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2018 (11) TMI 688 - HC - CustomsRecovery of certain amount from petitioner without any SCN or any demand - case of respondents is that the petitioner has paid his amount voluntarily - Held that - In Century Metal Recycling Pvt. Ltd 2008 (10) TMI 96 - PUNJAB AND HARYANA HIGH COURT it was held that unless there is assessment and demand, the amount deposited by the petitioners cannot be appropriated. Another fact which deserves to be noticed is that show cause notice was issued to the petitioner on 24.04.2017 and more than one year has already been elapsed but no order has been passed. Even if demand is confirmed against the petitioner, for hearing of appeal upto the CESTAT, only 10% of the amount is to be deposited, whereas the proceedings in the present case have not been concluded yet - after retaining the amount of ₹ 6,00,000/-, balance amount deposited by the petitioner be refunded to him within a period of four weeks from the date of receipt of copy of the order. Petition disposed off.
Issues Involved:
1. Unlawful demand of ?40,00,000 by Directorate of Revenue Intelligence (DRI) during goods import. 2. Violation of Article 265 of the Constitution of India due to payment without show cause notice. 3. Comparison with previous judgments regarding refund of unlawfully recovered amounts. 4. Dispute over voluntary payment of the amount by the petitioner. 5. Pending proceedings despite the issuance of a show cause notice in April 2017. 6. Legal provisions for retention of amounts by revenue authorities. Analysis: 1. The petitioner raised the issue of an unlawful demand of ?40,00,000 by the DRI during the import of goods, despite already paying the leviable duty. The petitioner alleged that the payment was made under pressure to avoid clearance delays and demurrage charges at the port. This action was contested as a violation of Article 265 of the Constitution of India, which prohibits the collection of any tax or duty without the authority of law. 2. The petitioner's counsel referred to previous Division Bench judgments and a Delhi High Court judgment where refunds were ordered for amounts recovered without proper assessment or demand. The court noted that unless there is a finalized assessment and demand, the revenue authorities cannot retain any amount deposited, even if claimed to be voluntary. The court emphasized that any retention without a specific statutory provision would violate Article 265 of the Constitution. 3. The respondents argued that the amount was voluntarily paid by the petitioner due to a violation of import laws, as duty was paid based on transaction value instead of the maximum retail price. They claimed that a show cause notice had been issued in April 2017, but proceedings were still pending. However, the court reiterated that voluntary payment does not justify retention without a finalized demand and assessment. 4. The court compared the current case with previous judgments where refunds were ordered for amounts recovered without proper legal basis. It emphasized that unless a demand is finalized and existing, the revenue authorities cannot retain any amount, as it would violate constitutional provisions. The court highlighted that the pending proceedings and the appeal process allowed for a deposit of only 10% of the duty amount, indicating that the current retention of the full amount was unjustified. 5. Despite the issuance of a show cause notice in April 2017, no order had been passed even after more than a year. The court noted that the proceedings had not been concluded, and the petitioner was entitled to a refund of the unlawfully retained amount. The court ordered the refund of the balance amount deposited by the petitioner, retaining only a nominal sum, within four weeks from the date of the order. 6. The court emphasized that the revenue authorities cannot retain any amount without a finalized demand and existing liability. It highlighted the lack of specific statutory provisions authorizing such retention and reiterated that any retention without legal basis would contravene Article 265 of the Constitution. The judgment concluded by directing the refund of the unlawfully retained amount to the petitioner within a specified timeframe.
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