2016 (9) TMI 1088 - HC - Customs

Refund claim after adjustment of customs duty - demand of differential duty - mis-declaration of goods - imported paper - Held that - Once the adjudication was completed and the true value determined, it is the differential duty which has to be deposited. That differential duty and no other amount can be recovered from the petitioner or even the deposit made by it. At the same time, since the petitioner has not disputed its Director s liability, the Court is of the opinion that even the amount of ₹ 10 lakhs cannot be claimed at this stage given that a concession to that effect is made in the prayer clause. The respondents directed to process the petitioner s refund and ensure that the excess amount after adjusting the differential duty and further adjusting the penalty of ₹ 10 lakhs, repay/refund the balance within three weeks along with interest as admissible. The respondents shall pass a speaking order in this regard. The bank guarantees furnished by the petitioner pursuant to the Court s order during the pendency of adjudication shall also be discharged. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Refund claim after adjusting customs duty | Mis-declaration in imported paper | Confirmation of differential duty | Imposition of penalty on Director | Appeal pending before CESTAT | Legitimacy of retaining amounts | Adjustment of penalty and refund calculation | Discharge of bank guarantees

Analysis:
The petitioner sought a refund after adjusting customs duty following an Order in Original related to imported paper. A show cause notice was issued for 137 bills of entry, with mis-declaration alleged on 12 bills. The Commissioner confirmed the differential duty and imposed a penalty of ?10 lakhs on the petitioner's Director. The respondents argued for retention of amounts due to pending appeals. However, the Court found that the differential duty, considering TR-6 challans, should not exceed ?9 lakhs. The Court also noted the petitioner's willingness to adjust the penalty and requested a refund. The Court emphasized that only the differential duty should be recovered, not additional amounts. The respondents were directed to process the refund, adjusting the differential duty and penalty, and repay the balance with interest within three weeks, discharging bank guarantees as well.

In conclusion, the Court allowed the writ petition, directing the respondents to calculate the refund amount accurately, considering TR-6 challans and penalty adjustments, and ensure timely repayment to the petitioner. The judgment focused on the legitimate recovery of differential duty, the concession made by the petitioner regarding the penalty, and the importance of following due process for refund processing.