1/19 R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF OCTOBER 2017 BEFORE THE HON'BLE Dr. JUSTICE VINEET KOTHARI WRIT PETITION Nos.45551-45554 OF 2016 (T-TAR) BETWEEN:
M/s. Supertron Electronics Private Limited A Company incorporated under the Companies Act, 1956 Having its office at: 12/1, 1st Floor, CVR Building, Hosur Road Wilson Garden, Bangalore 560027 Represented herein by its Authorized Signatory Mr.Subodh Kumar (adult) …Petitioner (By Mr. Arun Srikumar, Adv., for Mr. Pradeep Nayak, Advocate) AND:
1. The Union of India Union of India, through the Secretary Ministry of Finance, Department of Revenue Having its office at Udyog Bhawan, New Delhi-110011 2. Principal Commissioner of Customs Office of the Principal Commissioner of Customs Airport & Air Cargo Commissionerate Menzies Bobba Cargo Terminal Devanahalli, Bengaluru 560300 3. Deputy Commissioner (Refunds) Office of the Principal Commissioner of Customs Airport & Air Cargo Commissionerate Menzies Bobba Cargo Terminal Devanahalli, Bengaluru 560300 4. Assistant Commissioner Office of the Principal Commissioner of Customs Airport & Air Cargo Commissionerate Menzies Bobba Cargo Terminal Devanahalli, Bengaluru 560300 5. Superintendent (Refunds) Office of the Principal Commissioner of Customs Airport & Air Cargo Commissionerate Menzies Bobba Cargo Terminal Devanahalli, Bengaluru 560300 …Respondents (By Mr. K.V.Aravind, Advocate for R2) These writ petitions are filed under Articles 226 and 227 of the Constitution of India praying to quash the impugned order in original passed by R-3 dated 31.5.2016 in OIO No.643/2016 (BACC Refunds) produced at Annexure-A1 and etc.
These writ petitions coming on for preliminary hearing this day, the Court made the following:
ORDER Mr.Arun Srikumar, Advocate for Mr.Pradeep Nayak, Advocate for Petitioner Mr.K.V.Aravind, Advocate for R2 The petitioner M/s. Supertron Electronics Private Limited had filed these writ petitions on 22.8.2016 with the following prayers.
a) Issue a Writ of Certiorari, or a Writ in the nature of Certiorari, or any other appropriate Writ, Order or direction, quashing the Impugned Order-in-Original passed by the Respondent No.3 dated 31.5.2016 in OIO No.643/2016 (BACC Refunds), produced at Annexure-A1;
b) Issue a Writ of Certiorari, or a Writ in the nature of Certiorari or any other appropriate Writ, Order or direction, quashing the impugned Order-in-Original passed by the Respondent No.3 dated 31.5.2016 in OIO No.643/2016 (BACC Refunds), produced at Annexure-A2;
c) Issue a Writ of mandamus, or a Writ in the nature of mandamus, or any other appropriate Writ, Order or directions, directing the Respondents to decide the claims of the Petitioner on merits;
d) Issue a writ of Prohibition, or a writ in the nature of Prohibition, or any other appropriate writ, order or direction restraining the Respondents No.1 to 5, their sub-ordinate, servants and agents from giving any effect and/or further effect to and/or acting on the basis of and/or in furtherance of the Impugned Orders dated 31.5.2016 pending the disposal of the writ petition;
e) For such further and other reliefs, as this Hon’ble Court may deem fit and proper in the nature and circumstances of the case.
2. In sequence from time to time, this Court had passed detailed interim orders in this case, after hearing both the sides. Such orders were passed by this Court on 20.9.2016, 9.12.2016, 15.12.2016 and 16.12.2016.
All the aforesaid orders are quoted below for ready reference:
“ORDER DATED 20.9.2016 1. These writ petitions are filed by the petitioner-company seeking a mandamus direction to the respondent to refund the amount due to the petitioner and to quash the order passed by the Deputy Commissioner (Refunds) of the respondent- Customs Department, whereby, the respondent- Authority in the first instance had rejected the refund applications of the petitioner-company seeking refunds of Rs.58,02,005/- and Rs.5,82,63,745/- respectively under the two orders, solely on the ground that, the refund of the duty due to the petitioner in accordance with the judgment of the Hon’ble Supreme Court in the case of SRF Limited vs. Commissioner of Customs, Chennai, rendered on 26.03.2015 in Civil Appeal No.9440/2003 was refused and not given on the ground that Review application was filed by the Customs Department before the Hon’ble Supreme Court against the aforesaid judgment dated 26.03.2015.
