M/s. O.N.G.C. Ltd. Vs. Commnr. of Customs, Mumbai
EmailAppeal: I.A. No. 4 in Civil Appeal No. 1882 of 2004
With I.A. No. 4 in Civil Appeal No. 854 of 2005
[From the final Order Nos. C-II/32-19/WZB/2003 dated 09.12.2003 in Appeal No. 51/2002 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai)
With I.A. No. 4 in Civil Appeal No. 854 of 2005
[From the final Order Nos. C-II/32-19/WZB/2003 dated 09.12.2003 in Appeal No. 51/2002 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai)
Petitioner: M/s. O.N.G.C. Ltd.
Respondent: Commnr. of Customs, Mumbai
Apeal: I.A. No. 4 in Civil Appeal No. 1882 of 2004
With I.A. No. 4 in Civil Appeal No. 854 of 2005
[From the final Order Nos. C-II/32-19/WZB/2003 dated 09.12.2003 in Appeal No. 51/2002 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai)
With I.A. No. 4 in Civil Appeal No. 854 of 2005
[From the final Order Nos. C-II/32-19/WZB/2003 dated 09.12.2003 in Appeal No. 51/2002 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai)
Judges: S.B. Sinha & Markandey Katju, JJ.
Date of Judgment: Aug 01, 2007
Appearances:
Mr. S. Ganesh, Senior Advocate, Mr. Shiv Prakash Pandey, Ms. Rekha Pandey and Mr. Raj Kumar Tanwar, Advocates with him for the Appellant.
Mr. Rajiv Dutta, Senior Advocate, Mr. M.F. Humayunisa, Mr. Subba Rao and Mr. B. Krishna Prasad, Advocates with him for the Respondent.
Mr. Rajiv Dutta, Senior Advocate, Mr. M.F. Humayunisa, Mr. Subba Rao and Mr. B. Krishna Prasad, Advocates with him for the Respondent.
Head Note:
CUSTOMS DUTY
Customs duty – Public sector corporation wholly owned by Central Government obtaining information on oil exploration from foreign company on payment of consideration – Customs department realizing customs duty – Ultimately corporation succeeding before Supreme Court and consequently receiving refund of the customs duty recovered earlier – Corporation claiming interest on the refund. Held that in equity the corporation is entitled to receive interest on the refunds. Respondent directed to pay interest at the rate of 6 per cent. (Para 6)
Customs duty – Public sector corporation wholly owned by Central Government obtaining information on oil exploration from foreign company on payment of consideration – Customs department realizing customs duty – Ultimately corporation succeeding before Supreme Court and consequently receiving refund of the customs duty recovered earlier – Corporation claiming interest on the refund. Held that in equity the corporation is entitled to receive interest on the refunds. Respondent directed to pay interest at the rate of 6 per cent. (Para 6)
Cases Reffered:
1. Mcdermott International Inc. v. Burn Standard Co. Ltd. and Ors. [JT 2006 (11) SC 376] (Para 6)
2. Pure Helium India (P) Ltd. v. Oil and Natural Gas Commission [JT 2003 (Suppl. 2) SC 596] (Para 6)
3. South Eastern Coalfields Ltd. v. State of M.P. and Others [JT 2003 (Suppl. 2) SC 443] (Para 4)
2. Pure Helium India (P) Ltd. v. Oil and Natural Gas Commission [JT 2003 (Suppl. 2) SC 596] (Para 6)
3. South Eastern Coalfields Ltd. v. State of M.P. and Others [JT 2003 (Suppl. 2) SC 443] (Para 4)
JUDGEMENT:
S.B. SINHA, J.
1. Appellant is a public sector undertaking wholly owned and controlled by the Central Government. It obtained the services of M/s. SEDCO Forex Int. Drilling Inc. for obtaining requisite information which would assist it in the matter of exploration of oil and gas. The information so gathered was recorded in 3-D Seismic Tapes. An exemption was claimed by the appellant from payment of custom duty in terms of an exemption notification issued by the Central Government in that behalf. As despite such claim, assessment proceedings were initiated and completed, the matter came upto this Court and by a judgment and order dated 24.08.2006, contention of the appellant was accepted by this court and the orders of assessment were set aside.
