UNION OF INDIA AND ORS. versus M/S ORIENT ENTERPRISES ETC.

Citation: [1998] 2 S.C.R. 143 · Decided: 04-03-1998 · Supreme Court of India · Bench: S.C. AGRAWAL, S. SAGHIR AHMAD · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

UNION OF INDIA AND ORS. 
A 
v. 
M/S ORIENT ENTERPRISES ETC. 
MARCH 4, 1998 
[S.C. AGRAWAL AND S. SAGHIR AHMAD, JJ.) 
B 
Customs Act, 1962: 
jmport of goods-Undervaluation of prices-Consjiscation of goods by 
Customs Authority---Payment of redemption fine, penalty and difference in C 
customs duty-Tribunal holding that goods were lawfully imported and 
vahlation was correct. -Refund of amount collected-High Court allowing 
the writ petition for grant of interest on the refuni.tllizo~nt-Validity of-
Held. no writ petition is maintainable under Article 226 of the Constitution 
seeking relief of payment of interest on delayed refund amount-There was D 
no statutory provision available under the Act, at the relevant time, for 
payment of interest-Constitution of India, 1950: Article 226. 
Respondent-assessee imported Milk Powder from Canada. As there 
was undervaluation of the goods, the Collector of Customs after issuing show 
cause notice passed an order for confiscation of goods. The assessee was E 
permitted to redeem the goods on payment of redemption fine, penalty and 
enhanced customs duty. The assessee's appeal before the Central Board of 
Excise and Customs was dismissed. However, the Tribunal while allowing the 
appeal held that the goods have been lawfully imported and the valuation 
declared was correct. Revenue's appeal before this Court was dismissed. On 
failure to repay the amount collected towards customs duty, redemption fine F 
and penalty, a direction was issued by the Tribunal for refund of the ammmt 
within 60 days. In pursuance thereof the amount was refunded. Thereafter, 
the assessee filed a writ petition daiming interest on the said amount from 
the date of payment till the date of refund, which was allowed. 
Similarly in the other appeal, High Court directed the Revenue to pay 
interest on the refund amount. Aggrieved by the orders of the High Court 
Revenue has preferred the present appeals. 
G 
Revenue contended that under the Customs Act as they stood at the 
relevant time, there was no provision for payment of interest on the amount H 
143 
144 
SUPREME COURT REPORTS 
[1998] 2 S.C.R. 
A collected and refunded; writ petitions under Article 226 of the Constitution 
solely Pfaying for interest is not ordinarily maintainable. 
On behalf of the assessce it was contended that since the amount had 
been illegally collected and was retained by the Revenue, they were entitled 
to payment of intere~1 on the said amount and thus High Court was justified 
B in entertaining the writ petition and directing the payment of interest. 
Allowing the appeals, this Court 
HELD: 1.1. No writ petition is maintainable under Article 226 of the 
C Constitution seeking the relief of payment of interest on delayed refund 
amount paid by assessees towards customs duty, redemption fine and penalty 
under the Customs Act, 1962. [149-B) 
1.2. At the relevant time there was no statutory right entitling the 
respondents to payment of interest on delayed refuml and the writ petition 
D filed by them was not for the enforcement of a legal right available to them 
under the statute. Till the insertion of section 27-A in the Act by Act 22 of 
1995 there was no right entitling payment of interest on delayed refund 
under the Act. Such a right was conferred for the first time by the said 
provision. [149-G) 
E 
F 
Suganma/ v. State of Madhya Pradesh & Ors., AIR (1965) SC 1740, 
relied on. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3374 of 
1991 Etc. 
From the Judgment and Order dated 11.11. 91 of the Delhi High Court 
in C.W. No. 1836of1991. 
R. Mohan, S.D. Shrama and P. Parmeswaran for the Appellants. 
G 
G.L. Rawal, C.K. Sasi, Kailash Vasdev and P. Prasad for the Respondent 
in C.A. No. 3374/91. 
Dinesh Kumar Garg for the Respondents in C.A. No.914/92 
The Judgment of the Court was delivered by 
H 
The common question that falls for consideration in these appeals is 
· U.O.l. v. ORIENT ENTERPRISES 
145 
whether a writ petition under Article 226 of the Constitutioh'oflndia seeking· A' 
the relief of payment of interest on delayed refund of the amount paid by the 
assesses towards the customs d1:1ty, redemption fine ·afi(J penalty under the 
Customs Act. 1'962 (hereinafter referred to as 'the Act') was maintainable. 
Civil Appeal No. 3374191. 
B 
~ 
Mis. Orient Enterprises, respondent No. I. had imported consignments 
~ 
of skimmed milk powder from Canada. The Collector of Customs, Cochin, 
issued show cause notice on the ba

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