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Judgment
The conduct of the Respondent No. 1 in this case, to say the least, is most reprehensible. He has realised a large sum of Rs. 2,63,967.75 p. illegally and is refusing to refund the same on the spacious ground that the Petitioners'' application for refund is barred by limitation.
The Petitioners in November, 1983 and January, 1984 had imported various consignments of Synthetic Waste. The Customs Department sought to impose countervailing duty on these goods. It being the claim of the Petitioners that no duty was payable, they filed in this Court Writ Petition No. 588 of 1984. On the 19th March 1984, Rule on the Petition was issued and interim relief in terms of prayer clause (d) therein was granted and it was ordered -
"3. The Respondents will permit the Petitioners to clear the goods, viz., synthetic wastes covered by Bills of Entry at Ex. ''C'' and ''D'' without levying or collecting thereon an additional duty, i.e., countervailing duty, upon the first petitioner furnishing a guarantee of Nationalised Bank in favour of the second Respondent, viz., the Collector of Customs, Bombay, to the extent of the disputed amount of additional duty. The first Petitioner through their Counsel give an undertaking to this Court that they will pay interest at the rate of 12% p.a. on the guaranteed amount from the date of clearance of the goods till payment in the event of the Petitioners failing in this Writ Petition. The Petitioners through their Counsel further given an undertaking to the Court that they will keep the bank guarantee valid and subsisting three weeks after the final disposal of the Petition.
The Petitioners will be at liberty to clear part of the abovementioned goods on furnishing a Bank Guarantee to the extent of the countervailing duty sought to be levied on the goods which are being cleared."
The Petitioners in pursuance of the aforesaid order furnished the necessary Bank Guarantee. They, however, bonded the goods in the Customs Warehouse. On the 27th of July 1984, the first Respondent managed to encash the Bank Guarantee. The Customs Department thus realised the sum of Rs. 2,63,967.75 from the Petitioners'' Bankers and this was in the face of the aforesaid order passed by this Court. It is surprising how the first Respondent persuaded himself to do this. The Petitioners naturally protested by addressing their letters dated 3rd of January 1985, 11th of January 1985 and 15th of February 1985. Despite the said protest, the first Respondent made no efforts to refund the amount either to the Petitioners or to their Bankers. In October 1986 the Customs Duty on synthetic waste was raised by nearly 700%. It was no more liable for the Petitioners to clear the goods. They, therefore, on the 13th of October 1986 relinquished their title in terms of Section 23(2) of the Customs Act. The Customs Authorities thereafter auctioned the goods and appropriated the entire sale proceeds. The Petitioners thereafter by their letters dated the 6th of July 1987, 15th September 1987, 12th November 1987, 25th November 1987 and 7th of April 1988 applied to the first Respondent for refund and the first Respondent by his communication dated the 2nd of June 1988 in formed the Petitioners that the claim for refund was barred by Limitation u/s 27(1)(b) of the Customs Act. Naturally, this brought the Petitioners back to this Court by filing the present Petition.
A mere narration of the aforesaid facts would make it clear that the action on the part of the first Respondent is both illegal and mala fide. Firstly, the first Respondent illegally in the face of the interim order passed by this Court in Writ Petition No. 588 of 1984 recovered the Bank Guarantee furnished by the Petitioners. This was on the 27th July 1984. The Petitioners on the 3rd of January 1985 protested and claimed refund. I fail to see how the claim for refund can be termed as barred by limitation. It was still within the period of six months from the date of the realisation of the Bank Guarantee by the first Respondent. But for the fact that the name of the Officer, who was concerned in encashing the Bank Guarantee is not readily available, this would have been an appropriate case to issue a suo motu notice of contempt of Court against him.
In the result, the Petition succeeds and the Respondents are directed to refund the amount of Rs. 2,63,967.75 p. along with interest at 18% per annum from the 27th of July 1984 till the date of payment. This amount shall be refunded expeditiously and in any event on or before the 15th of May 1989. Rule made absolute. The Petitioners will be entitled to costs of this Petition.