2021 (4) TMI 1206 - HC - Customs

Court dismisses contempt application, finding respondent's actions not willful disobedience. Parties advised to seek legal recourse.

Oil And Natural Gas Corporation Ltd. Versus R.R. Pawar, Assistant Commissioner (Refund)

Oil And Natural Gas Corporation Ltd. Versus R.R. Pawar, Assistant Commissioner (Refund) - TMI Issues Involved:1. Contempt of Court under the Contempt of Courts Act.2. Refund of customs duty and interest under the Customs Act, 1962.3. Unjust enrichment and its implications on the refund claim.Issue-wise Detailed Analysis:1. Contempt of Court under the Contempt of Courts Act:The applicant, Oil and Natural Gas Corporation Ltd., filed an application for contempt under the Contempt of Courts Act against the Customs authority. The applicant alleged willful and deliberate disobedience of the Court's order dated 20.02.2020, which directed the authority to decide on the refund and interest without insisting on additional material. The applicant contended that the Customs authority re-examined the aspect of unjust enrichment and directed the refund amount to be credited to the Consumer Welfare Fund, contrary to the Court's order.The respondent authority, represented by the Assistant Commissioner (Refund), filed an affidavit tendering an unconditional apology and explained that the decision was based on the interpretation of the Court's order. The Court held that the jurisdiction under the Contempt of Courts Act should not be invoked unless there is a deliberate and willful disobedience of the Court's order. The Court found that the respondent authority's actions were based on their interpretation of the order and not in willful defiance.2. Refund of customs duty and interest under the Customs Act, 1962:The applicant had entered into a contract with M/s. Techno Exports, Moscow, for conducting a seismic survey and imported equipment for the said work. The goods were provisionally cleared, and the applicant claimed a refund of the excess customs duty paid. Various rounds of litigation led to an order dated 21.08.2013 by the Commissioner, Customs Department, directing the finalization of all 16 Bills of Entry. Despite this order, the Customs authority did not finalize the refund and continued to demand documents until a final assessment order was passed on 23.01.2017. The applicant filed a petition claiming a refund of Rs. 5,51,82,641.08 along with interest.The Court's order dated 20.02.2020 directed the authority to decide on the refund and interest without insisting on additional material. The respondent authority, however, directed the refund to be credited to the Consumer Welfare Fund under Section 27(2) of the Customs Act, 1962, citing unjust enrichment. The applicant argued that the authority's decision was in deliberate disobedience of the Court's order.3. Unjust enrichment and its implications on the refund claim:The respondent authority argued that the refund claim was subject to the condition of unjust enrichment, as provided under Section 27(2) of the Customs Act, 1962. The authority contended that the applicant failed to provide documentary evidence to establish that the incidence of customs duty was not passed on to the buyers or any other persons. The respondent emphasized that the refund was credited to the Consumer Welfare Fund due to the applicant's failure to justify unjust enrichment.The Court noted that the respondent authority had passed a reasoned order based on the material available on record and after affording the applicant an opportunity to produce additional material. The Court found that the authority's actions were not in willful disobedience of the Court's order. The Court held that the applicant should seek recourse through appropriate legal channels to challenge the authority's decision rather than invoking contempt jurisdiction.Conclusion:The Court dismissed the application for contempt, emphasizing that the respondent authority's actions were based on their interpretation of the Court's order and not in willful defiance. The Court directed the parties to approach the appropriate forum for raising their contentions and adjudication without being influenced by the disposal of this petition.