By TIOL News Service

NEW DELHI, FEB 07, 2014: THE petitioner imported a consignment of Palm Fatty Acid Distillate from Malaysia and Sri Lanka and landed them at ICD, Tughlakabad . Alleging undervaluation, the DRI conducted raids at the petitioner's factory and premises on 21.11.2006 and drew samples.

Provisional release of the goods was sought by the petitioner and in the meantime they had deposited a total amount of Rs.47,14,188/- through demand drafts on 12.11.2007.

Suffice to say that a SCN was issued demanding duty of Rs.73,92,399/- and this was confirmed by the adjudicating authority.

The CESTAT held in the appellant's favour on 06.07.2011 holding that there was no evidence to show that the importer/petitioner had undervalued the goods.

A claim was filed seeking refund of the amounts deposited. On 15.2.2013 and subsequent dates, reminders were given to the authorities to deal with the claim. Eventually, the refund claim was rejected on 17.10.2013 on the ground that the refund claim was made after expiry of one year from the date of the CESTAT's final order.

The petitioner is, therefore, before the High Court and submits that the customs authorities have acted contrary to law in rejecting the refund application; that once the Tribunal decided that the demands made were without authority and this order had become final, the amounts deposited had to be necessarily refunded in view of the Board Circular 802/35/2004-CX dated 8 th December, 2004 which categorically states that in terms of the Supreme Court's order in ITC case [2004-TIOL-112-SC-CX-LB] whenever the CESTAT or a final authority makes an order which requires return of pre-deposits or refunds, the same should be complied within three months from the date of the order unless there is a stay. The petitioner also sought release of the bank guarantee furnished.

The High Court inter alia observed and held -

+ In the present case, the department's responsibility of ensuring refund in accordance with the Circular of 8.12.2004 existed and the said refund had to be made within three months of the date of the order, i.e., 6th July, 2011. The department did not do so, compelling the petitioner to approach it for refund on 11.8.2012.

+ Even if the arguments of limitation were to be accepted, the department could not have summarily rejected the application having regard to the duty cast upon it to ensure refund within three months.

+ The claim of an individual, whose amounts are retained without authority of law, to seek refund or restitution cannot be rejected merely on the application of Section 27. Article 265 of the Constitution of India clearly applies in the circumstances of the case.

+ The respondents are directed to ensure that the amount which has to be refunded to the petitioner, i.e., Rs.47,14,188/- is paid back to it within four weeks with interest @ 10% per annum reckonable from 1.11.2011.

+ The respondents are also directed to return the documents taken into custody by them in the course of the proceedings against the petitioner within the said period.

The Writ Petition was allowed in the above terms.

(See 2014-TIOL-162-HC-DEL-CUS)