact though brought to the notice of the Ld. Collector he also upheld the earlier decision without referring to Section 154 of the Act.

9. But the Ld. J.D.R., Shri P.C. Jain opposed this argument and stated that the application dated 12-3-1986 is only a Refund Application which was received after the prescribed period of six months and therefore, it was barred under Section 27 of the Customs Act and he supported the conclusions arrived at by the two authorities below in this connection.

10. He, however, conceded that the appellants had mentioned the Section 154 to both the lower authorities i.e. A.C. and Collr. But it was his contention that in terms of Section 154 only clerical or arithmetical mistakes can be corrected and he stated that the Refund, if any due, can only be claimed under Section 27 of the Customs Act. In this connection, he drew our attention to an order of the Tribunal in A. No. CD(SB)20/82-D, dated 6-1-1983 [1983 (13) E.L.T. 1026 (Tri.)] and he also submitted that the same has been confirmed by the Honble Supreme Court vide Order No. 28/83-D dated 6-4-1984 (Should be Civil Appeal No. 1633/84, decided on 6-4-1984 - Ed.) in the case of Miles India Ltd. v. Assistant Collector of Customs 1987 (30) E.L.T. 641 (SC) , and in such circumstances, he stated that the impugned order is in accordance with the law.

11. The point that arises for consideration is whether the order is passed by the Collector in rejecting the application of the appellants as being barred under Section 27 of the Customs Act without reference to Section 154 and whether it is in accordance with law. To appreciate the contentions of both the sides, it is necessary to reproduce the contents of the application of the appellants dated 12-3-1986 which was made before the Ld. Collector. The application reads as follows :

"We do hereby submit our duty refund claim for an amount of Rs. 2149.99p. (Rupees two thousand one hundred forty-nine and paise ninety-nine only) due to wrong calculation of the 1st item of the said B/E. No. DI/224 dt. 5-6-1985 and register the same under Section 154 of C.A. 62. Please find enclosed herewith the following documents for your kind perusal and request you to settle our duty refund claim at your earliest.

(a) Triplicate copy of B/E No. DI-224 dt. 5-6-1985.

(b) Copy of invoice."...

12. It is, thus, seen that the application clearly states that a refund of duty application is made due to wrong calculation. But it was stated that the same may be registered under Section 154 of the Customs Act. However, the character of the application remains as an application for refund under Section 27. Even under Section 154 of C.A. 62, if an arithmetical mistake is corrected, the consequential relief will be the refund of the amount under Section 27 of the said Act. By merely adding the Section 154 of the Customs Act, 1962, the nature of the application does not change as one under Section 27 for refund of the amount so paid to one under Section 154 as one for wrong calculation. It was contended by the Ld. Consultant for the appellants that for making an application under Section 154, there is no time-limit. It is no doubt true that no time-limit is mentioned in making the application under Section 154 of the Customs Act. But Sees. 154 and 27(A) have to be read conjointly and they cannot be read in isolation of each other. They claimed for refund of duty under Section 27. Hence, if the claim for refund is beyond the time-limit prescribed under Section 27, then such a claim is able to be rejected.

13. In this connection, the Ld. J.D.R. relied on a decision of the C.E.G.A.T., Delhis Order-in-Appeal No. CD(SB)-20/82D, dated 6-1-1983 reported in 1983 (13) E.L.T. 1026 (CEGAT) in the case of Miles India Ltd., Baroda v. Appellate Collector of Customs, Bombay . Therein at paragraphs - 31 to 34 the following observations have been given :

"31. We are thus of the firm view that any claim filed before the customs authorities for refund of the excess duly has to be treated under Section 27 of the Customs Act, because there is no other provision providing for application for refund before the customs authorities, and the parties filing such refund claim are to be regulated by and restricted to the time limit provided therein and customs authorities would be right in rejecting the claims filed after the expiry of the period contemplated therein and parties are debarred from urging general principles of law of limitation in proceedings before the customs authorities.

32. Our further reason why we do not feel impressed with the argument of the Ld. Counsel for the appellant that his application was not to be treated under Section 27 of the Customs Act is because it is apparent from record that the application was filed in the prescribed proforma which has apparently reference to Section 27 of the Customs Act because there is no other provision whereunder claim for refund could be filed before the authorities prescribed by the Customs Act.

33. This Tribunal while examining orders passed by such customs authorities, acting under the Act, has to examine their propriety and legality solely with reference to the provisions of the Act itself, and we find that the Customs Act does nowhere contemplate that any cause could be set up by the parly before the customs authorities as justification for the delay, and it is the established proposition that the general law of limitation cannot be invoked before quasi-judicial authorities, which proposition has been laid down by the Supreme Court, in the case earlier referred to; namely, : A.I.R. 1975 SC 1039 and also subsequently in another case, reported as : A.I.R. 1978 SC 209 .

34. On a resume of the foregoing discussion, making reference to a number of authorities wherein the principle that statutory authorities are bound by the time limit provided by the Statute, was approved and confirmed, we do not find any ground to interfere in the present appeal. The same is accordingly dismissed."

This decision was taken up before the Honble Supreme Court and the S.C. in the same Appeal No. (Order No. 28/83-D) held as follows : reported in 1987 (30) E.L.T. 641 (SC) .

