Case Note & Summary
The petitioner, Vina Ahuja, sole proprietor of Venus Designs, filed a writ petition before the Bombay High Court seeking refund of customs drawback amount of Rs. 1,00,00,000/- along with interest. The petitioner had exported goods and claimed drawback under the Customs Act, 1962. The respondent, Commissioner of Customs (Export) Drawback, sanctioned the drawback but withheld payment citing a pending investigation. The petitioner contended that once the drawback is sanctioned, the department is bound to pay it with interest under Section 27A of the Act for the delay. The respondent argued that the claim was barred by limitation under Section 27 and that the petitioner might be unjustly enriched. The court, after hearing both sides, held that the petitioner is entitled to the refund as the drawback was already sanctioned and there was no justification for withholding payment. The court rejected the limitation argument, noting that the respondent's own letters acknowledged the entitlement. The court also rejected the unjust enrichment plea, stating that the petitioner, as exporter, had borne the duty and there was no evidence of passing on the burden. The court directed the respondent to pay the refund amount of Rs. 1,00,00,000/- with interest at 6% per annum from the date of entitlement until payment, within four weeks.
Headnote
A) Customs Law - Refund of Drawback - Section 27, 27A Customs Act, 1962 - Entitlement to Refund with Interest - Petitioner exported goods and claimed drawback, but amount was not paid; later, respondent issued refund but withheld payment citing pending investigation - Court held that once drawback is sanctioned, it must be paid with interest under Section 27A if delayed, and mere pendency of investigation does not justify withholding payment - Held that petitioner is entitled to refund of Rs. 1,00,00,000/- with interest at 6% per annum from the date of entitlement till payment (Paras 1-10). B) Customs Law - Limitation for Refund - Section 27 Customs Act, 1962 - Claim not barred by limitation - Petitioner applied for refund within time, and respondent's own letters acknowledged entitlement - Court held that limitation under Section 27 does not apply when the department itself has sanctioned the refund and only payment is pending (Paras 5-8). C) Customs Law - Unjust Enrichment - Section 27 Customs Act, 1962 - Doctrine not applicable - Petitioner is the exporter who bore the duty burden, and there is no evidence that the duty was passed on to any third party - Court held that unjust enrichment cannot be invoked to deny refund to the exporter who has not recovered the duty from anyone else (Paras 7-9).
Issue of Consideration
Whether the petitioner is entitled to refund of customs drawback amount of Rs. 1,00,00,000/- with interest under Section 27A of the Customs Act, 1962, and whether the claim is barred by limitation or hit by unjust enrichment.
Final Decision
The court allowed the writ petition and directed Respondent No.1 to pay the petitioner the refund amount of Rs. 1,00,00,000/- with interest at 6% per annum from the date of entitlement until payment, within four weeks.
Law Points
- Refund of customs drawback
- interest on delayed refund
- Section 27A Customs Act 1962
- limitation period for refund
- unjust enrichment
- doctrine of unjust enrichment
- Section 27 Customs Act 1962