2. During pendency of the Civil Appeals before this Court, a sum of Rs. 54,72,87,536.00 was realized by way of custom duties and interest thereon, etc. as per the following details:
‘(i) 14.09.2004 Rs.25,00,00,000.00 adjusted towards duty
(ii) 30.03.2004 Rs. 17,72,87,536.00 appropriated towards interest
(iii) 24.02.2005 Rs. 12,00,00,000.00 adjusted towards interest
Total Rs. 54,72,87,536.00′
3. An application has now been filed for a direction to the respondent to pay interest on the said sum with effect from the date of recovery till the date of the appellant.
4. Mr. S. Ganesh, learned senior counsel appearing on behalf of the Appellant, would submit that keeping in view the fact that the appellant had to deposit a huge amount during pendency of the Civil Appeals, interest of justice would be met if this Court directs the respondent to pay interest at the rate of 12% per annum on the said amount. It was submitted that interest should be directed to be paid by way of restitution, as has been held by this Court in South Eastern Coalfields Ltd. v. State of M.P. and Others1.
5. Mr. Rajiv Dutta, learned senior counsel appearing on behalf of the respondent, on the other hand, would submit that the central Government did not make any investment of the amount received by it by way of indirect tax but expended the same for the welfare of the people and, thus, no interest should be directed to be paid in the instant case.
6. Appellant is a public sector undertaking. Respondent is the Central Government. We agree that in principle as also in equity the appellant is entitled to interest on the amount deposited on application of principle of restitution. In the facts and circumstances of this case and particularly having regard to the fact that the amount paid by the appellant has already been refunded, we direct that the amount deposited by the appellant shall carry interest at the rate of 6% per annum. Reference in this connection may be made to Pure Helium India (P) Ltd. v. Oil and Natural Gas Commission2 and Mcdermott International Inc. v. Burn Standard Co. Ltd. and Ors.3.
7. Respondent, therefore, is directed to pay a sum of Rs. 9,51,21,999.50/- by way of interest. Such amount should be paid within a period of six weeks from date. The application is disposed of accordingly. No costs.
1. Appellant is a public sector undertaking wholly owned and controlled by the Central Government. It obtained the services of M/s. SEDCO Forex Int. Drilling Inc. for obtaining requisite information which would assist it in the matter of exploration of oil and gas. The information so gathered was recorded in 3-D Seismic Tapes. An exemption was claimed by the appellant from payment of custom duty in terms of an exemption notification issued by the Central Government in that behalf. As despite such claim, assessment proceedings were initiated and completed, the matter came upto this Court and by a judgment and order dated 24.08.2006, contention of the appellant was accepted by this court and the orders of assessment were set aside.
2. During pendency of the Civil Appeals before this Court, a sum of Rs. 54,72,87,536.00 was realized by way of custom duties and interest thereon, etc. as per the following details:
‘(i) 14.09.2004 Rs.25,00,00,000.00 adjusted towards duty
(ii) 30.03.2004 Rs. 17,72,87,536.00 appropriated towards interest
(iii) 24.02.2005 Rs. 12,00,00,000.00 adjusted towards interest
Total Rs. 54,72,87,536.00′
3. An application has now been filed for a direction to the respondent to pay interest on the said sum with effect from the date of recovery till the date of the appellant.
4. Mr. S. Ganesh, learned senior counsel appearing on behalf of the Appellant, would submit that keeping in view the fact that the appellant had to deposit a huge amount during pendency of the Civil Appeals, interest of justice would be met if this Court directs the respondent to pay interest at the rate of 12% per annum on the said amount. It was submitted that interest should be directed to be paid by way of restitution, as has been held by this Court in South Eastern Coalfields Ltd. v. State of M.P. and Others1.
5. Mr. Rajiv Dutta, learned senior counsel appearing on behalf of the respondent, on the other hand, would submit that the central Government did not make any investment of the amount received by it by way of indirect tax but expended the same for the welfare of the people and, thus, no interest should be directed to be paid in the instant case.
6. Appellant is a public sector undertaking. Respondent is the Central Government. We agree that in principle as also in equity the appellant is entitled to interest on the amount deposited on application of principle of restitution. In the facts and circumstances of this case and particularly having regard to the fact that the amount paid by the appellant has already been refunded, we direct that the amount deposited by the appellant shall carry interest at the rate of 6% per annum. Reference in this connection may be made to Pure Helium India (P) Ltd. v. Oil and Natural Gas Commission2 and Mcdermott International Inc. v. Burn Standard Co. Ltd. and Ors.3.
7. Respondent, therefore, is directed to pay a sum of Rs. 9,51,21,999.50/- by way of interest. Such amount should be paid within a period of six weeks from date. The application is disposed of accordingly. No costs.
