JUDGMENT
A.K. Dutta, J.
1. By this writ application under Article 226 of the Constitution of India the writ petitioners, Ashok Machine Tools Corporation and Another (hereinafter referred to as petitioners), have prayed the court for issue of a writ in the nature of mandamus or any other appropriate writ, order or direction directing the respondenis to pay and place at the disposal of the petitioner while refunding the amounting of Rs. 14,56,056 as excess recovered in clearing the goods of the petitioner against Bill of Entry No. 426/ 91 dated 10.8.91 and further to pay interest on the said amount at the rate of 21% per annum from the date of deposit till the date of refund with direction that the amount be paid with interest within 72 hours from the date of grant of Rule”, along with the other relief prayed for, for the reasons stated and on the ground made out therein.
2. A Gear Hobbying Machine was imported by the Petitioners on the basis of an Import Licence granted to them on 12th November. 1990 for import of such machinery on the recommendation of the Director General of Technical Development (hereinafter referred to as D.G.T.D.). The said Machine was subject to the payment of customs duty at the rale of 75 percent ad-valorem at the lime of the said importation. An Exemption Notification, being No. 317/87. published by the Government of India on 17th September, 1987. exempting Customs duly on such machines in excess of 35 percent ad-valorem was then in force. Such exemption in terms thereof was subject to the condition that an officer not below the rank of Industrial Advisor to the DGTD under the Ministry of Industry, Government of India, shall certify in each case that such machine was imported for use in the Industry for manufacture of Machine Toots. After Importation of the said Machine, in the aforesaid circumstances, the petitioners had submitted a Bill of Entry for Home Consumption, being No. 426/91. on 10th August, 1991. claiming the benefit of the said exemption in terms of the said Notification. The said Machine was discharged at the Calcutta Port on 21st August. 1991. The physical verification of the same was carried out by the respondents on 10th September, 1991, and the assessment of Customs Duty payable therefor was carried out by the respondent on 13th September, 1991. The Petitioners were informed at the time of assessment that the exemption claimed by them would
not be available (to them) until such Certificate, as aforesaid, was produced by them. They (Petitioners) had thereupon submitted in writing that in as much as the relevant licence had been submiltcd pursuant to the recommendation of the DGTD. no separate certificate was required therefor. By their letter to the concerned respondent they had alternatively undertaken on 16th September, 1991 to submit the certificate, to be issued by the DGTD. within a period of six weeks, and had requested the respondent thereunder to assess and release the consignment at Ihe rate of 35 percent Customs duly on their submitting the necessary provisional duly bond and and-use bond. The petitioner’s aforesaid request was not acceded lo by the respondent-authorities. The petitioners had paid the entire amount of Rs. 32,76,126 only, as assessed by the concerned respondent at the full rate (and not on the concessional basis), under protest on 17th September, 1991. The aforesaid machinery was thereafter released on 23rd September, 1991. The Certificate, as required in terms of the aforesaid Notification, was issued by the Office of the DGTD and was submitted by the petitioners to the respondents on the very next day on 24th September. 1991. The petitioners had thereafter filed a refund application before the respondent No. 3 for refund of the excess amount of duly paid by them, amounting to Rs. 14,56,056 only, on 20th February, 1992. under section 27 of the Customs Act, 1962 (hereinafter referred to as the Act.). Their said refund application not having been disposed of by the respondent-authorities till November, 1992, they have been constrained to file Ihe instant writ application for Ihe reliefs prayed for therein, in the aforesaid circumstances.
3. The writ petition filed by the petitioners is vehamently resisted by the contending respondents by filing an Affidavit-in-Opposition mainly on the following there grounds/points, touching the merit of the refund application:
(a) that the refund application had not been made in the requisite format:
(b) that the payment of duty was not made by the petitioners under protest, and
(c) that the condition imposed by the said Exemption Notification is a condition precedent for claiming concessional rate in terms thereof. No such certificate having been produced by the petitioners at and/ or before the time of assessment and removal of the goods in question, the petitioners’ application for refund could not have been allowed.
