9911796707
TMI Blog2024 (11) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... fault of payment of duty within the time specified under Section 28. There cannot be any question of interest being demanded in the Order-in-Original. We cannot accept the learned senior counsel's submission that the petitioner is not liable to pay interest u/s 28AA when there is a default or delay in payment of duty. The learned senior counsel also fairly accepts that the interest is automatic, but only the contention that there must be a demand in the order, which, in our opinion, is not correct. Respondents raised the demand calling upon the petitioner to pay for the demand so raised. However, since the payment was not made within the time specified in the said demand notice, an order of attachment dated 18th January 2013 was passed for failure to make the payment demanded on 18th October 2012 and interest payable under Section 28AA for the period commencing after that date, i.e. after 18th October 2012 was demanded. In our view, the demand for interest was raised on 18th January 2013 for non-payment of demand made on 18th October 2012, which is within three months of raising the demand. Therefore, the petitioner's contention that the demand of interest has been made aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of mandamus or any other writ, order or direction of like nature, directing the Respondents to refund the excess proceeds from the auction of the seized diamonds, over and above the dues adjudicated and confirmed in terms of the Order of the Hon'ble Supreme Court dated 18.03.2013 (Exhibit-H) to the Petitioner; (v) this Hon'ble Court be pleased to issue a writ, order or directions in the nature of mandamus or any other writ, order or direction of like nature, directing the Respondents to issue NOC to SEEPZ SEZ that customs have no objection in Petitioners carrying out their business/ exports from their factory premises; 5. Mr Chinoy learned senior advocate for the petitioner, referred to the order dated 18 March 2013 made by the Hon ble Supreme Court against CESTAT s final order dated 21 December 2006 confirming demands and penalties against the petitioner. He submitted that though the petitioner s Civil Appeal was dismissed, the Hon ble Supreme Court granted the petitioner time up to 22 August 2013 to pay the demanded amounts under the CESTAT s impugned order up to 22 August 2013 through instalments. He submitted that the petitioner duly made payments in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable directions must be issued to the respondents to de-seal and release the petitioner's factory premises. 9. Ms Thakker, learned counsel for the respondents, submitted that the petitioner breached the directions in clause (4) of the Hon ble Supreme Court s order dated 18 March 2013 because, by 22 August 2013, the entire liability under the CESTAT s final order dated 21 December 2006 was not cleared. She, therefore, submitted that under clause (5) of the Hon ble Supreme Court's order, the respondents were given the liberty to recover outstanding dues from the petitioner forthwith in accordance with the law, including an auction of the factory premises. She, therefore, submitted that the entire substratum of this petition collapses, and this petition may be dismissed. 10. Ms Thakkar submitted that the respondents had not breached the Hon ble Supreme Court's order dated 18 March 2013, and therefore, the allegations of contempt or willful disobedience are misconceived. She submitted that similar allegations were made in an Interim Application before the Hon ble Supreme Court, but the same was withdrawn without seeking any liberty to re-agitate this issue. She submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions to which such exemption was subject. 16. The respondents issued a show cause notice dated 05 June 2000 to the petitioner and B V Star (another firm having the same partners) under Sections 28 and 124 of the Customs Act alleging a shortage of stock of diamonds imported after taking into account the exports effected, resulting evasion in customs duty to substantial extent. The respondents seized diamonds and capital goods on the grounds that they were liable for confiscation. The show cause notice required the petitioner to show cause as to why the evaded customs duty and penalty be not recovered and the diamonds and other capital goods confiscated. After giving the petitioner full opportunity, the show cause notice dated 05 June 2000 was adjudicated vide order in original dated 13 June 2001, wherein the demands in the show cause notice were confirmed. 17. The petitioner challenged the order in original dated 13 June 2001 by instituting an appeal before the CESTAT. This appeal was allowed by order dated 14 February 2003, and the CESTAT set aside the order in original dated 13 June 2001. The respondents appealed against the CESTAT s order dated 14 February 2003 before the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The first instalment shall be of Rs. 5 Crores which shall be paid by the appellant on or before March 22, 2013. The remaining liability shall be discharged in five equal monthly instalments payable on or before 22nd of each successive month. The last of such instalments (sixth instalment) shall be paid on or before August 22, 2013. 5. In case of default in payment of any one of the instalments, the respondent shall be free to recover the outstanding dues from the appellant forthwith in accordance with law including auction of the factory premises. 