1989 (12) TMI 54 - HC - Customs

Court dismisses challenge to customs duty order, rules on earnest money refund, and orders return of amount with interest.

The court dismissed the challenge to the customs duty order as it merged in the appellate tribunal decision. It ruled that Respondent No. 4 had no legal ... Writ petition - Refund of earnest money deposited with supplier firm for purchase of cellulose nitrate sheets Issues:1. Challenge to customs duty order and appellate tribunal decision.2. Withholding of earnest money by Respondent No. 4.Analysis:1. The petitioners challenged the customs duty order dated 4th January 1974 and the appellate tribunal decision dated 24th January 1979. The court held that the petitioners cannot challenge the 1974 order as it merged in the tribunal decision. Since there was no real challenge to the tribunal decision, the petition on this aspect was dismissed. The court emphasized that the clearing agents had acted at all stages, including showing cause and appealing, and could have easily obtained a copy of the tribunal's order. Therefore, the challenge based on the 1974 order was not sustainable.2. Regarding the withholding of earnest money by Respondent No. 4, the court ruled that they had no legal right to retain the amount deposited for a separate transaction. The court clarified that there is no general right of lien for Respondent No. 4 to claim reimbursement from the petitioners. Even if Respondent No. 4 believed they were entitled to reimbursement, they should have pursued a separate legal action. Since no such action was taken, Respondent No. 4 was obligated to refund the amount. The court noted that during the pending appeal in 1977, no amounts had been paid by Respondent No. 4, further supporting the obligation to refund the earnest money.3. The court explicitly stated that it did not decide on whether the petitioners were required to pay the short-levy duty claimed by Respondent No. 4. Respondent No. 4 agreed to return the amount to the petitioners with 10% interest per annum if the petitioners succeeded. Consequently, the court made the petition absolute in favor of the petitioners, ordering the return of the amount with interest from the due date. No costs were awarded in the petition.