4. During the hearing, the learned senior counsel for the conlending respondents. Mr. N.C.Roy Chowdhury. had further submitted that the order of assessment of duty on the basis of which the duty had been paid by the petitioners and the goods in question had been cleared having attained finality refund could only be made to them on the assessment in question being set aside in appropriate proceedings. So long as the assessment order in question is not set aside, no refund could be made to Ihe petilioners. the way prayed for by them. It was further submitted that since it is for the authority concerned to dispose of the relevant refund application the court should not direct the authority concerned to make the refund, as prayed for by the petilioners. It had also been urged that the amendment made to the relevant Act requires the authorities concerned to determine not only whether
the petitioners would be entitled to the refund but also whether the amount to be refunded Is to be paid directly to the petitioners or credited to the Consumers Welfare Fund.
5. In view of the pleas so taken by the contending respondents, let me now proceed to deal with the aforesaid points/grounds taken by them by one by one.
6. To the first point/ground first. As already noted, it was sought to be contended by the contending respondents that the refund application made by the petitioners was not in the requisites format. During the hearing it transpired that a format has been prescribed by the Customs Application (Format) Regulation. 1991, which had come into force with effect from 20th September. 1991. A look to the said formal and a comperlson of the same with the refund application made by the petitioners, copy of which has been annexed at page 18 of the Petitioners’ Affidavit-in-Reply, affirmed on 21st December, 1992, would at once clearly indicate that the said refund application had been made strictly in terms of the format prescribed in the aforesaid regulations. It would also seem significant and observable to note lhat no such objection/ground had been indicated by the respondent-authorities to the pelilioners from the time of Iheir making the relevant refund application in February. 1992 and the filing of the instant writ application in November, 1992. The implication appears to be immediately apparent and obvious. The first point/ground taken/raised on behalf of the contending respondents clearly, therefore, seems to be entirely ill-made.
7. To the second point/ground next. It had been contended on behalf of the respondent that the payment of duty was not made by the petitioners under protest. But to that I would at once note with a minute of dissent lhat it would pretty clearly appear from the entry against serial no. 6 of the aforesaid refund application, appearing at page-18 of the petitioners’ aforesaid Affidavit-in-Reply, that the duty was paid by the petitioners “on protest”, which appears to have been registered in the Protest Register vide REGN No. 42 of 19.9.91. maintained by the authorities concerned. The respondent-Authorities could very well have produced the relevant Protest Register to falsify the petitioners’ aforesaid contention that the duty was paid by (hem under protest. The relevant Protest Register, which must be in the custody of the Respondent-Authorities, not having been produced before the court to substantiate their aforesaid contention, the same appears to have been deliberately with-held from the court, giving rise to adverse presumption against the Respondents aforesaid contention in terms of illustration (g) to section 114 of the Evidence Act. It clearly does not lie in the mouth of the contending respondents to now contend that the duty was not paid by the petitioners under protest, in the aforesaid circumstances. The second point/ ground, taken raised by the contending Respondents as well seems to me to be absolutely pointless.
