2024 (9) TMI 572 - HC - Customs

Refund of amount deposited the course of investigation, consequent to the closure of proceedings initiated under the Customs Act, 1962 - HELD THAT - Undisputedly, the amounts in question were deposited in the course of investigation and pending adjudication. The adjudicatory process has ultimately ended in favour of the assessee. In view of the above, there are no legal justification in the respondents continuing to retain the amounts which were deposited under protest by the writ petitioners and during the course of investigation. The respondents are directed to refund the amounts of INR 1,50,00,000/- forthwith. The aforesaid refund shall be accompanied with statutory interest as payable under the Act till the date of actual disbursement - petition allowed.

Summary

Issues Involved:
1. Refund of amounts deposited during the course of investigation under the Customs Act, 1962.
2. Entitlement to statutory interest on the refunded amounts.
3. Request for permission to amend shipping bills and allow export of goods, and the grant of detention certificate.

Issue-wise Detailed Analysis:

1. Refund of Amounts Deposited During Investigation:
The writ petitions sought directions to release INR 1,50,00,000/- to the petitioners following the closure of proceedings under the Customs Act, 1962, as per Orders-in-Original dated 22 June 2020 and 28 August 2020. The petitioners argued that the deposits were made during investigations initiated after the seizure of goods on 06 February 2015. Despite the closure of proceedings in favor of the petitioners, the respondents failed to refund the deposited amounts. The court noted that the proceedings had indeed concluded in favor of the petitioners and found no legal justification for the respondents to retain the amounts deposited under protest during the investigation. The court emphasized that deposits made under protest and during investigations do not partake the character of tax or duty.

2. Entitlement to Statutory Interest:
The court referenced the decision in Commissioner of Customs (I & G) V. Ericsson India Private Limited, which supported the view that amounts deposited under protest should be refunded along with interest. The court also cited Team HR Services Pvt. Ltd. V. Union of India, where it was observed that the state cannot retain amounts unless assessed and found due as tax liability. The court reminded the respondents of Article 265 of the Constitution of India, which prohibits the collection of tax without the authority of law, and Section 72 of the Contract Act, 1872, which obliges repayment of money paid by mistake or under coercion. Consequently, the court directed the respondents to refund the amounts with statutory interest as payable under the Act until the date of actual disbursement.

3. Request for Permission to Amend Shipping Bills and Allow Export of Goods, and Grant of Detention Certificate:
The petitioners also requested permission to amend shipping bills, allow the export of goods, and grant a detention certificate. The court left these issues open to be independently pursued by the petitioners. All rights and contentions of the respective parties regarding this request were kept open.

Conclusion:
The court allowed the writ petitions, directing the respondents to refund INR 1,50,00,000/- to the petitioners with statutory interest. The issues regarding the amendment of shipping bills, export of goods, and grant of detention certificate were left open for independent pursuit.