Case Note & Summary
The petitioner, a company manufacturing PVC/CPVC pipes, imported 100 metric tons of Polyvinyl Chloride Resin SG-5 Erdos. It filed Bill of Entry No. 8441729 on 27 April 2022 and paid customs duty of Rs. 35,37,358/-. The goods arrived at Mumbai Port on 10 May 2022, but could not be traced thereafter. Joint surveys by the petitioner and port authority on 8 June 2022 and 24 August 2022 confirmed the goods were missing. A Short Landing Certificate was issued on 25 April 2023. The petitioner filed a refund claim on 24 September 2022, but the Assistant Commissioner of Customs (Refund), Respondent No. 1, rejected it on 28 December 2022, citing absence of a closure letter for the Bill of Entry. Grievances filed by the petitioner were also rejected. The petitioner then filed the present writ petition seeking refund of the customs duty along with interest under Sections 13, 23 and 27A of the Customs Act, 1962.
The petitioner argued that since the goods were never received, the duty paid is without authority of law and must be refunded. Sections 13 and 23 mandate refund/remission in cases of pilferage or loss before clearance. The requirement of a closure letter is arbitrary because the customs authority alone can issue it. The respondent customs authority contended that the Bill of Entry could not be closed due to pending NOC from Delhi Customs and a dispute over the Import General Manifest amendment. The port authority argued that the goods were short landed, while the shipping line claimed full discharge. The dispute between the two public authorities left the importer without goods or refund for nearly three years.
The matter was heard on 12 November 2025 and judgment was pronounced on 19 November 2025. The court observed that the importer was an innocent party caught between two public authorities and that such administrative inaction and inter-departmental discord necessitate judicial intervention. The detailed analysis, ratio, and final order are not included in the provided text excerpt.
Issue of Consideration
Whether the importer is entitled to refund of customs duty paid on imported goods that were never received due to disappearance in the custody of the port authority, and whether the customs authority can reject the refund claim for want of a closure letter that it alone can issue.
Law Points
- Customs duty paid without authority of law must be refunded
- state cannot retain money not belonging to it
- Section 13 and Section 23 of the Customs Act
- 1962 provide for remission/refund of duty on pilfered/lost goods
- inter-departmental dispute between customs and port authority cannot delay refund to importer
- closure letter of bill of entry cannot be a precondition when its issuance is within the authority's own control
- interest is payable on refund from date of payment.
Case Details
2025 LawText (BOM) (11) 175
Writ Petition No. 11118 of 2025
M.S. Sonak, Advait M. Sethna
Mr. Rajiv Jaipal i/b Mr. Sunil (for Petitioner); Mr. J.B. Mishra a/w Mr. Abhishek Mishra a/w Mr. Rupesh Dubey (for Respondent No.1); Mr. Mohammed Oomar Shaikh i/b M.V. Kini & Co. (for Respondent No.2)
M/s. Ajay Industrial Corporation Ltd.
Assistant Commissioner of Customs (Refund) and Mumbai Port Authority
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Nature of Litigation
Writ Petition seeking refund of customs duty paid on imported goods that were never delivered.
Remedy Sought
Petitioner sought a writ of mandamus directing Respondent No.1 to refund Rs. 35,37,358/- customs duty with interest.
Filing Reason
Imported goods went missing while in custody of the port authority; customs authority rejected refund claim for want of a closure letter of the Bill of Entry.
Previous Decisions
Refund claim rejected by Respondent No.1 on 28 December 2022; grievance through CPGRAMS rejected on 16 December 2023; representation dated 6 March 2024 not acted upon.
Issues
Whether the importer is entitled to refund of customs duty under Sections 13, 23 of the Customs Act when imported goods were never received due to disappearance in the custody of port authority?
Whether Customs Authority can demand a closure letter of the Bill of Entry as precondition for refund when the closure letter is to be issued by the Customs Authority itself?
Whether the inter-departmental dispute between the Customs and the Port Authority relieves either of them from liability to refund the customs duty to the importer?
Submissions/Arguments
Petitioner: Statutory right to refund under Sections 13 and 23; goods never received; amount is deposit without legal demand; Customs authority cannot take advantage of its own wrong.
Respondent No. 1: Refund claim deficient; Bill of Entry not closed due to pending NOC and IGM amendment; Short Landing Certificate contradicted by Shipping Line's statement.
Judgment Excerpts
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 present Petition, therefore, exemplifies a situation in which an innocent importer has suffered and continues to suffer due to administrative inaction and inter-departmental discord.
Procedural History
Bill of Entry No. 8441729 filed on 27 April 2022, customs duty paid. Goods arrived at Mumbai Port on 10 May 2022 but not traceable. Joint surveys in June-August 2022 confirmed goods missing. FIR registered on 23 September 2022. Refund application filed on 24 September 2022, rejected by Respondent No.1 on 28 December 2022. Grievance lodged on 25 November 2023, rejected on 16 December 2023. Representation made on 6 March 2024, not acted upon. Writ petition filed; matter heard on 12 November 2025, judgment pronounced on 19 November 2025.
Acts & Sections
- Customs Act, 1962: 13, 23, 27A