8. To the third point ground taken/raised by the contending respondents in their Affidavit-in-Opposition last. It had sadly been sought to be contended by the contending respondents that the condition imposed by the relevant Exemption Notification is a condition-precedent for claiming concessional rate thereunder. But the relevant Notification Nos. 158/87/-CUS, 215/87-CUS. 112/88-CUS and. 103/90-CUS dated 2.4.87, 14.8.87. 29.3.88. and 20.3.90 respectively, being Annexurc ‘A’ to the writ application, such as they are,
plainly read, do not seem to Indicate that production of certificate is a condition precedent for claiming concessional rate in terms thereof. There is nothing express therein to reflect any such intention. That apart, there could be no denying that exemption thereunder must be meant for the purpose of the Industry. An Exemption Notification could not, therefore, be construed in such a manner so as to defeat the very object of the exemption. A substantial compliance with the condition of the Exemption Notification should be construed as a good compliance so as not to frustrate the object of such exemption. The following observations of the Supreme Court in Union of India v. Wood Paper Limited seem worth bearing in mind in this context:
“Literally exemption is freedom from Liability, tax on duty. Fiscally it may assume varying shapes, specially in a growing economy. For instance tax holiday to new units, concessional rate of tax to goods or persons for limited period or with the specific objective. That is why its construction, unlike charging provision, has to be tested on different touch stone. In fact an exemption provision is like an exception and on normal principle of interpretation of statutes it is conslrued strictly either because of legislative intention or on economic justification of inequitable bargain or progressive approach of fiscal provisions intended to augment state revenue. But once exemption or exemptions becomes applicable no rule of principle requires it to be construed strictly liberal and strict construction of an exemption provision arc to be invoked at different stages of interpreting it when the question is whether a subject fills it being in nature of exception is to be construed strictly and against the subject but once the ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play has to be given to it and it calls for a wider and liberal construction. A notification has to be read in its entirety and construed as a whole. But a construction which results in inequitable results and is incongruous is to be avoided.”
9. Their Lordships went on the add that when a statute or notification provides for grant of any benefit and /or exemption upon a body of person, subject to fulfilment of any specific condition by the said body of person, and the said condition is not qualified by the words either ‘previous’ or ‘subsequent’, it is normally construed that the fulfilment of the said condition Is not a condition precedent or condition subsequent to the availability of the said benefit and/or exemption. It is construed that the said body or person shall be entitled to the said benefit or grant if it has fulfilled the said condition at some stage of the transaction.
10. It would also be pertinent to recall here the following observations of the Supreme Court in Life Insurance Corporation v. Escorts Limited, thereof, while interpreting the conditions imposed by section 29 of the Foreign Exchange Regulations Act, 1973:
“We have already extracted section 29(1) and we notice that the expression used is “general or special permission of the Reserve Bank of India” and that the expression is not qualified by the word “previous” or “prior”. While we are conscious that the word “prior” or “previous” may be implied if the conlextual situation or the object and design of the legislation demands it. we find no such compelling circumstances justifying reading any such
implication Into section 29(1). On the other hand, the indication are all to the contrary. We find, on a perusal of the several different sections of the very Act that the Parliament has not been unmindful of the need to clearly express its intention by using the expression “previous permission” whenever it was thought that “previous permission” was necessary. In section 27(1) and 30. we find that the expression permission is qualified by (he word “previous’ and is sections 8(1). 8(2) and 31 the expression ‘general or special permission’ is qualified by the word “previous”, whereas in sections 13(2), 19(1). 19(4), 20, 21(3), 24. 25. 28(1) and 29, the expressions ‘permission’ and ‘general1 or special permission remain unqualified. The distinction made by Parliament between permission simplicitor and previous permission in the several provisions of the same Act cannot be ignored or strained to be explained away by us. That Is not the way to interpret statutes. The proper way is to give due weight to the use as well as the omission to use the qualifying words in different provisions of the Act. The significance of the use of the qualifying word in one provision and its non-use in another provision may not be disregarded. In our view, the Parliament deliberately avoided the qualifying word previous in section 29(2) so as to invest the Reserve Bank of India with certain degree elasticity in the mailer of granting permission to nonresident companies to purchase shares in Indian Companies. The objecl of the Foreign Exchange Regulation Act, as already, explained by us. undoubtedly, is to earn, conserve, regulate and store foreign exchange. The entire scheme and design of the Act is directed towards that end. Originally the Foreign Exchange Regulation Act, 1947 was enacted as a temporary measure, but it was placed permanently on the Statute Book by the Amendment Act of the 1957. The Statement of Objects and Reasons of the 1957 Amendment Act expressly stated, “India still continues to be short of foreign exchange and it is necessary to ensure that our foreign exchange resources are conserved in the national Interest”. In 1973, the old Act was repealed and replaced by the Foreign Exchange Regulation Act. 1973. the long title of which reads: “An Act to consolidate and amend the law regulating certain payments, dealings in foreign exchange and securities, transactions, indirectly affecting foreign exchange and the import and export of currency and bullion, for the conservation of foreign exchange resources of the country and the proper utilisation thereof in the interest of the economic development of the country.”
