Indusind Media and Communications Ltd. vs Union of India

Rule; with the consent of Counsel for the parties returnable forthwith. With the consent of Counsel and at their request the Petition is taken up for hearing and final disposal.

The grievance of the Petitioners in these proceedings is that an application for refund in the amount of Rs. 1.02 crores, which was due under an order passed by CESTAT dated 29 August 2006 has not been granted despite several requests and the passage of years.

Sometime in May 2001, an investigation was commenced by the Directorate of Revenue Intelligence (DRI) on the allegation that the First Petitioner had contravened the EPCG scheme and had violated the conditions of Notification 110/95. According to the Petitioners, a meeting was held on 15 June 2001 with the Additional Director General of the DRI when it was indicated to the Petitioners that according to the Revenue, the importation of capital goods was not in accordance with the licences issued to the First Petitioner and the imported equipment was not required for the manufacture of the product to be exported. Accordingly, it was estimated that the Petitioners were liable to pay differential duty of Rs. 1.02 crores. The Petitioners claim to have deposited the amount on 18 June 2001 by a Pay Order drawn in favour of the Commissioner of Customs. A recording letter was addressed on 18 June 2001 to the Fifth Respondent. Notices to show cause were issued to the Petitioners by the DRI at New Delhi and Mumbai on 6 May 2002. By an order dated 14 October 2004, the Commissioner of Customs at Mumbai adjudicated upon both the notices and purported to appropriate and adjust the amount of Rs. 1.02 crores against the differential duty payable in respect of his order relating to the show cause notice issued by the DRI at New Delhi. The order of adjudication was set aside by the CESTAT on 29 August 2006. On 31 January 2007, the first Petitioner filed an application for return of the deposit of Rs. 1.02 crores together with interest. On 2 July 2007, a reminder was addressed to the Commissioner of Customs at the Air Cargo Complex, Mumbai. On 17 July 2007, the Assistant Commissioner of Customs responded by stating that it was not clear as to whether the matter was adjudicated by the Commissioner of Customs, Air Cargo Complex or by the Commissioner of Customs at Mumbai since other than the Bond and Bank Guarantee, the file and other related documents were not traceable. The Petitioners were, therefore, called upon to forward copies of the related documents including the Bills of Entry, Invoices, adjudication order and the order in appeal. The Petitioners by their letter dated 30 July 2007 forwarded the relevant documents inter alia pertaining to the deposit of an amount of Rs. 1.02 crores by Pay Order No. 511337 dated 18 June 2001 drawn on Indusind Bank Ltd. in favour of the Commissioner of Customs, Mumbai.

Initially, the Department had preferred an appeal before this Court against the order of the Tribunal. Since the dispute pertains to the rate of duty, the appeal was dismissed as withdrawn on 4 October 2007 before the Division Bench with liberty to move an appeal before the Supreme Court. The appeal was dismissed by the Supreme Court on 28 April 2008 on the ground that it was barred by limitation. On 12 March 2008, the Petitioners were informed by the Assistant Commissioner of Customs that the original documents had not been submitted and it was not clear as to whether an amount of Rs. 1.02 crores was deposited at the Air Cargo Complex or the New Customs House, Mumbai. Moreover, it was stated that the exact calculation and quantification of the refund claim had not been done as a result of which the refund claim could not be processed. The Petitioners were called upon to rectify these deficiencies. In response to the letter, the Petitioners'' Advocate by a detailed letter dated 30 April 2008 adverted to the relevant facts, including details in regard to the deposit of Rs. 1.02 crores by Pay Order dated 18 June 2001. By a letter dated 13 June 2008, the Petitioners'' Advocate also stated that the Pay Order was cleared by the Department through the Reserve Bank of India on 21 June 2001 and the money was credited in Account No. SOPQ 28777.

On 20 February 2009, the Assistant Commissioner of Customs addressed a letter to the Petitioners'' Advocate claiming that no letter has been received in response to the earlier letter dated 12 March 2008. Moreover, it was stated that the deposit of Rs. 1.02 crores by the Petitioners was appropriated towards the duty liabilities of the Air Cargo Complex, New Delhi and CWC, Okhla. Hence, the Petitioners were requested to approach the authorities at New Delhi with relevant documents for the refund. On 3 March 2009, the Petitioners'' Advocate submitted a representation stating that the amount of Rs. 1.02 crores was handed over to the Department at Mumbai; the order of adjudication in respect of the appropriation of the amount was passed in Mumbai by the Commissioner of Customs and that accordingly, the Customs authorities at Mumbai were obligated to refund the amount. By a further letter dated 22 September 2009, these facts were reiterated in an Advocate''s letter. By a letter dated 14 October 2009, the Petitioners were informed that the case has been forwarded to the Commissioner of Customs (Export) for factual report and the status of the case. By a letter dated 16 December 2009, the Deputy Commissioner of Customs, Air Cargo Complex, Sahar, Mumbai recorded that the Petitioners had deposited an amount of Rs. 1.02 crores by Pay Order dated 18 June 2001 during the course of the investigation. The letter also accepted that the appeals filed by the Petitioners against the adjudication were allowed by the CESTAT and the appeals filed by the department to the Supreme Court were dismissed on the ground of limitation. The letter, however, purported to state as follows :

(a) The amount of Rs. 1.02 Cr was received by Commissioner of Customs, Mumbai at New Custom House, Mumbai against Cash No. 2358 dated 19-6-2001.

