Summary: In a recent judgment, M/S Ajay Industrial Corporation Ltd. was granted a refund of customs duty after their imported goods went missing. The court ordered the Assistant Commissioner of Customs to refund ₹35,37,358 with interest.
Ajay Industrial Corporation Ltd., a company dealing in PVC pipes, found themselves in a tough spot when their imported goods vanished. They had paid customs duty of ₹35,37,358 for goods that never arrived. Despite following all procedures, they faced a bureaucratic deadlock between the Customs Department and the Mumbai Port Authority.
The Customs Department and the Port Authority couldn't agree on who was responsible. Customs claimed the goods were stolen after landing, while the Port Authority said they never arrived. This left Ajay Industrial Corp stuck in the middle, unable to get their refund.
"Ajay Industrial Corporation Ltd. is the only sufferer in this dispute between two public authorities." - Court Observation
Several surveys were conducted to trace the missing goods. Reports confirmed the goods were untraceable, and a Short Landing Certificate was issued. Despite this, the Customs Department demanded a closure letter before processing the refund, which was impossible due to the ongoing dispute.
Ajay Industrial Corp argued that they were entitled to a refund under certain sections of the Customs Act, as the goods were never delivered. The Customs Department’s insistence on procedural technicalities was deemed unreasonable by the court.
The court ruled in favor of Ajay Industrial Corp, stating they were entitled to a refund along with 9% interest. The judgment emphasized that the company should not suffer due to internal disputes between the Customs Department and the Port Authority.
"The refund of such duty is a statutory entitlement, not a discretionary relief." - Court Judgment
The court decided that Ajay Industrial Corp should get their customs duty back with interest because the goods they paid for never showed up. The Customs Department was told to give back the money within four weeks.
This case serves as a reminder of the complexities and challenges businesses face in navigating import regulations and the importance of judicial intervention in resolving administrative disputes.