6. Needless to say that any amount already paid by the appellant shall be adjusted against the outstanding demand. It is also observed that in case an application is made by the appellant for disposal of the seized diamonds, the same shall be disposed of in accordance with law and the proceeds thereof shall be adjusted against the outstanding dues. 7. Subject to the deposit of each instalment as directed above, auction of the factory premises shall remain stayed. Upon discharge of the entire liability by the appellant as permitted above, the factory premises shall be released to the appellant. 21. The petitioner is claiming to have comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nders were not desealing and releasing the factory premises. 26. By order dated 30 January 2017, the Hon ble Supreme Court dismissed Interim Application No. 3 of 2016 in Civil Appeal No. 2644 of 2003 as withdrawn in terms of the signed order . Though the signed order was never shown to us, it is apparent that the Interim Application No. 3 of 2016, in which the petitioner had asserted having made payments in terms of the Hon ble Supreme Court's order dated 18 March 2013 or in which the petitioner had alleged contempt against the respondents, was unconditionally withdrawn or withdrawn without any liberty to take out any further proceedings on such issue. The copy of the order dated 31 January 2017 is in Exhibit FF on page 842 of the petition paper book. 27. After about a year, the petitioner filed Writ Petition (C) No. 130 of 2018 before the Hon ble Supreme Court again, asserting compliance with the payments under the Hon ble Supreme Court's order dated 18 March 2013 and challenging the respondents' alleged failure to de-seal and release the petitioner's factory premises despite such compliance. The petitioner, in fact, sought a Writ of Mandamus to direct the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fine and applicable interest in terms of Section 28 AA of the Customs Act remained unpaid. Ms Thakkar also referred to the communication dated 25 July 2024 (on page 952 of the paper book), which records that, according to the Hon ble Supreme Court's order dated 18 March 2013, the petitioner was supposed to pay the entire dues of Rs. 24.63 Crores (approx.) in six instalments up to 22 August 2013. However, the petitioner paid only Rs. 17.7 Crores (approx.) by 22 August 2013. 32. All this, at least prima facie, indicates that the petitioner s principal contention of having cleared the entire liability under the CESTAT s impugned order dated 21 December 2006 by 22 August 2013 is incorrect, even if the interest aspect is not considered. There is no ambiguity in clause (4) of the Hon ble Supreme Court's order dated 18 March 2013, by which the petitioner was indulged with the facility of paying the demanded amount of Rs. 24.63 Crores (approx.) in six instalments, the last of which was payable on 22 August 2013. 33. Clause (5) of the Hon ble Supreme Court's order dated 18 March 2013 provides that in case of default in payment of any one of the instalments, the respondent shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premise that it is vulnerable. Apart from the fact that the petitioner has not established payments in terms of clause (4) of the Hon ble Supreme Court's order dated 18 March 2013, the petitioner cannot presume that the interest demand is vulnerable on the alleged ground that the same is belated or not made within a reasonable period. The demand for interest in such matters is statutory. The decisions the petitioner and the respondents relied upon referred to the automatic liability to pay interest. 39. Section 18 (3) of the Customs Act provides that the importer or exporter shall be liable to pay interest on any amount payable to the Central Government, consequent to the final assessment order or re-assessment order under sub-section (2), at the rate fixed by the Central Government under Section 28AA from the first day of the month in which the duty is provisionally assessed in the date of payment thereof. Section 28AA of the Customs Act makes provisions for interest on the delayed payment of duty. 40. Kanhai Ram Thekedar (supra) was in the context of the peculiar provisions in Section 8 of the Uttar Pradesh Sales Tax Act, 1948. Section 8 (1 C) had provided that the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sections of the Customs Act for the period commencing immediately after the demand notice dated 18 October 2012. The inordinate delay in resisting the demand for interest in 2013 is not even attempted to be explained. Instead, the Petitioner has not chosen to challenge this demand directly but only indirectly or collaterally. 44. Kanhai Ram Thekedar (supra) is distinguishable and will not apply in the fact of the present case for the following broad reasons: - (i) The petitioner has not challenged the communication demanding interest under Section 28AA of the Customs Act before the authorities constituted under the Act. After almost 10 years from the demand dated 18 October 2012, the petitioner cannot raise the issue, especially when the lis travelled before the Supreme Court and before the authorities under the Act in the interregnum. (ii) The U.P. Sales Tax Act's provisions materially differ from the Customs Act's provisions. Section 28 (10) of the Customs Act provides that where the proper officer passes an order determining the duty under Section 28, the persons liable to pay the said duty shall pay the amount so determined along with the interest due on such amount whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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