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2015 (11) TMI 35 - SUPREME COURT

2015 (11) TMI 35 - SUPREME COURT - 2015 (324) E.L.T. 702 (SC) - Denial of refund claim - Unjust enrichment - recovery of duty by encashment of the Bank Guarantee - earlier stay order was vacated due to failure comply with stay order - Held that:- It is only ₹ 17.50 lakhs which was deposited by the appellant pursuant to the interim orders of the Court. The Court had directed the appellant to deposit ₹ 70 lakhs. As far as the balance amount is concerned that could not be deposited. It .....

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to be decided in the light of the doctrine of unjust enrichment which was clearly applicable - Decided against assessee. - Civil Appeal No. 987/2007 - Dated:- 23-9-2015 - Mr. A.K. Sikri And Mr. Rohinton Fali Nariman, JJ For the Petitioner : Mr. S. Vasudevan, Adv., Mr. V. Lakshmikumaran, Adv., Mr. M. P. Devanath, Adv., Ms. L. Charanaya, Adv., Ms. Nupur Maheshwari, Adv., Mr. Hemant Bajaj, Adv., Mr. R. Ramachandran, Adv. And Mr. Aditya Bhattacharya, Adv. For the Respondent : Mr. K. Radhakrishnan, .....

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upon the appellant to pay the duty. Without paying this duty, the appellant approached the High Court of Gujarat by way of writ petition with the prayer that the appellant be allowed to get the said machinery released on payment of admitted amount of duty. On this writ petition, interim orders dated 04.05.1992 were passed permitting the appellant to deposit a sum of ₹ 70 lakhs as a condition for utilizing the machinery. We may record here that the appellant had earlier furnished the Bank .....

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and commission it, we direct the applicant to start paying ₹ 70,00,000/- from 1st August, 1992, in four equal monthly installments. The bank guarantee, which the applicant is required to continue, will have to be reduced to the extent installments are paid by the applicant. The respondents will be at liberty to withdraw the amount that may be deposited by the applicant in this Court on condition that whenever called upon to do so; they will repay that amount within the time that may be sp .....

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er and permitted the Customs Authorities to encash the Bank Guarantee. The relevant portion of the said order reads as under:- In the result it is clarified and directed that the interim relief granted earlier has stood vacated pursuant to the order passed by this Court on September 18, 1992 inasmuch as the Company has not deposited the amount of ₹ 70 lakhs as agreed and directed. It is further directed that the Union of India, Collector of Customs, Ahmedabad, and Assistant Collector of Cu .....

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the special leave petition against the said order which was also dismissed by this Court on 10.09.1993, inter alia, observing that it was not a case for interference with the order of the High Court as the appellant had defaulted in the matter of payment of installments. The Bank Guarantee was, however, encashed to cover the amount up to ₹ 70 lakhs, as for encashment of the Bank Guarantee for the remaining amount, the Tribunal had granted stay which course of action was permitted by this .....

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ent would apply and since the appellant could not satisfied the authorities that the burden was not passed on the ultimate consumers, the appellant was not entitled to refund. Against the order, the appellant approached the High Court. The High Court has, by the impugned judgment dated 15.12.2005, allowed the refund to the extent of ₹ 17.50 lakhs and rejected the prayer for the refund of balance amount of ₹ 23,98,178/-. The High Court has held that insofar as the amount of ₹ 17 .....

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ed and upon that, the interim orders were vacated and as a consequence thereof, the Department had encashed the Bank Guarantee. Therefore, insofar as this amount is concerned, doctrine of unjust enrichment was applied. Against this order, the present special leave petition was filed in which leave was granted and that is how the present appeal arises for consideration as to whether the High Court order rejecting the refund in the sum of ₹ 23,98,178/- is valid or not. It cannot be disputed .....

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