11. Their Lordships had noted therein that “Section 76 emphasises that every permission or licence granted by the Central Government or the Reserve Bank of India should be animated by a desire lo conserve the foreign exchange resources of the country. The Foreign Exchange Regulation Act is, therefore, clearly a statute enacted in the national economic interest. When construing statutes enacted in the national interest, we have necessarily to take the broad factual situations contemplated by the Act and interpret its provisions so as to advance and not to thwart the parlicular national interest whose advancement is proposed by the legislation. Traditional norms of statutory interpretation must yield to broader notions of the national interest. If the legislation is viewed and construed from that perspective, as indeed it is imperative that we do. we find no difficulty in interpreting ‘permission’ to mean ‘permission’, previous or subsequent, and we find no justification whatsoever for limiting the expression ‘permission’ to ‘previous permission’
only. In our view, what is necessary is that the permission of the Reserve Bank of India should be obtained at some stage for the purchase of shares by non-resident companies.”
12. The aforesaid relevant Notifications being, what they are, containing no express language to reflect any such intention that production of certificate is a condition precedent to claim exemption thereunder, and in view of the aforesaid observations of the Supreme Court in the aforesaid decisions it would be difficult to hold that production of certificate Is a condition precedent to claim concessional rate, as vainly sought to be contended by the contending respondents. The third point/ground taken/ raised by the contending respondents in their Affidavit-in Opposition he as well, accordingly, overruled.
13. Let me now proceed to deal with the two other points urged by Mr. Roy Chowdhury during the hearing, as already indicated above. Mr. Roy Chowdhury had vexed elequent during the hearing that the order of assessment of the basis of which the duly was paid by the Petitioners and the goods had been cleared has already attained finality, and no refund could be made to them so long as the said assessment order is not set aside in appropriate proceedings. A plain reading of section 27 of the Act. however, docs not seem to support the aforesaid submission of Mr. Roy Chowdhury. Section 27(1) of the Customs Act. 1962 reads as follows:
S. 27(1). “Any person claiming refund of any duty and interest, if any. paid on such duly-
(i) paid by him in pursuance of an order of assessment; or
(ii) borne by him,
may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Collector of Customs”….
14. With the said provisions, as it is. a claim for refund of duty can be made thereunder by a person by whom any duly has been paid in pursuance of an order of assessment made by an officer of the Customs indicated therein. A claim for refund of duty cannot thus made by a person if Ihe duty has not been paid by him in pursuance of an order of assessment made by such an officer of Customs. An application for refund, in such circumslances, could, therefore, only be made by such a person in terms of section 27 of the Act,
15. There is nothing in the aforesaid provisions to indicate that a claim for refund thereunder could be made only when the assessment order In question has been set aside In appropriate proceedings under the Act. To held so, would be to import something which Is not there In the relevant statute. Sub-section (3) of section 27. per contra. provides as follows:–
“Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the regulations made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2).”
16. In terms of the aforesaid provision if any asseessment order is modified or set aside in appeal or revision under the Act and refund of any duty
becomes due to any person, the proper Officer has to refund the amount to such person who would not be required to make any claim in that behalf, making it clear that a claim for refund under section 27 is required to be made when the assessment order in question is not modified or set aside in appeal or revision under the Act. Sub-section (2) of section 27 further makes clear that “if on receipt of any such application, the Assistant Collector of Customs is satisfied that the whole or any part of the duty and interest, if any, paid on such duty paid by the applicant in refundable, he may make an order accordingly and the amount determined shall be credited to the fund,” or paid to the applicant, in the circumstances specified in the proviso thereto.