2. The said Review petition also came to be dismissed by the Hon’ble Supreme Court on 15.07.2016. But since, the respondents, suo- motu, did not take any action for refund of the aforesaid amounts due to the petitioner-company, the petitioner has approached this Court by way of filing these writ petitions under Article 226 of the Constitution of India.
3. The learned Counsel for the petitioner has relied upon the various case laws in support of his contention, the leading among them in the case of Yu Televentures Pvt. Ltd. Vs. Union of India in W.P.(C) No.6750/2016 recently decided by the Delhi High Court on 03.08.2016.
4. Prima-facie, this Court is of the opinion that the respondent-Department ought to have taken suo-motu action to refund the amount of duty due to the petitioner-company atleast after the rejection of their Review petition by the Hon’ble Supreme Court. Even otherwise, mere filing of the Review petition by the Department before the Hon’ble Supreme Court, perhaps could not justify the withholding and rejection of the refund applications by the petitioner-assessee, particularly, when there is no dispute from the side of the respondent-Department about the legal position that the facts of the present assessee, are squarely covered by the decision of Hon’ble Supreme Court in the case of SRF Limited (supra).
5. Therefore, the respondent-Department is called upon to show-cause as to why the responsibility should not be affixed on the erring officials of the respondent-Department in not taking the prompt action for making the refunds due to the petitioner-assessee, without requiring it to approach the court of law and why the costs of litigation incurred by the petitioner-assessee may not be recovered from such erring officials.
6. The petitioner-company may file a statement of expenses incurred by it for this litigation and the respondent-Department may show-cause before this Court by filing an appropriate statement of objections within a period of four weeks from today.
7. It is made clear that the pendency of this case and passing of this order, however, will not prevent the respondent-Department from making these refunds to the petitioner-company in the meanwhile and report the said fact to the Court on the next date.
List after four weeks, as prayed.
ORDER DATED 9.12.2016 It is surprising that the respondent-Deputy Commissioner (Refunds) Mr.Ravindra Joshi, has passed an order running into 23 pages refusing to refund the excess customs duty paid by the petitioner-assessee under protest, which became due to be refunded to it in pursuance of the judgment of the Hon’ble Supreme Court in the case of SRF Limited -versus- Commissioner of Customs, Chennai, decided on 26.03.2015, while holding that though the refund is due to the petitioner-assessee Company in terms of the said Supreme Court judgment and quantum was also determined, but taking shelter under Section 28-D of the Customs Act, 1962 in Chapter V-A, which applies only if the duty is paid under Section 28-C of the Act, which is not applicable in the present case, since the duty was paid at the rate of 12.5% under protest by the petitioner-assessee only awaiting the decision of the Supreme Court in the aforesaid case and once that decision came in favour of the petitioner-assessee in the case of SRF Limited, this Court in the previous order dated 20.09.2016 had clearly expressed that the respondent-authority can pass an appropriate order for refunding the excess customs duty paid by the petitioner-assessee.
The respondent-authority has shown audacity to refuse to refund on the ground that Section 28-D allows a presumption that the incidence of excess customs duty has been passed to the customers, whereas no such presumption is available to be drawn in the present case and no other evidence has been brought on record by the said authority to establish that such incidence has been passed by the petitioner Company to its customers.
This clearly amounts to contempt not only of this Court’s order but also the judgment of the Hon’ble Supreme Court indeed.
Let the respondent Mr.Ravindra Joshi, Deputy Commissioner (Refunds) along with the Chief Commissioner of Customs, having jurisdiction over the said authority remain present before this Court on next date and show cause as to why they should be punished for committing the contempt of the judgment of the Hon’ble Supreme Court in a surreptitious manner, by showing disregard to the clear and binding judgment upon him.
The learned counsel for the petitioner has also filed statement of costs incurred by the petitioner for litigation, in the present case. A sum of Rs.59,800/- is shown to be the costs incurred by the petitioner-Company.
The respondent-Mr.Ravindra Joshi, Deputy Commissioner (Refunds) is further directed to deposit the said amount of Rs.59,800/- from his personal resources before the next date of hearing with the Registrar of this Court.