"After the matter was heard for some time and it was indicated that the Customs Authorities, acting under the Act, were justified in disallowing the claim for refund as they were bound by the period of limitation provided therefore under Section 27(1) of the Customs Act, 1962, learned counsel for the Appellant sought leave to withdraw the appeal. We accord their leave to withdraw the appeal but make it clear that the order of the Customs, Excise & Gold (Control) Appellate Tribunal suffers from no infirmity. If really the payment of the duty was under a mistake of law, the appellant may seek recourse to such alternative remedy as it may be advised.

The appeal is accordingly dismissed as withdrawn."

14. It was, therefore, contended by the Ld. J.D.R. that the Supreme Court has clearly stated in the order that there was no infirmity in the orders passed by the Customs Tribunal in Miles Indias case. He stressed the observation of the Supreme Court that if the payment of duty was made under a mistake of law the appellants may seek recourse to such an alternative remedy. In this case, the payment of duty, no doubt, is due to a wrong calculation. But, however, the only provision for refund is Section 27 of the Customs Act and there is no other provision providing for an application for refund before the Customs Authorities. In such cases, the partys filing such refund claim has to be regulated and restricted to the time-limit provided under the Act and the Customs Authorities are bound by the provisions of the Act, in which they have to refund the claim, and they cannot be asked to follow the principles of law of limitation, as far as the Customs Act is concerned. The mere fact that the appellants have mentioned Section 154, is no reason to construe the Refund Application as an application not coming within the purview of the Section 27 of the Act. Even if the correction under Section 154 is made, the fact remains that the Refund of the same can be allowed only under Section 27 of the Customs Act, as there is no other section providing for the same. Therefore, merely to make a correction becomes superfluous when such an amount, if found due, cannot be refunded, in view of the bar prescribed under Section 27 of the Act.

15. The Supreme Court further examined the provisions of the Act in a case reported in 1988 (37) E.L.T. 478 (SC) in the case of Collector of Central Excise, Chandigarh v. Dociba Cooperative Sugar Millls . In the said case in para-6, the Honble Supreme Court has held as follows :

"Para 6 : 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 (he 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 case when such a remedy is open on the ground that the money received by the assessee was not in the nature of refund. This was the view taken by the Tribunal in a previous decision in the case of Miles India Ltd. v, The Assistant Collector of Customs but it was assailed before this Court. The appeal was withdrawn. This Court observed that the Customs Authorities, acting under the Act, were justified in disallowing the claim for refund as they were bound by the period of limitation provided therefore in the relevant provisions of the Customs Act, 1962. If really the payment of the duty was under a mistake of law, the party might seek recourse to such alternative remedy as it might be advised. See the observations of this Court in Miles India Ltd. v. Die Assistant Collector of Customs 1985 LCR 289 ;"

16. It was held in that decision 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. It was held by their Lordships that in making a claim for refund before the Departmental Authority the 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. Their Lordships were of the view that the authorities functioning under the Act are bound by the provisions of the Act. Their Lordships also referred to the case of Miles India Limited v. Assistant Collector of Customs in this regard. This clearly goes to show that their Lordships considered the Miles India case and approved the principles which were laid down by the C.E.G.A.T., Delhi in this regard. In such circumstances, when the Honble Supreme Court has already held that the party claiming refund is bound by the four corners of the Act, his application is liable to be rejected as being one which is outside the time-limit prescribed under the Act. As already held by me Section 154 is to be read simultaneously with Section 27 of the Customs Act, 1962. If that is so, a mere correction under Section 154 will have no meaning, if by virtue of such correction, the prayer of the appellants for refund of the amount has to be rejected in view of the limitation prescribed under Section 27 of the Customs Act. The prayer of the appellants cannot be treated in isolation as one for correction and another for refund. The prayer is to be treated as a single prayer which is one for correction and the consequential act of refund. The appellants have stated in their application dated 12-3-1986 that the correction may be made under Section 154 and the refund may be allowed. Even in this appeal before the Tribunal the prayer of the appellants is as follows :

"Therefore, the findings of Judgement by both the authorities appear to be incorrect and far from truth. In fact, the claim was lodged under Section 154 and appeal also filed under the same Section. It is, therefore, submitted before your honour go through the records enclosed herewith with a request to remand the case for reconsideration and its consequential refund of excess amount realised."

17. Therefore, the prayer of the appellants is one for correction and the consequential relief of refund which arc to be read together as otherwise it will a meaningless or superfluous order for ordering a correction and then to order that the refund claim is barred by time. The prayer of correction and refund is linked with each other and is not separable. Therefore, if ultimately the prayer for refund has to be rejected on the ground of limitation it goes without saying that there is no justification for the correction of the order and in such circumstances, I am of the considered view that the Ld. Collector was right in rejecting the appeal.

18. Hence this appeal is hereby dismissed.

S.K. Bhatnagar, Member (T)

18A. With due respects to the Honble Member (J) my view in this case is as follows :-

A perusal of the application filed by the appellants before the Assistant Collector clearly shows that this application included a request for correction of an arithmetical error and consequential refund.

19. It is also an admitted fact that both the original as well as the appellate authorities have not recorded any finding with reference to the request made under Section 154 for correction of error. This omission by the lower authorities, ipso facto, renders their orders defective.