17. The provision of section 27 of the Act being, what they are. it would be. therefore, too difficult to hold that the petitioners’ claim for refund could not be entertained so long as the assessment order in question is not set aside in appropriate proceedings, as sadly sought to be submitted by Mr. Roy Chowdhury. It would also be pertinent to note in this context that assessment of duty may be made either under section 17 or provisionally under section 18 of the Act. !n the aforesaid premises, the submission made by Mr. Roy Chowdhury on the point, to my judgment, is clearly liable to be overruled, and be accordingly overruled.
18. It was further submitted by Mr. Roy Chowdhury that in view of the amendment made to Customs Act. 1962 the Customs Authorities would be required to determine not only whether the petitioners would be entitled to refund, but whether the amounl should be refunded to them or should be credited to the Consumers’ Welfare Fund. But unhappily for them, the relevant provisions in the Amendment Act could have no application if the concerned goods are Capital goods and imported for the purpose of personal or actual user. A Division Bench of the Bombay High Court in Solar Pesticides (P) Ltd. v. Union of India 1992(57) ELT 201 has held that the question of unjust enrichment arises under the amended scheme whom refund is asked for by a person who has sold the imported goods and the process directly passed on the burden of duty to the buyer. It has further been held, inler-alia, therein that the doctrine of unjust enrichment, which is the genesis of the amendment, has no application in eases where the imported goods are either consumed by the importer or are used by him in the manufacture of other products. A Division Bench of the Calcutta High Court in the case of Assistant Collector of Customs v. East Anglia Plastics (India) Ltd., 1994(74) ELT 29(Cal) has also accepted the aforesaid view of the Bombay High Court. Sitting singly, as I do, I cannot certainly differ therefrom. In the facts and circumstances of the instant case, the aforesaid submission made on behalf of the contending respondents be also accordingly overruled.
19. Realising the difficulty somewhat tardily, the learned counsel for the contending respondents, referring to an unreported decision of this Court dated 12th December, 1995 in Union of India & Others v. Incab Industries Limited and Another in Appeal No. 957 of 1992, had submitted that the question regarding passing of the amount of duty realised to the ultimate consumer needs to be ascertained by the authority concerned to whom the mailer should be referred. But the principles of the said case are not applicable to the instant ease before us as the facts herein are distinguishable from the facts in the aforesaid case. The relevant facts were in dispute in
the aforesaid case. Bul the facts herein do not seem to be in dispute. There seems to be no dispute that the Gear Hobbying Machine had been installed in the factory of the petitioner. There is neither any dispute regarding passing of the amount of duty realised to the ultimate consumer. There being no dispute of facts of the instant matter, to my judgment, is not required to be referred to the authority concerned for coming to any finding on facts. It had further been submitted by Mr, Roy Chowdhury during the hearing, relying upon a decision of a Division Bench of this Court dated 21st September. 1995 in Indian Cable Company Ltd. and others v. The Collector of Customs and others, arising out of an original order No. 691 of 1986, a xerox copy of which had been produced before the court during the hearing, that the petitioner may be directed to make an application for refund before the authority concerned. But since an application for refund had long been made by the petitioners herein before the authority concerned, who had failed to dispose of the same as yet. and has further taken the plea in the instant proceedings that the petitioners’ said refund application cannot be allowed for (he reason indicated above, there could be little justification for directing the petitioners to make another application for refund before the authorities concerned, as submitted by Mr. Roy Chowdhury on behalf of the contending respondents.
