M/S GARGA STEEL INDUSTRIES V. COMMISSIONER OF CUSTOMS AND ANR.

CUSAP/21/2006

AI Insights

The case involves M/s Garga Steel Industries, the appellant, who contested the decision of the Customs, Excise and Service Tax Appellate Tribunal regarding the refund of customs duty on damaged imported goods. The appellant had initially deposited the customs duty under protest and sought a refund after a surveyor assessed the damage. The refund was repeatedly denied at various levels until the Tribunal finally ordered a partial refund, which did not include interest for the delay in refunding the duty. The appellant appealed against this decision, leading to the High Court's intervention, which granted interest on the delayed refund based on Supreme Court precedents.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 742749 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 09-01-2009
• Assessment Year: misc
• Other Referred Cases: Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune, 2006 (196) E.L.T. 257 (S.C.)
• Laws Referred To: Customs Act, 1962
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MUNISH JOLLY
• Assessee Lawyers: JAGMOHAN BANSAL
• Keywords: Customs Duty; Interest on Delay; Natural Justice; Refund; Surveyor Assessment
• Section: 22; 27; 28; 130

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.U.S.A.P. No. 21 of 2006 DATE OF DECISION: January 9, 2009 M/s Garga Steel Industries …Appellant Versus Commissioner of Customs, Mumbai and another …Respondents CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE H.S. BHALLA Present: Mr. Jagmohan Bansal, Advocate, for the appellant. Mr. Munish Jolly, Advocate, for the respondents. 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? M.M. KUMAR, J. This is assessee’s appeal under Section 130 of the Customs Act, 1962 (for brevity, ‘the Act’) against the order dated 17.11.2005 (P-10), passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity, ‘the Tribunal’) in Appeal C.U.S.A.P. No. 21 of 2006 No. C/592/203. The appellant has sought to raise the following substantial questions of law for determination by this Court:- “i. Whether the market price determined by surveyor is cum (?) duty? ii. Whether the appellant is entitled to interest on the delayed refund of duty? iii. Whether the Tribunal has passed the impugned order in violation of principle of natural justice?” Brief facts of the present case are that the appellant imported a variable induction furnance equipment vide bill of entry dated 22.1.1979. The goods were kept in a warehouse and ex-bond bill of entry was filed on 10.4.1982. On 15.4.1982, it was found by the appellant that the imported goods were in damaged condition. Accordingly, request was made to the surveyor for conducting survey for claiming abatement of duty under the provisions of Section 22 of the Act. Permission for survey was granted on 16.4.1982 and survey report was submitted on 23.4.1982 assessing the value of the imported goods at Rs. 3.5 lacs (P-1). However, on 22.4.1982, the appellant deposited customs duty amounting to Rs. 5,23,471/- and interest of Rs. 48,211/- under protest. On the basis of the survey report, the appellant filed refund claim with the Assistant Commissioner Customs (Refund) Bombay, which was rejected vide order dated 24.1.1985 (P-2). On appeal, the Commissioner of Customs (Appeals) Bombay, vide order dated 10.10.1986, remanded the matter back to the Assistant 2 C.U.S.A.P. No. 21 of 2006 Commissioner for fresh decision (P-3). The refund application was again rejected vide order dated 27.2.1987. Again appeal was filed but this time the Commissioner of Customs (Appeals) Bombay rejected the same vide his order dated 30.9.1987. Feeling aggrieved, the appellant preferred further appeal before the Tribunal in the year 1987, which was allowed by the Tribunal on 6.2.1996. The matter was again remanded to the Assistant Commissioner for deciding the claim within a period of four months (P-4). On 26.5.1997, again directions were issued by the Tribunal to the Assistant Commissioner to decide the matter (P-5). On 26.6.1997, the Assistant Commissioner (Customs) for the third time again rejected the claim of the appellant on similar grounds on which it was earlier rejected. The matter again went to the Tribunal and vide order dated 15.12.1997, the Tribunal directed the Assistant Commissioner to refund the amount of duty claimed by the appellant taking into account the value of the damaged goods as assessed by the Surveyor (P-6). Accordingly, a refund of Rs. 3,16,777/- has been allowed instead of Rs. 4,71,120/- alongwith interest as claimed by the appellant. Again appeal was filed by the appellant and the Appellate Authority-cum-Commissioner (Appeals) came to the conclusion that it was a case of delay in refund and the appellant was entitled to interest. The Appellate Authority, thus, directed the Assistant Commissioner to decide the issue whether the value 3 C.U.S.A.P. No. 21 of 2006 assessed by the Surveyor includes customs duty or not, vide his order dated 28.3.2000 (P-7). The claim of the appellant was again rejected by the Assistant Commissioner vide his order dated 21/26.6.2000, holding that correct amount of refund has been given and that the appellant is not entitled to interest under Section 27 of the Act (P-8). The appeal against the order dated 21/26.6.2000, was partly rejected by the Commissioner (Appeals) vide order dated 13.5.2003, holding that the value assessed by the Surveyor did not include custom duty and also rejected the claim with regard to interest. However, the order of the adjudicating authority for recovery of refund under Section 28 of the Act was set aside (P-9). Further appeal preferred by the appellant before the Tribunal was also rejected vide order dated 17.11.2005 (P-10), which is subject matter of challenge in the present appeal. At the hearing, learned counsel for the appellant has confined his prayer for grant of interest from the date of order dated 6.2.1996 to the date of actual refund i.e. 23.11.1998. In support of his submission, learned counsel has placed reliance on a judgment of Hon’ble the Supreme Court in the case of Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune, 2006 (196) E.L.T. 257 (S.C.). However, learned counsel for the respondents has placed reliance on a order of the Tribunal wherein reference has been made to the amendment made in Section 28(A) of the Act in the year 1995 4 C.U.S.A.P. No. 21 of 2006 and detailed reasons have been given for not granting interest to the appellant. Having heard learned counsel for the parties, we find that the Tribunal should have awarded interest from the date of order i.e. 6.2.1996 till the actual date of refund i.e. 23.11.1998. Accordingly, following the judgment of Hon’ble the Supreme Court in the case of Sandvik Asia Ltd (supra), we accept the prayer of the appellant to the extent that simple interest be awarded @ 10% per annum from the date of order i.e. 6.2.1996 to the actual date of refund i.e. 23.11.1998. The needful shall be done within a period of two months from the date of receipt of copy of this order. The appeal stands disposed of in the above terms. (M.M. KUMAR) JUDGE (H.S. BHALLA) January 9, 2009 JUDGE KD/Pkapoor 5 "