M/S. O.N.G.C. LTD. versus COMMNR. OF CUSTOMS, MUMBAI

Citation: [2007] 8 S.C.R. 743 · Decided: 01-08-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Disposed off

Judgment (excerpt)

-· 
MIS. O.N.G.C. LTD. 
v. 
COMMNR. OF CUSTOMS, MUMBAI 
AUGUST l, 2007 
[S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
Interest-Claimed on the amount realised as customs duty which was 
ultimately refunded to assessee-:-Held: In principle as also in equity, assessee 
A 
B 
is entitled to interest on the amount deposited on application of principle C 
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 of restitution-Customs duty-Interest 
on-Equity. 
Pure Helium India (P) Ltd v. Oil & Natural Gas Commission, (2003) 8 D 
SCC 593 and Mcdermott International Inc. v. Burn Standard Co. Ltd & Ors., 
(2006) 6 SCALE 220, relied on. 
South Eastern Coalfields Ltd v. State of MP. 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 of 2005. 
743 
E 
F 
G 
H I 
744 
SUPREME COURT REPORTS 
[2007) 8 S.C.R. 
A 
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. 
B 
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. 
C 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 of custom duty in terms of an exemption notification 
issued by the Central Government in that behalf. As despite such claim, 
D 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. 
E 
F 
G 
During pendancy of the Civil Appeals before this Court, a sum of Rs. 
54, 72,87,536.00 was realised by way of custom duties and interest thereon, etc. 
as per the following details: 
"(i) 14.09.2004 
(ii) 
30.03.2004 
(iii) . 24,02.2005 
Rs. 25,00,00,000.00 adjusted towards duty 
Rs. 17,72,87,536.00 appropriated towards 
interest 
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 
H Appellant, would submit that keeping in vid
1w the fact that the appellant had 
I 
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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 A 
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 of MP. 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 
B 
should be directed to be paid in the instant case. 
C 
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 D 
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 In

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