20. That apart, in my opinion, Section 154 and Section 27 of the Customs Act are independent provisions which do not refer to each other and which have no connection with each other. In fact they are distinguishable both in nature and scope as would be apparent from what follows.

21. For the sake of convenience of reference Section 154 is reproduced below :

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 successor-in-office of such officer, as the case maybe."

22. A plain reading of the above provision shows that it does not refer specifically to any particular section as such, but allows correction of "any decision or order" "at any time".

23. The use of the words - at any time - is significant and in stark contrast with the provision of a specific time-limit of six months only in Section 27.

24. Since Section 154 does not provide any time-limit it will not be correct or proper to import and apply the time-limit provided under Section 27 for granting relief due with reference to Section 154.

25. It has been pleaded that the mistakes can be corrected at any time under Section 154, but consequential relief could not be granted under that Section. But this argument does not appeal to my mind as such an inference was not warranted from the language of the Section and if accepted, would, inter alia, render the provision of this section merely academic and fruitless in all those cases in which errors/mistakes are detected after six months and will militate against the provision of any time.

26. It is also noteworthy that there is a separate provision for amendment of documents in the Customs Act in the form of Section 149 which further buttresses the belief that correction in terms of Section 154 was not expected to be merely for the sake of record, but was intended to let the consequences of correction flow in the normal course and become available to the affected party at any time.

27. Further, in my opinion, a power to correct mistake or error implies a power to grant consequential relief, if any due (or take any other appropriate action which may flow therefrom in the natural course). And this applies to the corrections made under Section 154 as much as it does to the corrections of error apparent in terms of Section 129D(2).

28. Therefore, I am of the view that in case of a request seeking correction under Section 154, no further application was called for under Section 27 or any other section and the authorities were required to examine the request in terms of Section 154 only and if satisfied they were duty-bound to order correction and grant consequential relief, if any due, suo motu.

29. Further, in my opinion, the cases of Miles India and Doaba Co-operative Sugar Mills referred to by the Ld. S.D.R. and the Ld. Brother, M (J), are distinguishable. Both these cases do not deal with or refer to Section 154 or any other similar provision and are not judgments with reference to case of error apparent of the type falling under the aforesaid section. In fact, both these cases deal, inter alia, with the question of mistake of law and not with mistake of facts which may have crept in inadvertently or accidentally due to clerical or arithmetical error. The above two cases are thus entirely on a different footing and distinguishable, both on facts and in law.

30. I may also take this opportunity to mention that the Ld. JDRs contention that Section 27 was only section governing refund, was erroneous as this section was not the only section concerned with refund, re-payment/return of money under the Customs Act. Actually, over-payment and consequentially subsequent return or re-payment of money received in excess could be involved in a number of situations distinct and distinguishable from those referred to under Section 27 as illustrated in the annexure to this order. It would be seen therefrom that Section 27 actually comes into play only in those cases of refund of import duty which arise pursuant to an order of assessment made by an officer lower in rank than Assistant Collector and does not cover other situations which may call for repayment or refund of export duty and other types of sums and amounts which are not in the nature of duty, such as fees, fines, penalty, warehousing dues or charges and sums adjusted or paid in terms of various bonds prescribed under different sections, rules and regulations. Section 27 does not even cover those import cases in which assessment has been made by any officer of the rank of Assistant Collector and above or a notification has been issued under Section 28A. It also does not cover such cases in which an amount is paid erroneously in excess of the amount assessed as duty as such sum could not be considered as duty paid in pursuance of an order of the proper officer. In contrast, a correction in terms of Section 154 may be required to be made in a decision or order passed under any section or rule or regulation and therefore, may be required to be made with reference to, say, export duty or sums other than duty also. Furthermore the correction may indeed result into a demand and not refund. In view of this position, it will not be proper to tie Section 154 to the apron strings of Section 27 which has a very limited scope and is confined to cases arising in certain circumstances only.

31. Further, as a reference has been made to the Central Excises Act, 1944 and Section 11B has been made out as a corresponding provision, I may observe en passant that strictly speaking Section 11B of the Central Excises Act and Section 27 of the Customs Act are not para materia. That apart, Section 11B also has a limited scope and provides only for refund of amounts paid as duty and certain specified types of sums, but not all types of sums. As for example, it does not cover refund of fees and charges and amounts adjusted in account current. (This would be clear from a comparison of language of old Rule 11 and Section 11B). It also docs not cover return of money which may become due to over-payment of fine, penalty, warehousing dues or sums adjusted, paid or appropriated in terms of various bonds presented under various rules, as also the sums required to be returned on account of over-payment of amounts compounded in terms of Rule 210A. That apart, as in cases of Customs so in Central Excise, a correction may not always result into refund but may result into demand as well.

32. Reverting to the present case I observe that the orders of the authorities below suffer from yet another infirmity inasmuch as they do not record a finding as to whether the assessment in the present case was made by an Assistant Collector which was necessary in view of the prevailing practice of counter-signature of the Bills of Entry by the Assistant Collector. This was important from the point of view of determining as to whether the A.C. was competent to pass the impugned order-in-original even according to the Departments own viewpoint. As it is, however, Section 27 was not relevant, therefore, I am not labouring this point further.

