M-S. O.N.G.C. LTD. v. COMMNR. OF CUSTOMS, MUMBAI (2)

Citation: [2007] 8 S.C.R. 743

Court: Supreme Court of India

Bench: S.B. SINHA, MARKANDEY KATJU

Case summary

M-S. O.N.G.C. LTD. v. COMMNR. OF CUSTOMS, MUMBAI (2).pdf

Judgment text

MIS. O. N. G. C. LTD. v. COMMNR. OF CUSTOMS, MUMBAI AUGUST l, 2007 [S. B. SINHA AND MARKANDEY KATJU, JJ. ] Interest-Claimed on the amount realised as customs duty which was ultimately refunded to assessee-:-Held: In principle as also in equity, assessee is entitled to interest on the amount deposited on application ofprinciple of restitution-Having regard to the fact that the amount paid by assessee has already been refunded, the amount deposited fly assessee shall carry interest @ 6% per annum-Principle ofrestitution-Customs duty-Interest on-Equity. Pure Helium India (P) Ltd v. Oil & Natural Gas Commission, (2003) 8 SCC 593 and Mcdermott International Inc. v. Burn Standard Co. Ltd & Ors. , (2006) 6 SCALE 220, relied on. South Eastern Coalfields Ltd v. State ofMP. and Ors. , (2003) 8 SCC 648, referred to. CIVIL APPELLATE JURISIDICTION I. A. No. 4 IN Civil Appeal No. 1882 of2004. From the final Order Nos. C-IV32-19/WZV/2003 dated 09. 12. 2003 in Appeal No.

51/2002 passed by the customs, Excise and Service Tax Appell ate Tribunal, West Zonal Bench at Mumbai WITH -· I. A. No. 4 in Civil Appeal No. 854 of2005. I S. Ganesh, Shiv Praksah Pandey, Rekha P~ndey and Raj Kumar Tanwar, for the Appeallant. Raj iv Dutta, M. F. Humayunisa, Subha Rao and B. Krishna Prasad for the Respondent. The Order of the Court was delivered by ORDER S. B. SINHA, J. Appellant is a public _sector undertaking wholly owned and controlled by the Central Government. It obtained the services of Mis. 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. On the amount paid therefor, custom duty was sought to be levied.. An exemption was claimed by the appellant from payment ofcustom duty in terms ofan 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,,c011tention of the appellant was accepted by this Court and the orders of assessment were set aside. During pendancy of the Civil Appeals before this Court, a sum of Rs. 54,72,87,536. 00 was realised by way ofcustom 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" 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. Mr. S. Ganesh, learned senior counsel appearing on behalf of the Appellant, would submit that keeping in vidw the fact that the appellant had I O. N. G. C. LTD. v.

COMMNR. OF CUSTOMS, MUMBAI [S. B. SINHA, J. ] 745 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 Co~rt in South Eastern Coalfields ltd v. State ofMP. and Ors. , [2003] 8 SCC 648. 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 ir<lirect 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. Appellant is a public sector undertaking. Respondent is the Central Government.

We agree that in principle as also in equity the appellant is I 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 & Natural Gas Commission, [2003] 8. SCC 593 and Mcdermott International Inc. v. Burn Standard Co. Ltd & Ors. , (2006) 6 SCALE 220. Respondent, therefore, is directed to pay a sum of Rs. 9,5 l,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. RP. Interlocutary application disposed of.