2017 (11) TMI 261 - HC - Customs

Refund claim - excess customs duty paid under protest - interest on delayed refunds - unjust enrichment - In compliance with the directions of this Court to show cause as to why contempt action should not be initiated against the respondent official for apparently not complying with the judgment of the Hon ble Supreme Court in the case of SRF LIMITED Vs COMMISSIONER OF CUSTOMS 2015 (4) TMI 561 - SUPREME COURT . Held that - this Court is not inclined to take a lenient and casual approach in the matter, as the respondent officials cannot be allowed to go around and bypass the binding precedent of the Hon ble Supreme Court in such matters and since the amount in question was paid by the petitioner clearly under protest , from their own resources awaiting the decision of the Hon ble Supreme Court at that point of time, there was no question of allowing any further enquiry at the end of said Deputy Commissioner and refuse the refund on that ground. The amount actually was refunded after the order dated 14.12.2016 was passed by the respondent Deputy Commissioner, Mr. Ravindra Joshi but the tenor of the said order as well as the Affidavit filed in respect of the contempt notices issued by this Court, do not fully satisfy and in inspire any confidence that the respondents, in letter and spirit abide by the judgment of the Hon ble Supreme Court and still seek a refuge from this Court to keep open for them to hold an enquiry in the matter, which cannot be permitted. In view of the refund actually made now to the petitioner upon the considered order passed by the respondent himself holding the petitioner company entitled to the refund and refund having been made, no further enquiry in the matter at the end of Deputy Commissioner is justified - decided in favor of petitioner.

Issues Involved:
1. Quashing of the Impugned Order-in-Original.
2. Direction for the respondents to decide the claims on merits.
3. Restraining respondents from acting on the impugned orders.
4. Refund of excess customs duty.
5. Contempt of court proceedings.
6. Payment of interest on delayed refunds.
7. Costs and damages for unnecessary litigation.

Issue-wise Analysis:

1. Quashing of the Impugned Order-in-Original:
The petitioner sought a writ of certiorari to quash the Impugned Order-in-Original dated 31.5.2016, which rejected their refund applications. The court found that the respondent-Department should have taken suo-motu action to refund the duty after the Supreme Court dismissed the review petition on 15.07.2016. The court noted that withholding the refund was unjustified, especially since the facts were covered by the Supreme Court's decision in SRF Limited vs. Commissioner of Customs, Chennai.

2. Direction for the Respondents to Decide the Claims on Merits:
The petitioner requested a writ of mandamus to direct the respondents to decide their claims on merits. The court highlighted that the respondent-Department's refusal to refund, despite clear Supreme Court directives, was inappropriate. The court ordered the respondents to show cause for their inaction and to consider the petitioner's claims without requiring court intervention.

3. Restraining Respondents from Acting on the Impugned Orders:
The petitioner sought a writ of prohibition to restrain the respondents from acting on the impugned orders. The court's interim orders emphasized that the respondents should not take any action that contradicts the Supreme Court's judgment and directed them to refund the amounts due to the petitioner.

4. Refund of Excess Customs Duty:
The court criticized the respondent-Deputy Commissioner (Refunds) for refusing to refund the excess customs duty, citing Section 28-D of the Customs Act, which was inapplicable in this case. The court deemed this refusal as contempt of both its order and the Supreme Court's judgment. Subsequently, the Deputy Commissioner passed an order on 14.12.2016, sanctioning the refund, which was credited to the petitioner's bank account on 16.12.2016.

5. Contempt of Court Proceedings:
The court initiated contempt proceedings against the respondent officials for not complying with the Supreme Court's judgment. The Deputy Commissioner and Chief Commissioner of Customs filed affidavits offering unconditional apologies and explaining their actions. Despite the refunds being made, the court expressed dissatisfaction with the officials' conduct and noted their attempts to circumvent the Supreme Court's binding precedent.

6. Payment of Interest on Delayed Refunds:
The court noted that the interest on the delayed refund had not been paid to the petitioner, as required under Section 27A of the Customs Act. The court directed the Deputy Commissioner to determine and pay the interest within one month and submit a compliance report.

7. Costs and Damages for Unnecessary Litigation:
The court ordered the respondent-Deputy Commissioner to forfeit the litigation costs of ?59,800/- and pay an additional ?1 lakh as damages to the petitioner for their unnecessary and casual approach. The court emphasized that the respondent officials must adhere to binding precedents and perform their duties diligently.

Conclusion:
The court disposed of the petition with several directives, including the payment of costs and interest, and a note of caution to the respondent officials to respect binding judicial precedents. The court refrained from punishing the respondents under contempt law, considering the refund had been made, but stressed the importance of their future compliance with court orders.

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