2016 (3) TMI 387 - HC - Customs

Petitioner Seeks Mandamus for Refund, Interest Clarified

The petitioner sought a writ of mandamus for the refund of a specific sum following the Tribunal's order, directing the refund of the principal sum along ... Writ petition - Refund of principal and interest amount under Section 129 EE of the Customs Act, 1962 - Setting aside of demand penalty and fine - Confiscation of fourteen machineries which were not covered by the EPCG licence - Held that:- the entire amount has been refunded and interest alone has to be paid to the petitioner. The claim of the petitioner towards interest under Section 129 EE of the Customs Act, 1962, could have been granted within 60 days, but the same has not been made. Further, the issue in question has already been over, since the Civil Appeal No.3207 of 2007 filed by the department was dismissed for non prosecution by the Hon'ble Apex Court. Even thereafter, the petitioner's claim for interest has not been considered. Therefore, in view of the decision of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Hyderabad vs. I.T.C. Limited [2004 (12) TMI 90 - SUPREME COURT OF INDIA] and in view of the Circulars F.No.275/37/2K-CX.8A dated 02.01.2002 and 802/35/2004-CX dated 08.12.2004 issued by Ministry of Finance, the petitioner is directed to submit a calculation memo with regard to interest to the respondents and the same shall be considered. - Petition is disposed of Issues:1. Refund of principal sum along with interest to the petitioner.2. Denial of sufficient opportunity in the confiscation of machineries.3. Validity of bank guarantee and its relation to the refund.4. Applicability of Circular F.No.275/37/2K-CX.8A for refund applications.5. Claim for interest under Section 129 EE of the Customs Act, 1962.6. Pre-deposit refundability with interest as per Supreme Court judgment.7. Verification of interest calculation for the actual number of days.Analysis:1. The petitioner sought a writ of mandamus for the refund of a specific sum following the Customs, Excise and Gold (Control) Appellate Tribunal's order. The Tribunal set aside the demand, penalty, and fine, directing the refund of the principal sum along with interest at 15%.2. The petitioner's appeal to the CEGAT was based on the denial of sufficient opportunity in the confiscation of machineries not covered by the EPCG license. The denovo adjudication resulted in the confiscation of the machines with an option for redemption, leading to subsequent appeals and a dismissal by the Supreme Court.3. Initially, the court directed the petitioner to furnish a bank guarantee, which was later clarified to be unnecessary. The validity and necessity of the bank guarantee in relation to the refund process were addressed in the proceedings.4. The Circular F.No.275/37/2K-CX.8A issued by the Ministry of Finance was discussed for its applicability to refund applications under relevant sections of the Central Excise Act and Customs Act, simplifying the process for refund requests.5. The petitioner claimed interest under Section 129 EE of the Customs Act, 1962, which was not granted within the stipulated 60 days. The delay in processing the interest claim was highlighted, despite the conclusion of related legal proceedings.6. Referring to a Supreme Court judgment, the court emphasized the refundability of pre-deposits with interest upon the assessee's success. Circulars issued by the Ministry of Finance reiterated the obligation to return such pre-deposits promptly.7. The court directed the petitioner to submit a calculation memo for interest verification within a specified timeline, considering the submissions made by the respondents' counsel. The verification of interest calculation for the actual number of days was crucial for the final resolution of the case.