(b) The Commissioner of Customs (Adjudication), Mumbai''s order dated 27-9-2004 (issued on 30-9-2004) had in the very first instance ordered recovery of Customs Duty of Rs. 1,00,40,231/-, along with interest, in respect of goods imported through ACC, Delhi and CWC, Okhla, Delhi by appropriating the said amount of Rs. 1.02 Crore.

(c) Accordingly, the ACC, Sahar had earlier also informed vide letters dated 20-2-2009, 9-3-2009 that jurisdiction to give relief by way of refund did not lie with the ACC, Sahar, Mumbai."

On 15 November 2010, the Central Board of Excise and Customs informed the Commissioner of Customs (Export), Air Cargo Complex, Mumbai that an amount of Rs. 1.02 crores was deposited by the petitioners with the New Customs House, Mumbai, but, since it was appropriated against the duty payment at New Delhi by an order in original issued by the Common Adjudicator appointed by the Board, the deposit amount had been converted to duty and adjusted against duty payment on account of Air Cargo Complex at New Delhi and CWC, Okhla, New Delhi. In this view, the refund claim may, it was directed, be decided by the Commissioner of Customs (Export), Delhi. On 23 November 2010, the Commissioner of Customs, New Customs House, called upon the Petitioners to submit all documents in original, including payment particulars of Rs. 1.02 crores made during the investigations, merger documents pertaining to the merger of the First Petitioner and the balance sheet for the relevant period. The Petitioners responded by their Advocate''s letter dated 22 December 2010.

We find merit in the grievance of the Petitioners that the refund application has been kept pending for an inordinately long period for absolutely no valid or justifiable reason. From the correspondence on record, it has been specifically admitted by the Customs Authorities that the Petitioners had, in fact, made a deposit of Rs. 1.02 crores with the Commissioner of Customs at Mumbai, pending an investigation by the DRI. The order of adjudication was also passed by the adjudicating authority at Mumbai who appears to have been appointed as a Common Adjudicator to adjudicate upon the show cause notices pertaining to New Delhi and Mumbai. The amount was appropriated in respect of the demand which emanated from the adjudication order in so far as it pertains to the Air Cargo Complex and CWC at New Delhi. In our view, there was absolutely no justification for the authorities to keep the refund application pending when the facts were not in dispute. The authorities have clearly stated in their letter dated 16 December 2009 that the CESTAT has by its order dated 29 August 2006 allowed the appeal of the Petitioners against the order of adjudication and that the Supreme Court has dismissed the appeal filed by the Department though on the ground of limitation. As a matter of fact, it was a bounden obligation of the Department itself to refund the amount due. There is merit in the submission that the Petitioners have been subjected to a considerable amount of protracted paper work which has not resulted in any resolution of the matter. The Central Board of Excise and Customs issued a Circular dated 8 September 2004 mandating that refund of deposit should be effected within a period of three months from the order of the Appellate Tribunal, Court or other final authority unless there is a stay granted by the Superior Court. In the present case, not merely was there no stay from the superior Court, but the appeal of the Department was dismissed by the Supreme Court.

We find no reason or justification for the Revenue to contend that the application for refund should be pursued with the Air Cargo Complex at New Delhi. The deposit having been made in Mumbai, the order of adjudication having been passed in Mumbai, and the order of appropriation having been issued by the adjudicating authority in Mumbai, the Customs authorities at Mumbai had sufficient jurisdiction to entertain the claim for refund. In that view of the matter, we quash and set aside the directions contained in the communication dated 15 November 2010 of the Central Board of Excise and Customs, directing that the refund claim be decided by the Commissioner of Customs (Export), ACC, Delhi. We direct that the refund claim shall be heard and disposed of by the Competent Authority under the jurisdiction of the Commissioner of Customs, Air Cargo Complex, Mumbai. Upon the passing of the requisite order, the amount, if any, there found to be due and payable to the Petitioners shall be refunded within a period of one month from the date of the passing of the order. We direct that the Competent Authority shall pass an order on the application for refund after furnishing to the Petitioners an opportunity of being heard within a period of six weeks from today in accordance with law. The Petition is accordingly disposed of. There shall be no order as to costs.