33. In view of the above discussion I beg to differ from the Ld. Member (J). 1 consider that in terms of Section 154 arithmetical or clerical errors which might have crept in inadvertently or accidentally, could be corrected any time and consequential relief, if any, due, could be granted by the proper officer under this Section itself.

34. Since, however, the case has not been examined on merits in terms of Section 154 by the lower authorities their orders are required to be set aside and the matter is required to be remanded to them for de novo consideration in the light of the above observations and the law.

It is ordered accordingly.

Jyoti Balasundaram, Member (J)

35. The following questions have been referred to us for decision as a result of difference of opinion between the learned Members of the East Regional Bench :-

"Whether (a) Section 154 and Section 27 of Customs Act, 1962 are independent of each other; or (b). The above Sections have to be read together (i.e. conjointly) in cases of refunds;

If the answer is in the affirmative in respect of (a) above, then whether there is any time-limit for granting relief in such cases.

If the answer to (b) above, is in the affirmative, whether the time-limit prescribed under Section 27 applies to all cases of refund under the Customs Act, 1962 (including these involving merely correction of clerical, typographical or arithmetical errors)".

36. The brief facts of the case are as follows :-

The appellant-company submitted a claim for refund dated 12-3-1986 on the ground that there was an excess payment due to wrong calculation under the Bill of lading dated 12-2-1985. In their application of 12th March, 1986 they claimed a refund of Rs. 2,149.99 which had occurred due to wrong calculation of duty on the first item of the Bill of Entry dated 5-6-1985 and they also requested that their application may be registered under Section 154 of the Customs Act, 1962. The Assistant Collector rejected their claim on the ground that their application for refund having been received after expiry of 6 months from the date of payment of duty, the same was time-barred under Section 27 of the Customs Act. The Collector (Appeals) also upheld the order of the Assistant Collector and against his Order, an appeal was preferred before the East Regional Bench of this Tribunal.

The question for consideration before the East Regional Bench was whether the order passed by the Assistant Collector in rejecting the application of the appellants as being barred under Section 27 of the Customs Act without reference to Section 154 is in accordance with law. The learned Judicial Member was of the opinion that the prayer of the appellants cannot be treated in isolation as one for correction and another for refund and both are to be read together and are not separable. He held that Sections 27 and 154 are not independent of each other and they have to be read together and, therefore, he rejected the appeal.

37. However, the learned Technical Member held the opinion that Section 154 and Section 27 of the Customs Act arc independent provisions which do not refer to each other, which have no connection with each other and which are distinguishable in nature and scope. He further held that Section 154 does not impose any time limit for correction of clerical or arithmetical mistake.

38. In view of the above difference of opinion the matter has been referred to us for our opinion.

39. We have heard Shri R.K. Jain, Secretary of the CEGAT Bar Association to whom Notice was issued and Smt. Dolly Saxena, learned SDR for the Respondent.

40. Shri Jain submits that Sections 27 and 154 are independent of each other and in support of his contention he cited the decision reported in 1984 (24) E.L.T. 589 (CEGAT-SRB) - Collector of Central Excise v. Southern Sulphates and Chemicals Private Limited . Shri Jain argues that the power of the Collector is wider than the power of this Tribunal for the following reasons :-

(a) Under Section 128 of the Customs Act, the Collector can hear appeals against both orders and decisions while the Tribunal can hear appeals against orders alone.

(b) Under Section 128A(2) the Collector can go into fresh grounds of appeal, while the power of the Tribunal to do so is not conferred by statute but only under the CEGAT (Procedure) Rules, 1982.

(c) Under Section 128A(3) the Collector has powers of further enquiry while the Tribunal is bereft of such power.

41. On the question of arithmetical mistake, he submits that such mistakes will only relate to mistake in calculation of duty.

42. Shri Jain takes us through the scheme of the Customs Act and contends that Section 27 is not the relevant Section in this case for the following reasons :-

(a) Every provision of the Customs Act is an independent and separate provision;

(b) Section 154 confers powers to correct but does not speak of the consequences;

(c) An order of assessment becomes final if not appealed against;

(d) Section 154 does not exclude Section 128 and, therefore, by necessary implication Section 154 excludes Section 27;

(e) Section 27(3) foresees a situation where application for refund under Section 27(1) is not required and Section 27(4) bars entertainment of a claim for refund except in accordance with the provisions of Section 27;

(f) Section 27 speaks only of claims of refund of duty while Section 154 does not talk of claims alone but takes into account suo motu claims also.

43. On the question of limitation under Section 154 Shri Jain says that Section 154 itself makes a provision for time limit as it contains the words at any time and, therefore, there is no time limit for granting relief under Section 154 and the limitation under Section 27 cannot be read into Section 154. Shri Jain cites the decision reported in AIR 1979 Punjab 74, where Section 152 of the Civil Procedure Code has been interpreted to mean that clerical and arithmetical mistakes can be corrected either on an application or suo motu. According to Shri Jain, Section 154 is a special self-contained provision, complete by itself. He further urges that once a correction is made under Section 154, it dates back to the date of the original order which should be read as corrected and the question of refund under Section 27 does not arise.

44. Smt. Dolly Saxena, appearing for the Department, strenuously argues that Section 154 and Section 27 are to be read together and that they are not separable. She contends that for the purpose of relief of refund the time limit is provided only under Section 27. She submits that assessment, if incomplete, is not an order and she also submits that reference to words "at any time" contained in Section 154 is only for the purpose of correction of arithmetical or clerical mistakes and not for the purpose of granting the relief of refund.