Put up on 14.12.2016.
ORDER DATED 15.12.2016 1. The learned counsel for the Respondent has produced before the Court a copy of the orders, both dated 14/12/2016 passed by the Respondent No.3 - Mr.Ravindra Joshi, Deputy Commissioner (Refunds).
2. However, the learned counsel appearing for the petitioner – Company informed the Court that by virtue of the orders passed by the Respondent – Deputy Commissioner, (Refunds), both dated 14/12/2016, refund amounts of Rs.5,82,63,745/- and Rs.58,02,005/- respectively have not yet been credited to the Bank Account of the petitioner – Company, the details of which have been given to the Respondent’s counsel.
3. He also submitted that the tenor of the aforesaid orders dated 14/12/2016 superseding the previous order is not in good taste and intentionally seeks to put the Court’s observations as the reason for passing the same rather than correcting their own mistake.
4. A sum of Rs.5,82,63,745/- and Rs.58,02,005/- may be credited to the Bank Account of the petitioner-Company forthwith and a report in this regard may be furnished to this Court on 16-12-2016.
Put up on 16-12-2016 at 10:30 A.M.
The Officers to again remain present before the Court on the next date.
ORDER DATED 16.12.2016 Learned counsel for respondents submits that refund amount in question has been credited in the bank account of the petitioner-Company.
Learned counsel for petitioner also submits that refund amount due to the petitioner has been credited. However, he further claimed that interest part has not been paid. That question will be decided later on.
Learned counsel for respondents also prays for some time to file affidavits of both the officers of Respondents-Custom Department, namely, Chief Commissioner of Customs and Deputy Commissioner (Refunds) in pursuance of the order passed by this Court earlier on 20th September 2016, initiating contempt proceedings against them.
Time prayed for is allowed.
List again on 11.1.2017. Presence of the officers is dispensed with for the time being, subject to further orders.”
3. Finally, the respondent Deputy Commissioner (Refunds) Mr. Ravindra Joshi passed the following refund order on 14.12.2016. The said order is also quoted hereinbelow:
“I hereby sanction refund amount of Rs.5,82,63,745/- (Rupees Five Crore Eighty Two Lakh Sixty Three Thousand Seven Hundred and Forty Five only) to M/s. Supertron Electronics Limited, 12/1, 1st Floor, CVR Building, Hosur Road, Wilson Garden, Bengaluru – 560 027.”
4. In compliance with the directions of this Court to show cause as to why contempt action should not be initiated against the respondent official for apparently not complying with the judgment of the Hon’ble Supreme Court in the case of SRF LIMITED Vs COMMISSIONER OF CUSTOMS in CIVIL APPEAL NO.9440/2003 decided on 26.3.2015 against which the review petition filed by the Customs Department was also dismissed by the Hon’ble Supreme Court on 15.7.2016, though the duty paid by the petitioner assessee under protest came to be refunded by the said official only vide order dated 14.12.2016 and such amount of refund were credited in the account of the petitioner only on 16.12.2016, but neither the interest payable on such delayed refund had been paid to the petitioner assessee in view of Section 27A of the Customs Act, 1962, which is quoted below nor conduct of the said official is above board, as he is still seeking to reserve with him, the right of investigation in the matter about the incidence of the said duty under protest, as to whether the incidence of duty has been passed on to the customers or not and whether such refund is unjust enrichment of the petitioner or not. This is an effort on the part of the respondent official showing the scant respect to the Hon’ble Supreme Court’s judgment, which binds all the Courts, Tribunals and Authorities in the Country.
“27A. Interest on delayed refunds If any duty ordered to be refunded under sub- section (2) of section 27 to an applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below 5% and not exceeding 30% per annum as is for the time being fixed by the Central Government, by notification in the Official Gazette, on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty:
PROVIDED that where any duty, ordered to be refunded under sub-section (2) of section 27 in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty.”
5. The respondent Deputy Commissioner Mr.
Ravindra Joshi, in the order passed by him on 14.12.2016 quoted above, has himself stated in paragraph No.8 that “such an exercise having not been undertaken, the amount claimed by the petitioner requires to be refunded forthwith……..” In view of this, any effort on the part of the respondent Official, to even now make an effort to do so with reservations, will be in the breach of the decision of the Hon’ble Supreme Court and the refund order passed by the authority himself.
