2013 (6) TMI 245 - HC - Customs

Refund of amount recovered during search and seizure - Detention of containers lying at ICD - held that - applying the principles enunciated by the Hon ble Apex Court in Godavari Sugar Mills Limited s case (2003 (12) TMI 584 - SUPREME COURT OF INDIA), it could not be said that writ petition was not maintainable. It is trite law that unless a demand, which is finalized and is existing which is liable to be discharged, the revenue cannot retain any amount unless there exists specific provision in the statute for the retention of the amount. Revenue directed to retain an amount of ₹ 2 Crores to safeguard its interest for being adjusted against any liability that might be created on the basis of investigations and/or show cause notice issued to the petitioners and return the balance amount of ₹ 8 Crores within a period of two weeks from the date of receipt of certified copy of the order. - Partly decided in favor of assessee.

Issues Involved:
1. Quashing of Panchnama and permission for export.
2. Return of Rs.10 Crores allegedly recovered under coercion.
3. Return of Managing Director's passport and company records.
4. Prevention of coercive action against company directors.
5. Request for CBI enquiry.
6. Exemption from filing certified copies of annexures.

Detailed Analysis:

1. Quashing of Panchnama and Permission for Export:
The petitioners sought a writ of certiorari to quash the Panchnama dated 30.04.2012 and 01.05.2012, which led to the detention of two containers at the Inland Container Depot, New Delhi, and requested permission for their export. However, this relief was rendered infructuous due to various interim orders passed by the court during the pendency of the writ petition.

2. Return of Rs.10 Crores Allegedly Recovered Under Coercion:
The petitioners argued that Rs.10 Crores was forcibly obtained by the Directorate of Revenue Intelligence (DRI) on 26th April 2012 without any existing liability. They cited precedents such as Bhagwati International vs. Union of India and M/s Century Metal Recycling Pvt. Ltd. vs. Union of India, which emphasize that money deposited under coercion should be returned if no demand is finalized against the petitioners.

The respondents contended that the petitioners voluntarily deposited the amount and cited the Constitution Bench Judgment in Suganmal vs. State of M.P. to argue that the writ petition was not competent. They also claimed that the amount should be retained to safeguard revenue interests, with potential liabilities amounting to Rs.60 Crores or more.

The court, referencing Godavari Sugar Mills Limited vs. State of Maharashtra, clarified that a writ petition for refund could be entertained under Article 226 in appropriate cases. The court found no crystallized liability against the petitioners and directed the revenue to retain Rs.2 Crores while returning Rs.8 Crores within two weeks.

3. Return of Managing Director's Passport and Company Records:
The petitioners requested the return of the Managing Director's passport and company records. This relief was rendered infructuous due to interim orders passed during the pendency of the writ petition.

4. Prevention of Coercive Action Against Company Directors:
The petitioners sought to prevent coercive action against the company directors during the investigation. This relief was also rendered infructuous due to interim orders passed during the pendency of the writ petition.

5. Request for CBI Enquiry:
The petitioners requested a CBI enquiry into the incidents. This relief was rendered infructuous due to interim orders passed during the pendency of the writ petition.

6. Exemption from Filing Certified Copies of Annexures:
The petitioners sought exemption from filing certified copies of annexures, allowing them to file photocopies or computer printouts. This relief was rendered infructuous due to interim orders passed during the pendency of the writ petition.

Conclusion:
The court directed the revenue to retain Rs.2 Crores to safeguard its interest and return the balance amount of Rs.8 Crores within two weeks. The petitioners were also instructed not to create any encumbrance or alienate the specified plot until 31st March 2014 or until the finalization of proceedings, whichever is earlier. The petitioners were required to cooperate in the investigations and the decision of the show cause notice. The court emphasized the need for the revenue to complete investigations and finalize proceedings by 31st March 2014. The review petition was rendered infructuous and disposed of accordingly.

← Previous Next →