45. In rejoinder Shri Jain states that refund flows as a consequential relief and in support of this contention he cites the decision reported in 1981 Tax Law Reporter 2796.

46. We have carefully considered the submissions made by both sides.

47. Section 154 of the Customs Act, 1962 reads as follows :-

"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 successor-in-office of such officer, as the case maybe."

A plain reading of the Section makes it clear that it provides for correction of clerical or arithmetical mistakes in "any decision or order" "at any time". This Section is independent of Section 27 which deals with claims for refund of duty and provides a specific limitation of 6 months (or one year, as the case may be). Both Sections are distinct and separate, in nature and in scope and provide for different remedies.

48. Section 27 is not the only Section relating to refund of money under the Customs Act. Section 27 applies only in those cases of refund of import duty which arises pursuant to an oder of assessment made by an officer lower in rank than Assistant Collector and does not cover other cases of repayment or refund of export duty and other sums which are not in the nature of duty, such as fees, fines, penalty, warehousing dues or charges. Section 27 also does not cover those cases of import in which assessment has been made by an officer of the rank of Assistant Collector and above. On the other hand, a correction under Section 154 may be required to be in a decision or order passed under any Section or Rule and, therefore, may be required to be made with reference to export duty or sums other than duty also. The correction may result in a demand in some cases. Therefore, the scope of Section 154 is wider than that of Section 27.

49. The next question that arises for decision is whether Section 154 provides only for correction of errors, or whether it also provides for relief consequent to such correction. If the argument that relief flowing as a result of correction under Section 154 cannot be granted is to be accepted, then the provisions of Section 154 would be rendered nugatory in all cases in which errors are traced after 6 months from the date of payment of duty. This could not have been the intention of the Legislature whilst enacting Section 154. A power vested in an authority to correct a mistake or error includes a power to grant consequential relief, if any.

50. We find that the Southern Regional Bench, in the case of Collector of Customs, Madras v. Southern Sulphates & Chemicals (P) Ltd. has held that Section 154 of the Customs Act applies in the case of clerical or arithmetical errors and the Southern Regional Bench ordered correction in the quantum of duty, upheld the order of the Collector (Appeals) and dismissed the Departmental appeal with consequential benefit to the respondents. In that case also, there was a mistake in calculation of rate of duty in that, instead of calculating the quantum of duty at the rate of 40%, the rate had been calculated at 100%.

51. Coming next to the question whether there is any time limit for granting relief in such cases, the use of the words "at any time" contained in Section 154, makes it abundantly clear that relief can be granted at any time and the limitation provided under Section 27 cannot be made applicable to grant of relief under Section 154.

52. The reference is thus answered as follows :-

(a) Section 154 of the Customs Act, 1962 is independent of Section 27.

(b) Relief under Section 154 can be granted at any time as no time-limit has been prescribed in the Section.

Sd/- Sd/-

I.J. Rao Jyoti Balasundaram

Member (T) Member (J)

G.P. Agarwal, Member (J)

53. I have had the privilege to read and re-read the erudite judgment proposed by my learned sister Ms. Jyoti Balasundaram, Judicial Member and agreed to by my learned brother Shri I.J. Rao, Technical Member but with respect I am unable to persuade myself to agree with the proposed judgment.

54. Though brief facts of the case have been stated in paragraph 36 of the proposed order, it would be useful to state a few more facts to decide the questions referred to us for our opinion.

55. The appellants imported certain goods under B/L No. 010 dated 12-2-1985 and after filing the Bill of Entry No. DI/224 dated 5-6-1985 and payment of duty on 5-6-1985 cleared the goods for home consumption. Subsequently they filed their application for refund dated 12-3-1986 to the Assistant Collector of Customs, Custom House, Calcutta (which was received in his office on 30-3-1986) on the ground that there was an excess payment due to wrong calculation of the 1st item of the said B/E No. DI/224 dated 5-6-1985 and requested that this application/claim be registered under Section 154 of the Customs Act, 1962. However, the Assistant Collector vide his Order-in-Original No. S. 101-105/86 ARS dated 27-3-1986 rejected the claim of the appellants as time-barred under Section 27 of the Customs Act, 1962 holding that the importers application for refund was received in his office after the expiry of 6 months from the date of payment of duty. Against that order the appellants filed their appeal before the Collector (Appeals) inter alia agitating that their plea that the refund claim could be considered in terms of Section 154 of the Customs Act, 1962 was overlooked by the Assistant Collector. However, he did not agree with the appellant and upheld the order of the Assistant Collector and dismissed the appeal. Hence the appellants preferred their appeal before the East Regional Bench of the Tribunal, which was heard by two Members Bench. During the hearing the crucial point canvassed by the appellants was that the excess payment of duty was due to error in calculation only and according to the provisions of Section 154 of the Customs Act, such mistake should have been corrected being clerical or arithmetical mistake and the excess so arrived at, be refunded. Hence the authorities below erred in rejecting the claim in view of the provisions of Section 27. However, both the learned Members constituting the Bench differed. The learned Judicial Member after considering the scheme of the Act and the relevant provisions opined that the provisions of Section 27 and Section 154 are to be read simultaneously and not in isolation, whereas the learned Technical Member opined that Section 27 and Section 154 of the Customs Act are independent provisions which do not refer to each other and further that they have no connection with each other and are distinguishable in nature and scope. He also opined that in terms of Section 154 clerical or arithmetical errors which might have crept in inadvertently, could be corrected any time and consequential relief, if any, could be granted by the proper officer under this Section itself. Under these circumstances the Bench has referred the following questions for our opinion :-

