Paradeep Phosphates Limited vs Chief Commissioner And Ors. on 1 November, 2007

Orissa High Court
Paradeep Phosphates Limited vs Chief Commissioner And Ors. on 1 November, 2007
Equivalent citations: 105 (2008) CLT 567
Bench: A Ganguly, I Mohanty


1. Heard Learned Counsel for the parties.

2. This Writ Petition has been filed by M/s. Paradeep Phosphates Ltd. (in short “PPL”) with a prayer for payment of interest pursuant to the order of the Hon’ble Supreme Court in Civil Appeal No. 2774 of 2001.

3. The material facts of the case are as follows: An appeal was filed by the Petitioner before the Collector (Appeal), Kolkata against the Order Dated 2.12.1992 passed by the Asst. Commissioner of Customs, Paradeep. By the said order, the Asst. Commissioner of Customs finalized the provisional assessment by confirming the duty demand of Rs. 10.27 Crores under Heading No. 8428.39. The said appeal filed by the Petitioner was rejected by Collector (Appeals) and against the same, the Petitioner filed appeal along with an application under Section 129E of the Customs Act for dispensation of the requirement of pre-deposit of duty before the Customs, Excise & (Gold) Control Appellate Tribunal (hereinafter, for short referred to as “CEGAT”). The Learned CEGAT passed an interim Order Dated 22.9.1997 directing PPL to make a pre-deposit of Rs. 5 Crores within a period of three months. The Petitioner challenged the said Order Dated 22.9.1997 before this Court by filing a Writ Petition being OJC No. 9374 of 1998. In the said Writ Petition this Court vide Order Dated 22.7.1998 (Annexure 2) reduced the said amount of pre-deposit to Rs. 3.08 Crores (30% of the assessed Customs Duty) and granted one month time to the Petitioner for making the pre-deposit. Against the said order the Petitioner approached the Hon’ble Supreme Court. The Hon’ble Supreme Court disposed of the Petitioner’s application on 29.10.1998 by extending the time for deposit of the amount within three months. Thereafter, the Petitioner deposited the duty demand of Rs. 3.08 Crores and the appeal of the Petitioner before the CEGAT was heard on merits and disposed of on 16.6.2000 vide order No. 917 of 2000 by holding that the ship unloader is classifiable under Heading 9801.00 of the Customs Tariff Act and the Petitioner accordingly discharged its duty liability under the said heading. Against the said Order Dated 16.6.2000, of the CEGAT, Opposite party No. 2 filed a Civil Appeal No. 2774 of 2001 along with the application for stay of operation of the order of the CEGAT dated 16.6.2000 before the Hon’ble Supreme Court. On 13.8.2001, the Hon’ble Supreme Court after hearing the parties disposed of the said application by passing the following order.

There will no stay on the condition, in the event the appeal fails and any amount becomes refundable to the Respondent, the Appellant will be liable to pay 15 per cent. Similarly, if the appeal succeeds, the Respondent will be liable to pay the balance amount of demand along with interest at the rate of 15 percent.

4. Pending disposal of the Civil Appeal, the Joint Commissioner of Customs refunded the pre-deposit amount to the Petitioner to the extent of Rs. 2.86 Crores after setting off against that sum other dues of the Petitioner for the earlier period. The Supreme Court ultimately heard Civil Appeal No. 2774 of 2001 and dismissed the same by 0rder-Dated 18.7.2006. Then the Petitioner filed an application on 3.8.2006 before the Deputy Commissioner of Customs, claiming the interest on the amount of pre deposit, which was lately refunded. In reply to the same the Deputy Commissioner, Customs, Paradeep by his letter dated 17.10.2006 informed the Petitioner that pre-deposit amount of Rs. 3.08 Crores had been refunded in compliance with the order of CEGAT and, therefore, no further amount was payable to the Petitioner. The Petitioner made further representation dated 5.4.2007 for payment of interest on delayed refund. There being no response from the Opposite Parties on the said prayer of the Petitioner, the Writ Petitioner has been filed by it.

5. The question fort consideration is whether or not the Petitioner is entitled to get the interest.

6. Learned Counsel for the Opposite Parties submits that if the Petitioner has any right to get interest on the delayed refund, it has to make a proper refund application before the appropriate authority.

7. We are of the view that it is not a case of refund. The Petitioner has a right to get the interest which is crystal from the order of the Hon’ble Supreme Court dated Department has refunded the pre-deposit amount to the Petitioner on 28.11.2002 during, pendency of the Appeal, but it has not paid any interest on it. It appears that the Department virtually sat tight over the Petitioner’s claim for interest even though its appeal was dismissed by the Hon’ble Supreme Court. Therefore, it is clear that the Department is consciously refusing to pay interest in terms of the order passed by the Hon’ble Supreme Court. In such a situation, the Petitioner is not called upon to file any refund application, but the Petitioner’s prayer for interest should be considered in view of the written representation made to it. In view of the Board’s circular dated 8.12.2004 the Petitioner has made such prayer for payment of interest in terms of the order of Hon’ble Supreme Court, we do not find any laches on the part of the Petitioner.

8. We, therefore, direct the Department to pay interest at the rate of 15%, as decided by the Hon’ble Supreme Court from 13.8.2001, i.e. the date on which right to get interest accrued to the Petitioner till 28.11.2002. But as no interest was paid by the Department and only the principal amount was refunded Department must also pay the interest at the rate directed by the Supreme Court on the amount refunded to the Petitioner from 13.8.2001 till the date of actual payment. This payment by made by the Department as early as possible preferably within a period of two months from today. The Writ Petition is thus, disposed of. Misc. Case No. 10457 of 2007 is also disposed of.

Urgent certified copy of this order be granted on proper application.

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