IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6223  OF 2008 (Arising out of S.L.P.(C) No.26139/2008)

(CC No.625/2008)

Commissioner of Customs, Kolkata ...Appellant(s)

Versus

M/s. B. Arun Kumar & Company & Ors. ...Respondent(s)

O R D E R

Delay condoned.

Leave granted.

By  Commissioner's  Order  dated  30th October,  1986,  redemption  fine  of

Rs.85 lakhs and penalty of Rs.15 lakhs came to be imposed.  Against the said order,

the assessee (respondent herein) filed an appeal before CEGAT.  The Revenue also

moved  cross  appeal/cross  objection  before  the  Tribunal.   Pursuant  to  the

Commissioner's order, the assessee deposited Rs.45,59,733/- in cash.  For the balance

amount, bank guarantee was furnished.  

On  30th April,  1990,  the  Tribunal  passed  Order  No.154-Cal/1990-154

allowing the assessee's appeal.  By the said order, Revenue was directed to refund the

redemption fine and penalty within thirty days and in default the Department was

liable to pay interest at the rate of 12%.  We quote hereinbelow the operative part of

the order passed by the Tribunal, which reads as under:

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“In  the  result,  the  appeal  of  M/s.  B.Arun  Kumar & Co.,  Bombay, succeeds.  The impugned order passed by the learned Collector dated 31.10.86  is  hereby set  aside.   We hereby  direct  the  respondents  to refund  the  redemption  fine  and  penalty  paid  by  the  Appellants  in terms of the above-said order within a period of one month from the date of  receipt  of  this  order.   In  the event  of  the Respondent's  not refunding the amounts within the above-said period of one month the same shall carry interests @ 12% per annum from the expiry of the above  period.   We  also  direct  the  Registry  to  transfer  the  cross Objection  to  the  Special  Bench,  CEGAT,  Delhi,  for  disposal  in accordance with law along a copy of this order.”

On 29th October, 1990, CEGAT dismissed Reference Application filed by

the Department. It refused to refer certain questions arising in the matter to the High

Court.  Thereafter, on the Revenue's Application (marked as Matter No.1104/1991),

the Calcutta High Court made the rule absolute on two questions which are as under:

“1.  Whether on the facts and in the circumstances of the case, the Tribunal was right in law in setting aside the order of Collector dated 31st October 1986 and directing the refund with interest?

2.  Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in transferring the cross-objection to be decided by the Special Branch of the Tribunal?”

By minutes of the Order dated 17th June, 1991, CEGAT was directed by the

High Court to submit “Statement of Case” within three months.    

By Order dated 21st August, 1991, CEGAT stayed its order dated 30th April,

1990  for  refund  of  redemption  fine  and  penalty  with  interest  till  disposal  of  the

Reference by the High Court.   

The assessee herein requested for refund of the amounts deposited by it

vide  letter  dated  23rd October,  1999,  which  was  surprisingly  granted  by  the

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Department on 11th July,  2000 even when the Reference was pending in the High

Court.   No  appeal  was  filed  by  the  Department  against  the  grant  of  refund  of

Rs.45,59,733/-.  The assessee received the said amount of Rs.45,59,733/-.

Thereafter, the assessee moved an application before the Tribunal (marked

as MA-193/02) claiming interest on the principal amount refunded to it on 11th July,

2000.   This  application  was  disposed  of  by  the  Tribunal  vide  order  dated  19th

December, 2002 by which the Commissioner was directed to decide on the application

for interest as calculated and claimed by the assessee.  The Commissioner rejected the

claim for interest vide order dated 12th May, 2003.  This order was challenged by the

assessee by filing Writ Petition No.12027(W) of 2003.  The Writ Petition was allowed

by  the  learned  Single  Judge  which  stood  confirmed  by  the  Division  Bench  vide

impugned judgment.  Hence, this Civil Appeal by the Department.

On 19th August, 2008, this Court passed the following order:

“Pending  further  orders,  we  are  directing  the  respondent herein,  M/s.  B.Arun  Kumar  &  Co.,  to  deposit  in  this  Court Rs.45,00,000/- (Rupees forty five lakhs)  together with interest at nine per cent per annum from 11th July, 2000 till the date of deposit, within eight weeks.

Office is directed to list the matter immediately on Board on deposit of the said amount.  Matter to be listed on non-miscellaneous day.  This Court will pass further direction only on such deposit.  The Department has filed a further affidavit today.  That affidavit may be taken on record.  Liberty is granted to the assessee to file its counter, if so advised, within three weeks.”

The  above-quoted  order  came  to  be  passed  because  the  status  of  the  pending

Reference Application  was  not  known.   It  is  only  in  the  course  of  enquiry  made

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during the pendency of this Civil Appeal that we have now come to know that the

Department's  Application (marked as Matter No.1104/1991) was made absolute on

17th June, 1991 as stated above.  Therefore, even today, as can be seen from the order

dated 17th June, 1991, the Department's Reference is still pending before the High

Court.  In fact, by order dated 21st August, 1991, the Tribunal had, inter alia, stayed

the order of refund dated 30th April, 1990 till disposal of the Reference by the High

Court.  It is in these circumstances that we had directed respondent-assessee herein to

deposit  in  the  Registry  of  this  Court  Rs.45,00,000/-  together  with  interest  at  9%

interest  from  11th July,  2000  (being  the  date  on  which  the  respondent-assessee

received Rs.45,00,000/-).

The  respondent-assessee  has  complied  with  the  directions  of  this  Court

contained in the order dated 19th August, 2008.  The assessee has deposited a sum of

Rs.79,36,058.52  vide  Demand  Drafts  favouring  the  Deputy  Registrar

(Administration),  Supreme Court  of  India,  as  indicated  in  its  affidavit  dated  11th

October, 2008 (see page 88 of the paper book).

In the above circumstances, without expressing any opinion on the merits of

the case, we issue the following directions:

a) The Tribunal is directed to forward the Statement of Case in the pending

Reference (marked as Matter No.1104/1991) within a period of twelve weeks.  In this

connection, we direct the Department to submit its draft Statement of Case before the

Tribunal within six weeks before the Tribunal.

b) On receipt of the draft Statement of Case within six weeks, the Tribunal

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will take steps to forward the Statement of Case to the High Court.   

Since  the  matter  is  pending  from  1991,  we  request  the  High  Court  to

expeditiously decide the said Reference within three months from the receipt of the

Statement of Case.

c) We  direct  the  Registry  of  this  Court  to  transfer  the  said  amount  of

Rs.79,36,058.52  to  the  Registrar  (Original  Side),  Kolkata  High  Court  within  four

weeks.   

d) The Registrar (Original Side), Kolkata High Court is directed to invest the

said sum in fixed deposit of a Nationalized Bank on such terms and conditions as he

deems fit.  If the Department wants the amount to be withdrawn, it will make an

application to the Kolkata High Court for appropriate directions.

e) All contentions on both sides are expressly kept open.

Subject to above, Civil Appeal filed by the Department stands disposed of

subject to respondent paying Rs.25,000/- as costs condition precedent.

                         ...................J.               (S.H. KAPADIA)

                        ...................J.

                                       (B. SUDERSHAN REDDY) New Delhi, October 22, 2008.

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