"Whether (a) Section 154 and Section 27 of Customs Act, 1962 are independent of each other; or (b) The above sections have to be read together (i.e. conjointly) in cases of refunds;

If the answer is in the affirmative in respect of (a) above, then whether there is any time-limit for granting relief in such cases.

If the answer to (b) above, is in the affirmative, whether the time-limit prescribed under Section 27 applies to all cases of refund under the Customs Act, 1962 (including those involving merely correction of clerical, typographical or arithmetical errors)".

56. At the outset it may be pointed out that in the proposed order reliance has been placed on the case of Collector of Customs, Madras v. Southern Sulphates and Chemicals (P) Ltd., reported in 1986 (24) E.L.T. 589 - a case decided by the South Regional Bench, Madras - for taking the view that Section 154 of the Customs Act, 1962 is independent of Section 27 and the relief under Section 154 can be granted at any time as no time limit has been prescribed in this Section. But it deserves to be mentioned here that this case was distinguished by the Special Bench A in the case of Minerals and Metals Trading Corporation of India Limited v. Collector of Customs, Bombay, 1987 (28) E.L.T. 128 observing that "In that case, the quantity, description and value of the goods had been correctly stated in the Bill of Entry. The assessing officer put down the rates of duty applicable against each item also correctly. It was the clerk/comptist, who made the mistake inasmuch as for one item he calculated the duty as 100% instead of at the correct rate of 40% indicated by the assessing officer." Proceeding further it was also observed that even assuming that an error had arisen in any decision or order of assessment due to an accidental slip or omission, be it by the party or by the assessing Customs Officer, and that such an error was rectifiable under Section 154, still it would not be possible to grant any refund consequent upon such rectification as it would set at naught the mandatory bar of Section 27(4). The two provisions of the Act - i.e. to say Section 27 and Section 154, have to be interpreted harmoniously so that neither is rendered nugatory. For ready reference the said observations are reproduced as under -

"7. Even assuming that an error had arisen in his order of assessment due to an accidental slip or omission, be it by the appellants or by the assessing customs officer, and that such an error was rectifiable under Section 154, still it would not be possible to grant any refund consequent upon such rectification as it would set at naught the mandatory bar of Section 27(4). The two provisions of the Act - Section 27 and Section 154 - have to be interpreted harmoniously so that neither is rendered nugatory. Refund involves a substantive review of the assessment made earlier. That is why Section 27 requires that such review should be undertaken by an appropriate higher officer - by the Assistant Collector in case the assessment had been made by an officer lower in rank than him or by the Collector (Appeals) if the assessment had been made by the Assistant Collector. Conversely, the same is true of short levy collection under Section 28 also. The customs officer who had made the assessment cannot himself review his order so as to result in grant of refund or collection of short levy. The view canvassed by the appellants that the assessing customs officer should rectify his order of assessment under Section 154 and consequent upon such rectification refund of Rs. 1,61,527.79 should be paid to them ignoring the provisions of Section 27 is, therefore, unacceptable. The doctrine of harmonious construction requires that rectification envisaged under Section 154 should be such as not to involve refund or short levy demand. For the latter, the specific provisions of Section 27 and Section 28 have to prevail."

57. From the record it appears that the said case of Minerals and Metals Trading Corporation of India Limited v. Collector of Customs, Bombay , supra, was not brought to the notice of the East Regional Bench at the time of hearing of the appeal on merits neither it was cited at the Bar during the hearing before us.

58. After giving my due consideration I agree with the ratio of the said judgment rendered in the case of Minerals and Metals Trading Corporation of India Limited v. Collector of Customs, Bombay , supra and would also like to add as under -

59. Prior to the enactment of the Customs Act, 1962 (which came into force from 1-2-1963) the refund claims for the repayment of duties that had been paid were governed by Section 40 and Section 140 of the Sea Customs Act, 1878. The said sections may be reproduced herein with advantage, which runs thus -

"Section 40. - No customs duties or charges which have been paid and of which repayment, wholly or in part is claimed in consequence of the same having been paid through inadvertence, error or misconstruction shall be returned, unless such claim is made within three months from the date of such payment."

"Section 140. - If any goods mentioned in a shipping bill or manifest be not shipped, or be shipped and afterwards relanded, the owner shall before the expiration of five clear working days after the vessel on which such goods were intended to be shipped or from which they were relanded, has left the port, give information of such short shipment or relanding to the Customs Collector. Upon an application being made to the Customs Collector, any duty levied upon goods not shipped, or upon goods shipped and afterwards relanded, shall be refunded to the person on whose behalf such duty was paid : Provided that no such refund shall be allowed unless information has been given as above required."

