Case Note & Summary
The dispute involved M/s. O.N.G.C. Ltd, a public sector undertaking, which had engaged M/s. SEDCO Forex Int. Drilling Inc. for information related to oil and gas exploration. The appellant claimed exemption from custom duty but faced assessment proceedings, which were ultimately set aside by the Supreme Court in a prior judgment dated 24.08.2006. During the pendency of the appeals, the appellant had deposited a total of Rs. 54,72,87,536.00 as custom duties and interest. The appellant filed an application seeking interest on this amount from the date of recovery until the date of refund, proposing a rate of 12% per annum based on principles of restitution. The respondent, representing the Central Government, argued against the payment of interest, stating that the funds were utilized for public welfare. The court analyzed the principles of restitution and equity, ultimately agreeing that the appellant was entitled to interest, albeit at a reduced rate of 6% per annum. The court directed the respondent to pay Rs. 9,51,21,999.50 as interest within six weeks, disposing of the application without costs.
Headnote
A) Tax Law - Custom Duty Refund - Entitlement to Interest - Customs Act, 1962 - Appellant sought interest on the amount deposited as custom duty during the pendency of appeals, claiming restitution. The court held that the appellant was entitled to interest at 6% per annum on the refunded amount, referencing principles of equity and restitution (Paras 1-2).
Issue of Consideration
Whether the appellant is entitled to interest on the amount deposited during the pendency of civil appeals.
Final Decision
The court directed the respondent to pay interest at the rate of 6% per annum on the amount deposited, totaling Rs. 9,51,21,999.50, to be paid within six weeks.
Law Points
- Restitution
- Custom Duty
- Interest on Refund