20. Mr. Roy Chowdhury had also submitted during the hearing that the Hon’ble Court may not be pleased to direct refund of duty to the petitioners, ad prayed for. but may be pleased to direct the concerned authority to dispose of the refund application in the background of the submissions made, as already indicated above. But the submissions as made by him could neither be enterlained for the reasons I shall presently indicate. The application for refund was made by the petitioners on 20th February. 1992. Amazingly, however, the authorities concerned did not bother to deal with the same till the filling of the instant writ application in November. 1992, despite lapse of about 9 months, in the meantime.They (authorities concerned) did neither care to dispose of the petitioners’ relevant refund application even after the filling of the instant writ application to exhibit diligence and bona fide in the matter. It is only in their Affidavit-in-Opposition, affirmed on 1st December, 1992. that they had for the first time made clear their mind that the petitioners’ application for refund cannot be allowed in view of the three points/grounds taken by them therein, as already indicated above, touching the very merits for the refund application. Their learned advocate, during the hearing, had submitted some other grounds, already, indicated above, for which their (petitioners’) refund application could neither be entertained. In view of the pleas so taken by the contending respondents in their Affidavit-in-Opposition and during the hearing, making clear their mind in the matter, the submission made by Mr. Roy Chowdhury for directing the concerned authority to dispose of the Petitioners’ refund application would, in substance, clearly amount to an idea formality. As regards Mr. Roy Chowdhury’s other submission that it would not be for the court. In the facts and circumstances of the matter, to direct refund of duty to the petitioners, I would feel tempted to reproduce the following observations of the Supreme Court in the Comptroller and Auditor-General v. K.S. Jagannathan, thereof:
There is thus no doubt that the High Courts in India exercising their jurisdiction under Article 226 have the power to issue a writ of mandamus
or a writ in the nature of mandamus or to pass orders and give necessary directions where the Government or a public authority failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the Government or has exercised such discretion mala fide or on irrelevant considerations or by ignoring the relevant conslderalions and materials or in such manner as to frustrate the object of conferring such discretion or the policy for implementing which such discretion has been conferred, in such all cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Article 226; issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give discretions to compel the performance in a proper and lawful manner of the discretion conferred upon the Government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parlies, the court may itself pass an order or give directions which the Government or the public authority should have passed or given had it properly and lawfully exercised its discretion.”
21. It would also not be out of please, in this context, to refer to the following observations of the Supreme Court in Gujarat Steel Tubes Limited v. Its Majdur Sabha, thereof:
“So broad are the expressive expression designedly used in Article 226 that any order which should have been made by the lower authority could be made by the High Court. The very width of the power and the disinclination to meddle, except where gross injustice or fatal illegality and the like are present, inhibit the exercise but do not abolish the power.”
22. In view of the aforesaid decisions of the Supreme Court a High Court, in a fit, proper, and appropriate case, can, in the exercise of its discretion under Article 226 of the Constitution, issue a writ of mandamus or a writ in the nature of mandamus or pass order and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the Government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parlies, the court may itself pass an order or give directions which the Government or the public authority should have passed or given, had it properly and lawfully exercised its discretion.
23. The respondent-authorities having pointedly failed, neglected and ignored to dispose of the relevant Refund Application filed by the petitioners on 20th February, 1992, which they (the former) should have allowed, in the facts and circumstances amply and appallingly made clear above, had they properly and lawfully exercised their discretion in the matter, (his court would not feel chary in passing order and directing them (the Respondent-Authorities concerned) to make the refund, as prayed for by the petitioners.
24. In the premises above, the writ application should clearly succeed, as it must; and be. accordingly, allowed with cost against the contending Respondents. The respondent-authorities concerned are hereby directed, by issue of a writ in the nature of mandamus, to refund to the writ petitioners the excess amount of duty paid by them, amounting to Rs. 14,56,056/- only, together with interest thereon at the rate of 18% percent per annum from the date of their (petitioner’) filing the relevant refund application before the
respondent No. 3 on 20th February, 1992 till the date of refund in terms of this order. The refund shall be made by the respondent-authorities concerned to the writ petitioners in terms of this order within a period of two weeks from the dale of communication of this order.
Hearing fee assessed at 200 G.M.S.
25. Petition Succeeds