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TMI Blog2010 (9) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... judication order dated 29th August, 2006. 2. The relevant facts of this case are that on 29th December, 2004, cash amounting to Rs. 18,00,000/- and ten bank drafts amounting to Rs. 1,71,327/- were seized by the respondent from petitioners under Section 110 of the Customs and Excise Act, 1962 (hereinafter referred to as 'the Act') on the belief that they were liable for confiscation under Section 121 of the Act, as made applicable to the central excise matters vide notification No. 68/63 CE dated 4th May, 1963. It is the respondent's case that currency and bank drafts were seized as the petitioners were unable to explain their possession. 3. However, show cause notice was adjudicated vide Order No.16/JC/D-1/2006 dated 29th August, 2006 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of Rs. 18,00,000/- and the bank drafts amounting to Rs. 1,71,362/-, which have been ordered to be released vide adjudication order bearing order in original no. 16/JC/D-I/2006 dated 29th August, 2006, w.e.f. 29th December, 2004, the date of the recovery and taking into possession of the said amount and/or (b) pass any other order as may be deemed fit and proper in the interest of justice." 7. Mr. Shailesh V. Sharma, learned counsel for petitioners submitted that the present case was a glaring example of unjust enrichment on the part of the respondent. He further submitted that the respondent was liable to pay interest for the period it had unlawfully seized the petitioners' cash and bank drafts. 8. Mr. S.C. Aggarwala, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance to the Central Excise Act or rules framed thereunder. According to him, since seizure was directed on the basis of powers conferred by law, no malafides could be attributed to the respondent in seizing the currency. Therefore, according to him, the prayer of petitioners for grant of interest could not be granted. 12. Having heard learned counsel for the parties and having perused the file, we are of the opinion that the dismissal of WP(c) 21072/2005 would not operate as res judicata because the adjudication order directing refund of amounts to the petitioners was passed subsequent to the filing of the said writ petition. 13. However, in the appeal filed by M/s. Sushi Chem & Plastic Industries before the Commissioner, Central Excise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the State on account of its having made illegal exactions. We do not consider it proper to extend the principle justifying the consequential order directing the refund of amounts illegally realised, when the order under which the amounts had been collected has been set aside, to cases in which only order for the refund of money are sought. The parties had the right to question the illegal assessment orders on the ground of their illegality or unconstitutionality and therefore could take action under Article 226 for the protection of their fundamental right, and the courts, on setting aside the assessment orders, excerised their jurisdiction in proper circumstances to order the consequential relief for the refund of the tax illegally rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction."(emphasis supplied) 16. Subsequently, the Supreme Court in Union of India & Ors v. M/s. Orient Enterprises & Anr. (1998) 3 SCC 501 has held as under:- "6. In Suganmal this Court has laid down that a writ petition under Article 226 of the Constitution solely praying for the issue of a writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax. This Court has made a distinction between a direction for refund given by way of consequential order in a case where the legality of the assessment is questioned and a case where the petition is only for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed payment of duty by a person who is liable to pay the duty. Thus at relevant time there was no statutory right entitling the respondents to payment of interest on delayed refund and the writ petition filed by them was not for the enforcement of a legal right available to them under any statute. The claim for interest was in the nature of compensation for wrongful retention by the appellants of money that was collected from the respondents by way of customs duty, redemption fine and penalty. In view of the law laid down by this Court in Suganmal a writ petition seeking the relief of payment of interest on delayed refund of the amount so collected could not, in our opinion, be maintained. The decisions on which reliance has been placed by S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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