Dilip Kumar Jain vs Commissioner of Customs

Indira Banerjee, J.—In this writ application the Petitioner has inter alia challenged a notice being F. No. S 107-59/2006 ARS dated 24th November 2008 issued by the Assistant Commissioner of Customs, Appraising Refund Section (Port), Kolkata inter alia alleging that interest of Rs. 18,42,867/- on delayed refund of dumping duty had erroneously been paid in respect of the consignments specified in the said order, the admissible interest being Rs. 1,71,124/- and calling upon the Petitioner to refund the excess refund amount within the time stipulated in the said order.

The Petitioner imported consignments of Styrene ButadieneCopolymer Resins (KHS-68) from Korean manufacturers. Disputes arose between the Respondent and the Petitioner on the issue of whether anti-dumping duty was payable on the consignments under the provisions of the Custom Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, hereinafter referred to as "Anti Dumping Duty Rules".

On the complaint of certain Indian manufacturers the Respondent-authorities arrived at a preliminary finding on 21st January 1999 that antidumping duty was leviable on Styrene Butadiene Rubber (SBR) in terms of a Central Government notification dated 20th April 1999.

On 2nd June 1999 the Designated Authority arrived at its final finding affirming the preliminary finding on imposition of anti-dumping duty on SBR.

The Petitioners claim to have imported KHS-68, an article different from SBR, which was liable to anti-dumping duty.

According to the Petitioner, while KHS-68 was classifiable under the Customs sub-heading 3903.90 of the Classification List under the Customs Tariff Act, 1975, SBR was classifiable under sub-heading 4002.19 of Chapter 40 of the Classification List under the said Customs Tariff Act, 1975. It has been asserted that no anti-dumping duty was chargeable on KHS-68 imported into India.

It is not necessary to go into details of the disputes between the Petitioners and the Respondents with regard to anti-dumping duty imposed on the consignments imported by the Petitioner. Suffice it to mention that a writ application being W. P. No. 2772 of 2001 was moved by the Petitioner on 31st May 2001 (in Vacation Bench), challenging the imposition of dumping duty on the goods imported by the Petitioner.

His Lordship the Hon''ble Justice Kalyan Jyoti Sengupta, upon hearing the learned lawyers appearing for the respective parties, passed an interim order directing the Petitioner to deposit the full amount of anti-dumping duty with the learned Advocate-on-Record of the Union of India. The dumping duty so paid, was directed to be kept in a separate account.

The writ application was ultimately dismissed by a judgment and order dated 29th January 2002 of His Lordship the Hon''ble Justice Dilip Kumar Jain Vs. Commissioner of Customs, ].

Being aggrieved, the Petitioner preferred an appeal being A.P.O. No. 310 of 2002. By an order dated 17 May 2002 the Division Bench comprising Samaresh Banerjea and P.N. Sinha, JJ. admitted the appeal and passed a limited interim order inter alia directing the Petitioner to pay duty levied by the Respondent authorities on the condition that in the event the writ Petitioner succeeded, the Respondent authorities would be liable to refund the amount paid by the Petitioner on account of dumping duty along with interest at the prevailing bank rate.

Pursuant to orders of Court, the firm of which the Petitioner, is proprietor deposited Rs. 42,77,418/- towards anti-dumping duty under protest.

The appeal being A.P.O. No. 310 of 2008 was ultimately allowed by a judgment and order dated 21st August 2006 of the Division Bench comprising Their Lordships the Hon''ble Justice Ashim Kumar Banerjee and the Hon''ble Justice Tapan Mukherjee, JJ.

The Division Bench inter alia held as follows:

The appeal succeeds. The Appellant would be entitled to claim for refund of the duty so paid by him under protest. If such application for refund is made, the authority must dispose of the same in the light of the observation made by us herein within a period of one month from the date of making such application.

The Division Bench has categorically referred to the interim order directing that the Petitioner would be entitled to interest on deposit of antidumping duty at the prevailing rate of interest charged by banks, in the event the writ application succeeded.

After the judgment and order dated 21st August 2006 of the Division Bench, the Petitioner applied for refund of the anti-dumping duty deposited under protest, along with interest thereon.

No action was taken whereupon the writ Petitioners moved a contempt application. In course of hearing of the contempt application on 5th April 2007 the Respondents produced an order being Memo No. 5-107-59/2006 ARS dated 2nd April 2007 whereby the Assistant Commissioner of Customs (Appraising & Refund Section) had allowed the application of the Petitioner for refund in compliance of the judgment and order of the Division Bench passed on 21st August 2006. The Petitioner was not allowed interest.

By an order dated 2nd April 2007 the Division Bench disposed of the contempt application inter alia granting liberty to the Petitioners to accept the amount offered by the customs authorities towards refund, without prejudice to his rights and contentions and to apply for interest to the appropriate authority.

By an order dated 11th July 2007 the Assistant/Deputy Commissioner of Customs (Appraising Refund Section) awarded interest of Rs. 20,13,901/- calculated at @ 9% p. a. on anti-dumping duty deposited by the Petitioner.

It is alleged that a release order was thereafter issued but the same was taken back on the ground of endorsement by the concerned Department. The Department appealed against the order for payment of interest referred to above. The appeal was dismissed. A revisional application filed by the Department was also dismissed. Thereafter further appeal has been filed with the Central Excise & Service Tax Appellate Tribunal. The Department has not been able to obtain stay of the order for payment of interest. The Petitioner has thus prayed for order for release of interest.

Mr. Banerjee appearing for the writ Petitioner submitted that the Appellate Authority had rightly rejected the appeal on the ground that the same was barred by limitation.

Mr. Ali appearing on behalf of the Respondent-authorities submitted that interest was liable to be paid @ 6% p. a. and from after expiry of three months from the date of making of the application for refund of duty.

However, as argued by Mr. Banerjee, interest was payable to the Petitioner in terms of the order of the Division Bench. The Division Bench directed payment of interest at the same rate as paid by banks. The assessing authority had thus rightly granted 9% interest.

In any event the appeal and the revisional application of the Department have been rejected. Even though the Department has appealed to the Tribunal there is no order of stay. The Respondent-authorities cannot indefinitely withhold interest, merely by filing an appeal, and more so when there is no interim stay. The Respondent-authorities are bound to pay interest in terms of the order dated 11th July, 2008.

The writ application is, thus, allowed.

The impugned notice is set aside and quashed.

The Respondents are directed to release interest in terms of the order of the Assistant Commissioner of Customs (Appraising & Refund Section) dated 11th July 2008.

Let urgent certified copy of this order be supplied to the parries, if applied for, upon compliance with all the requisite formalities.