M.J. Exporters Pvt. Ltd. Vs Union of India & Ors. (Supreme Court of India)
Supreme Court dismissed the appeal, holding that the challenge to the interest demand was barred after withdrawal of the earlier writ petition.
The appellant challenged the Bombay High Court’s order dated 28.03.2006, which had rejected its challenge to the demand of interest on belated payment of customs duty while granting only partial relief by directing recalculation of the interest. The dispute originated from a show cause notice dated 06.04.1993 issued under the proviso to Section 28(1) of the Customs Act, 1962. The demand was confirmed by an Order-in-Original dated 28.01.1994 under Section 28(2). Although the Customs, Excise and Gold (Control) Appellate Tribunal allowed the appellant’s appeal on 20.05.1999, the Supreme Court, on 14.08.2001, allowed the Department’s appeal, restored the Order-in-Original, and confirmed the demand of duty.
Following the Supreme Court’s order, duty of ₹2,94,42,867 and a penalty of ₹1 crore became payable. On the appellant’s request citing financial difficulties, the Department permitted payment in instalments within one year from 27.06.2002, and the appellant paid the entire duty and penalty. Thereafter, the Department demanded interest of ₹8,43,62,504 by letters dated 09.02.2004 and 03.03.2004. The appellant challenged this demand before the Bombay High Court in Writ Petition No. 1278 of 2004. In its counter affidavit, the Department acknowledged that interest could be levied only from 26.08.1995 under Section 28AA of the Customs Act, as the duty had been determined before the 1995 amendment. In view of these averments, the appellant withdrew the writ petition with liberty to make a representation regarding its grievances.