60. Interpreting the said Section 40 it was held by the Allahabad High Court in the case of Union of India v. Bhagvan Industries, : AIR 1957 All. 799 that a plain reading of the provisions of Section 40 shows that the Customs duties or charges paid through inadvertence, error or misconstruction would be refundable only if a claim was made within three months from the date of such payment. In other words the claim for refund could be made only where the excess duty was paid through inadvertence, error or misconstruction.

61. By enacting the Customs Act, 1962, Sections 26 and 27 have been brought on the statute, which runs thus -

"Section 26. Refund of export duty in certain cases. - Where on the exportation of any goods any duty has been paid, such duty shall be refunded to the person by whom or on whose behalf it was paid, if -

(a) the goods are returned to such person otherwise than by way of re-sale;

(b) the goods are re-imported within one year from the date of exportation; and

(c) an application for refund of such duty is made before the expiry of six months from the date on which the proper officer makes an order for the clearance of the goods."

"Section 27. Claim for refund of duty. - (1) Any person claiming refund of any duty paid by him in pursuance of an order of assessment made by an officer of customs lower in rank than an Assistant Collector of Customs may make an application for refund of such duty to the Assistant Collector of Customs -

(a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, before the expiry of one year;

(b) in any other case, before the expiry of six months, from the date of payment of duty :

Provided that the limitation of one year or six months, as the case may be, shall not apply where any duty has been paid under protest.

Explanation. - Where any duty is paid provisionally under Section 18, the period of one year or six months, as the case may be, shall be computed from the date of adjustment of duty after the final assessment thereof.

(2) If on receipt of any such application the Assistant Collector of Customs is satisfied that the whole or any part of the duty paid by the applicant should be refunded to him, he may make an order accordingly.

(3) Where, as a result of any order passed in appeal or revision under this Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf.

(4) 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.

(5) Notwithstanding anything contained in any other law, the provisions of this Section shall also apply to a claim for refund of any amount collected as duty of customs made on the ground that the goods in respect of which such amount was 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."

62. It may be stated that Section 26 of the present Act is on the lines of erstwhile Section 140 of the Customs Act which deals with the refund of export duty in certain circumstances with which we are not concerned in the present case.

63. While enacting the present Section 27 it was stated that new provisions of Section 27 will apply to all types of refunds without any qualifying condition as at present i.e. erstwhile Section 40, (See Statement of Objects and Reasons).

64. From a close reading of the present Section 27 it is clear that it provides a complete machinery for refund of duty and applies to all types of refund without any qualifying condition. Sub-section (4) of this section expressly lays down that "Save as provided in Section 26 (which is not applicable in the present case as it deals with refund of export duty in certain cases) no claim for refund of any duty shall be entertained except in accordance with the provisions of this Section." From the language employed in this sub-section it is clear that it is mandatory in nature. I lay stress on the words "Save as provided in Section 26" and "except in accordance with the provisions of this Section". These words are absolute, explicit and peremptory and make the intention of the Legislature clear that all types of refund of any duty paid by the importer in pursuance of order of assessment made by an officer mentioned therein shall be governed by this Section alone. It is significant to note that in this sub-section the Legislature has not employed the words "Save as otherwise provided by or under this Act, no claim for refund of any duty shall be entertained" unlike the other Acts. For example, Section 11B of the Central Excises and Salt Act, 1944 makes provision for the claim for refund of duty paid and in its Sub-section (4) the Legislature has employed the language "Save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be entertained". Thus, in my considered opinion the use of the words "Save as provided in Section 26" and "except in accordance with the provisions of this section" excludes the applicability of any section or provision appearing in the Customs Act whenever any person claims refund of any duty paid by him in pursuance of an order of assessment made by an officer of Customs lower in rank than an Assistant Collector of Customs.

65. Now look at Section 154 of the Customs Act which runs thus -

"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 successor in office of such officer, as the case may be."

