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2015 (11) TMI 376 - SUPREME COURT

2015 (11) TMI 376 - SUPREME COURT - 2015 (325) E.L.T. 216 (SC) - Validity of order of High Court - Demand of interest - Delayed payment of duty - Date of applicable interest - Held that:- Section 28AA, inter alia, provided that where a person chargeable with duty determined under sub-Section (2) of Section 28 fails to pay such duty within three months from the date of determination, he shall pay, in addition to the duty, interest as well as per the rate specified therein. - effect of the aforesa .....

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or not on other grounds had already been foreclosed in the earlier writ petition, the counsel for the appellant did not make any submission with regard to the plea raising the issue in Show Cause Notice and limited his prayer from the date from which the interest was to be paid. - when this issue was raised and abandoned in the first writ petition which was dismissed as withdrawn, the principles of constructive res-judicata which is laid down under Order 23 Rule 1 of the Code of Civil Procedure, .....

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Kalra, Adv. For the Respondent : Mr. K. Radhakrishnan, Sr. Adv., Ms. Sunita Rani Singh, Adv., Mr. Ritesh Kumar, Adv. & Mr. B. Krishna Prasad, Adv. ORDER By means of this appeal preferred by the appellant (writ petitioner in the High Court), the appellant has challenged the validity of orders dated 28.03.2006 passed by the High Court of Bombay in Writ petition No. 338 of 2006 preferred by the appellant. The appellant had challenged the demand of interest which was raised by the respondent-Dep .....

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04.1993 was issued to the appellant invoking the proviso to Section 28 (1) of the Customs Act, 1962 (hereinafter referred to as 'Act'). This was adjudicated upon by passing Order-in-Original dated 28.01.1994 under Section 28(2) of the Act confirming the demand. The appellant filed appeal thereagainst which was allowed by the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as 'CEGAT') on 20.05.1999. The order of the CEGAT was challenged by the Depart .....

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ayment in installment as it was facing financial crunch. Vide communication dated 04.07.2002, the Department accepted the request for payment of the amount of duty and interest thereon within a period of one year from 27.06.2002. During this period, the entire amount of duty as well as penalty was paid. After receiving the amount payable towards duty and penalty, the Department wrote the letter dated 09.02.2004 to the appellant demanding interest on the delayed payment and informing the appellan .....

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spondent by filing Writ Petition No. 1278 of 2004. The respondent filed its counter affidavit to the said writ petition. In paragraph 6 and 7 of the counter affidavit filed by the respondent the following averments were made: - "6. I say that the petitioners are contesting the above communication dated 04.07.02 from the Respondent No.6 through this present writ petition much after lapse of one and half year. I say that the Petitioners have availed the facility to clear the dues in installme .....

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gned letters dated 09.02.04 and 03.03.04 is apparently wrong on the part of the respondents herein since the duty was confirmed vide order dated 28.01.94 passed by the Collector of Customs in the instant case. 7. I say that the customs duty was confirmed on 28.01.94 prior to the Finance Bill, 1995 received the assent of the President (i.e. 26.05.95). In terms of Section 28AA of the Customs Act, 1962, the petitioners are liable to pay interest on delayed payments after the three months from the d .....

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the High Court sought permission to withdraw the writ petition to enable the appellant to make appropriate representation raising its grievances. This liberty was granted and the writ petition was dismissed as withdrawn vide orders dated 02.08.2004. Thereafter, the appellant made representation contesting the payment of interest on certain grounds and also in respect of the calculations made by the respondent. At this stage, we may mention that there was an amendment in the Customs Act in the y .....

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ith duty determined under sub-Section (2) of Section 28 fails to pay such duty within three months from the date of determination, he shall pay, in addition to the duty, interest as well as per the rate specified therein. Proviso to this section stipulated that where the duty is determined under sub-Section (2) of Section 28 before the date on which said section came into force and that person fails to pay such duty within three months from such date then that person would be liable to pay inter .....

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r-in-Original confirming the duty was passed on 28.01.1994 as already noted above. Having regard to this provision, the interest was payable, if at all, with effect from 26.08.1995. Interest in the sum of ₹ 8,43,62,504/- which were earlier demanded by the respondent was calculated with effect from 28.01.1994. Therefore, the Government re-calculated the interest from 26.08.1995 and inform the appellant that the interest now payable was in the sum of ₹ 4,67,02,251/-. The appellant obje .....

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ot be levied upon the appellant under the said provision even with effect from 26.08.1995. It was further argued that, if at all, the interest was leviable, it could only be from the expiry of three months of the order of the Supreme Court passed on 14.08.2001. This argument of the counsel for the appellant is categorically noted in paragraph 10 of the impugned judgment and is rejected by giving cogent reasons. We are no even supposed to go into those reasons as in the present appeal, the appell .....

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he High Court. However, his submission was that since it was a pure legal question based on the facts already existing on record, he could be allowed to raise this question. In support of this submission, he referred to two judgments of this Court viz., 'Chittoori Subbanna v. Kudappa Subbanna and Others' [1965 (2) SCR 661] and 'Rajendra Shankar Shukla and Ors. v. State of Chhattisgarh & Ors.' [2015 (8) SCALE 384]. No doubt, if the question of law raised in the final Court is .....

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l appearing for the Department, has drawn our attention to the Order dated 02.08.2004 which was passed in Writ Petition No. 1278 of 2004. His submission was that in the earlier round of litigation before the High Court when the demand of interest was questioned, it was given up inasmuch as after arguments on this issue, the counsel for the appellant had withdrawn the writ petition. At that time, while allowing the appellant to withdraw the writ petition, the dispute was confined only to the calc .....

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