6. As to why contempt action should not be taken against them, the respondent officials, namely, Deputy Commissioner and the Chief Commissioner of Customs have filed their Affidavits dated 6.1.2017 and paragraph Nos.7 and 3 and 4 of both the Affidavits are quoted below, one filed by Mr. Ravindra Joshi, S/o Mr. Jagatram Joshi, Deputy Commissioner of Customs (Refunds), Bangalore and Mr. Rajiv Bhushan Tiwari, S/o B.V. Tiwari working as Chief Commissioner of Customs, Bangalore Zone, Bangalore.
Affidavit of Mr. Ravindra Joshi “7. I submit that none of my actions were intended to disobey the orders of this Hon’ble Court or to lower the Majesty of this Hon’ble Court. I have highest regards to this Hon’ble Court and I would not act in a way so as to deviate from any orders passed by this Hon’ble Court. I offer my unconditional apology to this Hon’ble Court which may be kindly accepted. I humbly request to consider the order directing me to deposit the cost (which is already complied with) having regard to the fact that I took charge of the office on 22.10.2016.
Affidavit of Mr. Rajiv Bhushan Tiwari 3. However, pursuant to the order dated 14.12.2016 passed by this Hon’ble Court, the Deputy Commissioner of Customs (Refunds) reconsidered the earlier order and passed another order 14.12.2016 sanctioning refund of the amount and the same stands credited to the account of Petitioner Company by way of RTGS remittance vide Cheque No.982434 dated 15.12.2016.
4. I submit that none of my actions were intended to disobey the orders of this Hon’ble Court or to lower the Majesty of this Hon’ble Court. I have highest regards and I would not act in a way so as to deviate from any orders passed by this Hon’ble Court. I offer my unconditional apology to this Hon’ble Court which may be kindly accepted.”
7. The said officer, Deputy Commissioner, Mr.
Ravindra Joshi, is also said to have deposited the cost of litigation as earlier directed by this Court amounting to Rs.59,800/- with the Registrar General of this Court on 15.12.2016.
8. Having heard the learned counsel for the parties and in view of the aforesaid, this Court is not inclined to take a lenient and casual approach in the matter, as the respondent officials cannot be allowed to go around and bypass the binding precedent of the Hon’ble Supreme Court in such matters and since the amount in question was paid by the petitioner clearly ‘under protest’, from their own resources awaiting the decision of the Hon’ble Supreme Court at that point of time, there was no question of allowing any further enquiry at the end of said Deputy Commissioner and refuse the refund on that ground. The amount actually was refunded after the order dated 14.12.2016 was passed by the respondent Deputy Commissioner, Mr. Ravindra Joshi but the tenor of the said order as well as the Affidavit filed in respect of the contempt notices issued by this Court, do not fully satisfy and in inspire any confidence that the respondents, in letter and spirit abide by the judgment of the Hon’ble Supreme Court and still seek a refuge from this Court to keep open for them to hold an enquiry in the matter, which cannot be permitted.
9. The petition is therefore disposed of with the following directions:
(i) The cost of litigation amounting to Rs.59,800/- deposited by the respondent Deputy Commissioner (Refunds) shall stand forfeited and the same be made over to the petitioner - company as costs.
(ii) The respondent Department shall further pay the costs of Rs.1 lakh to the petitioner as damages for their unnecessary and casual approach in trying to avoid the benefit of the binding precedent of the Supreme Court decision to the petitioner Company.
(iii) The respondent Deputy Commissioner will determine the quantum of interest payable to the petitioner under Section 27A of the Act on such refund made to the petitioner from the date of deposit till the date of refund, within the period of one month from today and pay the same to the petitioner Company and a compliance report will be submitted in this court.
(iv) In view of the refund actually made now to the petitioner upon the considered order passed by the respondent himself holding the petitioner company entitled to the refund and refund having been made, no further enquiry in the matter at the end of Deputy Commissioner is justified.
(v) The respondents are not being punished under the contempt law for the time being, in view of the refund of the custom duty already made to the petitioner company, with a note of caution to them in that regard, for their future discharge of duties and for abiding by the binding precedents of constitutional courts in true letter and spirit.
Sd/- JUDGE MD