66. The said section was also brought on the statute alongwith Section 27 by enacting the Customs Act, 1962. Section 154 which provides for correction of clerical or arithmetical mistakes in any decision or order passed by the authorities mentioned therein or errors arising therein from any accidental slip or omission, at any time by the authorities mentioned therein. This is comparable to Section 152 of the Code of Civil Procedure, 1908, which reads as "Clerical or arithmetical mistakes in judgments, decrees or orders or errors arising therein from any accidental slip or omission may at any time be corrected by the Court either of its own motion or on the application of any of the parties". This Section 154 does not deal with the claims for refund of duty unlike Section 27. All that it requires is that the authorities concerned mentioned therein are required to rectify a clerical or arithmetical mistake or error arising from an accidental slip or omission whenever it comes to its notice and this rectification or amendment can be made at any time. Beyond that it does not go. It does not in any way control or effect the period of limitation prescribed for claiming the refund of duty under Section 27. This section spells about the rectification of the mistake or error. That provision, by itself does not lay down that the refund of duty shall be granted. That requirement of refund of duty has got to be gleaned from Section 27. This has nothing to do and will not govern the period of limitation prescribed under Section 27 of the Act for claiming the refund under the circumstances mentioned therein. Needless to say that even under the common law whenever a judgment or decree or order is amended under Section 152 of the Code of Civil Procedure, 1908 time does not run from the date of the amendment even if the appeal is against the amended portion, It does not effect or alter the period of limitation prescribed under the Limitation Act. See T. Appukuttan v. Gopala Pillai, : AIR 1969 Ker. 183 and Suba Singh v. Sadhu Singh, AIR 1966 Punjab 518 . It is true that according to Section 154 of the Customs Act clerical or arithmetical mistakes can be corrected at any time but from this it does not follow that refund can be granted to a party irrespective of the provisions of Section 27. Had it been the intention of the Legislature that the refund, commonly known as consequential relief may be granted at any time i.e. to say when any judgment or decree or order is amended, then the Legislature would not have enacted Sub-section (4) in Section 27. It is to be remembered that both Section 27 and Section 154 were brought on the statute at the same time. Thus, if it is held that refund of duty which may arise on account of correction of clerical or arithmetical mistakes/errors may be granted at any time irrespective of the mandatory provisions of Sub-section (4) of Section 27, then in that case the provisions of Sub-section (4) of Section 27 would become nugatory. It may be stated that it is the salutary principle of interpretation of statute that a statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act so as to make it consistent enactment of the whole statute for, such a construction has the merit of avoiding any inconsistency or repugnancy between a section and other parts of the statute. It is the duty of the Courts to avoid "a head-on clash" between two sections of the same Act. The provisions of one section of a statute cannot be used to defeat those of another "unless it is impossible to effect reconciliation between them". As stated by His Lordship Shri Venkatrama Aiyar in Venkataramana Devaru v. State of Mysore, : AIR 1958 SC 255 "The rule of construction is well settled that when there are in an enactment two provisions which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. This is what is known as the rule of harmonious construction." That, effect should be given to both, is the very essence of the rule. Thus a construction that reduces one of the provisions to a "useless lumber" or "dead letter" is not harmonious construction. To harmonise is not to destroy.

67. Thus, in view of the above I answer the question referred to us for our opinion as under -

Both these Sections 27 and 154 of the Customs Act are to be read together in cases of refund when any person claims refund of any duty paid by him in pursuance of an order of assessment made by an officer of Customs lower in rank than an Assistant Collector of Customs and time limit prescribed under Section 27 would apply.

ORDER

68. In view of the majority decision, it is held that:

(a) Section 154 of the Customs Act, 1962 is independent of Section 27; and

(b) Relief under Section 154 can be granted at any time as no time-limit has been prescribed in the Section.

Accordingly, since the case has not been examined on merits in terms of Section 154 by the lower authorities, their orders are set aside and the matter is remanded to them for de novo consideration in the light of the observations supported by the majority opinion, and the law.

28th September, 1990 Sd/- Sd/-

(T.P. Nambiar) (K. Sankararaman)

Member (J) Member (T)

Annexure (See para 30)

Illustrative List of cases which may arise in certain situations

--------------------------------------------------------------------------------

Cases of errors /mistakes not covered Sec- Cases of errors /mistakes not covered

tion 27

by Section 27, but which may arise with

reference to other provisions

--------------------------------------------------------------------------------

(1) (2)

--------------------------------------------------------------------------------

(i) Refund of (import) duty; A. (i) In respect of cases in which as-

(ii) Paid pursuant to an order of sessment order has been passed by an

assessment;

(iii) Passed by an officer lower in officer of the rank of Assistant Collec-

rank than Assistant Collector of tor and above under Section 17;

Customs;

(Subject to fulfilment of prescribed (ii) Cases in which (import) duty

conditions) was paid under prior entry system

and ship fails to arrive or the goods

are subsequently found to be short-

shipped and/or short-landed (infor-

mally called as short-landing refunds

in Customs parlance);

(iii) Cases of double payment of duty

on the same goods in certain cir-

cumstances [e.g. case of South India

Corporation reported in 1983 (13)

E.L.T. 1273 (CEGAT1;

(iv) Cases in which an amount which

is paid by mistake in excess of the

amount assessed as duty (import/ex-

port);

(v) Cases in which orders have been

passed under Section 128 or 129DD;

B. (i) Cases falling under Section 28A,

i.e. refund of import or export duty

with reference to a notification issued

in terms of Section 28A;

(ii) Cases falling under Section 28;

(iii) Cases falling under Section 26

(those relating to refund of export

duty in certain cases);

(iv) Cases of under-payment/over-

payment of duty drawback by mis-

take and consequential further

payment/demand;

C. Cases of over-payment/under-

payment of "Sums Other than Duty"

and consequential refund/demand.

(a) FEES of various types under dif-

ferent rules and regulations such as -

(i) Passengers Baggage Levy of

Fees Regulations, 1966;

(ii) Customs Fees for rendering

service by Customs Officers

Regulations, 1968;

(iii) Levy of Fees Customs Docu-

ments Regulations, 1970;

(iv) Levy of Transhipment Fee in

terms of Transhipment (Condition)

Regulations, 1963;

(v) Fees payable in terms of Section

65(i) and regulations thereunder;

(b) CHARGES payable with refer-

ence to Section 65 and Rules and Regula-

tions made thereunder;

(c) INTEREST payable in terms of

Section 61(2);

(d) FINES and/or PENALTIES paid

in respect of

(i) Licensing cases;

(ii) assessment cases;

(iii) others;

(e) Sums or amounts required to be

paid/adjusted in terms of BONDS

under various Sections for various

purposes.

--------------------------------------------------------------------------------