2012 (8) TMI 176 - HC - Customs

Frivolous review petition - Review of the order wherein revenue directed to refund the excess fine and penalty consequent to the appellate order to the petitioner within 10 days from the date of the judgment - held that - the stand of the petitioner in the review petition is totally hyper-technical and unreasonable. When an appellate authority allows an appeal filed against imposition of tax, duty, fine, penalty etc., it is the bounden duty of the assessing authority, as part of a democratic government, to refund the amounts covered by orders of the appellate authority, when appeals are allowed fully or partially. The same shall be refunded even without a formal request for the same. The reasons put forward by the petitioner in the review petition justifying the insistence on the production of original documents also does not impress me at all. When an import is assessed to duty and penalty and fine are imposed, necessarily, the assessing authority maintains a file in relation to the same, which will contain all the documents in original relating to the levy. When payment is made pursuant to the orders of the assessing authority, details of the same would also be available in that file. When appeal is filed by the importer against the orders of the assessing authority the file will contain orders and details relating to the same also. Therefore, there is no difficulty for the assessing officers to decide the claim for refund based on those documents, when the appeal is allowed in full or in part. The filing of this review petition itself is an abuse of the process of the court. - Review petition dismissed with cost of Rs. 25000/- Interest and cost to be recovered from the petitioner in the review petition and all officers responsible.

Summary

Issues Involved:
1. Refund of excess fine and penalty.
2. Requirement of original documents for refund.
3. Legality of the insistence on the production of documents for refund.
4. Applicability of Exts. P3 and P7 circulars.
5. Imposition of interest and costs for delay in refund.

Detailed Analysis:

1. Refund of Excess Fine and Penalty:
The petitioner sought a refund of Rs. 6,62,275/- due to a reduction in fine and penalty by an appellate order. The court initially directed the respondent to refund the excess amount within ten days. The review petition acknowledged the liability to refund but contested the conditions under which the refund should be made.

2. Requirement of Original Documents for Refund:
The review petitioner argued that the refund should be contingent upon the production of original documents such as the importer's copy of the bill of entry and the duty paid TR6 challan. The court noted that although the initial undertaking did not specify this requirement, it accepted the standing counsel's assertion that this was the intended condition.

3. Legality of the Insistence on the Production of Documents for Refund:
The court examined whether the production of original documents was legally necessary for processing the refund. The petitioner in the review petition argued that such documents were essential to verify the claimant's identity, prevent duplicate claims, and ensure proper record-keeping. However, the court found these contentions to be hyper-technical and unreasonable, emphasizing that the assessing authority should have sufficient records to process refunds without requiring additional documents from the claimant.

4. Applicability of Exts. P3 and P7 Circulars:
The petitioner in the writ petition cited Exts. P3 and P7 circulars, which state that for refunds of pre-deposits made during the pendency of an appeal, a simple letter and an attested copy of the TR6 challan suffice. The review petitioner contended that these circulars did not apply to fines and penalties. The court rejected this argument, clarifying that Section 129E of the Customs Act covers pre-deposits of duty, interest, and penalties, and thus the circulars are applicable.

5. Imposition of Interest and Costs for Delay in Refund:
The court criticized the review petition as an abuse of process, noting that the petitioner in the writ petition had complied with the necessary requirements for a refund. The court directed that the refund should carry interest at 6% per annum from the date of the appellate order until payment. Additionally, the court imposed exemplary costs of Rs. 25,000/- on the petitioner in the review petition for causing unnecessary harassment and wasting the court's time. The interest and costs were to be recovered from the responsible officers, not debited to the exchequer.

Conclusion:
The court dismissed the review petition, reinforcing that the refund of excess fine and penalty should be made promptly without undue insistence on original documents, as long as sufficient evidence is provided. The court emphasized the duty of government authorities to act fairly and promptly in processing refunds and imposed penalties for unnecessary delays and frivolous litigation.