Cus - When facts are gross, to ensure refund of amount years later without interest would be doing injustice: HC
By TIOL News Service
AHMEDABAD , NOV 24, 2017: THE petitioners were in the process of exporting "Basmati" rice. The Department had disputed about the description of the goods and, therefore, did not permit export.
Eventually, the adjudicating authority by an order dated 25.05.2012 , confiscated the goods, but offered redemption fine of Rs.10 lakhs and also imposed penalties of Rs.10 lakhs each on the company as well as on the Director.
The petitioners challenged this order of the Commissioner before the Tribunal.
In the meantime, the petitioners deposited the sums of Rs.10 lakhs of redemption fine and provided for Bank Guarantees of Rs.10 lakhs each to cover penalty component.
The Tribunal by a judgment dated 19.02.2013 , allowed the appeal and reversed the order of the adjudicating authority. Inasmuch as order of confiscation of goods, imposition of redemption fine and penalties were set aside.
The petitioners, therefore, wrote to the Department on 01.04.2013 and requested the Department to release the sums deposited. Reminders were sent on 12.12.2013 and on 13.02.2016.
The petitioners received no response to any of these letters, upon which the present petition came to be filed on 23.04.2016 .
Eventually, the Department refunded the sum of Rs.10 lakhs (paid as redemption fine) on 18.07.2016 but did not provide for any interest thereon.So also, Bank Guarantees were released on 29.08.2016 .
The High Court noted that the petitioner was now pressing for interest on both the sums.
The counsel for the Department opposed the petition contending that there is no provision contained in the Customs Act, 1962 for granting interest under such circumstances. And, furthermore, the Department had preferred appeals before the High Court against the judgment of the Tribunal and which are still pending.
The High Court observed -
++ As per the settled law, it may be open for the Department to challenge the said judgment before the higher Court, but cannot avoid implementation of the Tribunal's order for an indefinite period without stay being granted by the Higher Court. In the present case, as on date, admittedly, no stay has been granted.
++ Within a reasonable time after the judgment of the Tribunal, therefore, the Department was expected in law to implement the directions, which would result into refund of sum of Rs.10 lakhs deposited by the petitioners and releasing of Bank Guarantees. Though the petitioners reminded the Department on numerous occasions, this was not done for over three years.
++ The Department must pay interest on the sum of Rs.10 lakhs deposited by the petitioners to the extent of delay in refunding the same. On the Bank Guarantees, we do not see any case for granting interest since the petitioners were not made to deposit the same with the Department.
++ Merely because the Customs Act, 1962 does not make any provision for granting interest under such eventuality, would not mean that the Court, in exercise of writ jurisdiction, cannot direct the Department to pay the same. When the facts are gross, to ensure refund of the amount years later without interest would be doing injustice.
Conclusion:
+ Respondent directed to pay interest at the rate of 8% per annum upon completion of period of three months from the date of judgment of the Tribunal till actual payment of refund.
+ There shall be no interest on the Bank Guarantee component.
+ Exercise to be carried out latest by 31.12.2017.
(See 2017-TIOL-2452-HC-AHM-CUS )
