Supreme Court of India
Gujarat Agro Industries Corporation ... vs A. Gupta, Assistant Collector Of ... on 17 March, 1999
Equivalent citations: 1999ECR485(SC), 1999(108)ELT12(SC), (1999)9SCC221
Bench: S. Rajendra Babu, S.N. Phukan
ORDER
S. Rajendra Babu and S.N. Phukan, JJ.
1. Pursuant to the show cause notice issued for non-payment of customs duty on ex-bond clearances of imported goods from appointed warehouse, namely, Gujarat State Warehouse Corporation. Gandhi Nagar, a demand was made in a sum of Rs. 45,15,206/-
2. That proceeding was challenged in a Writ Petition before the High Court contending that the appellants had cleared the goods against payment of the necessary amounts as provided under law through a bank. The High Court, however, dismissed the writ petition.
3. In this Court that by an interim order made on 21st September, 1992 the Collector of Customs, Ahmedabad was directed to take account of the amount payable by the appellants and the amount paid by the appellants and to determine whether any amount is payable or not and in the meantime no coercive steps could be taken against them. It was also made clear that if it is found that credit had been given to any third party in respect of any amount paid by the appellants or on behalf of the appellants then the respondents could be well advised to take steps to recover the same from such third party to whom the amounts were erroneously given credit for. The Collector was also directed to make a report as to what is the amount which they have recovered from the third party. However, no report was filed before this Court.
4. On 2nd November, 1992 another Order was made by this Court which reads as follows :
By our order dated September 21, 1992 we had directed the Collector of Customs to take a decision in respect of the amount payable by the petitioners and the amount paid by the petitioners and to determine the net balance due from one party to the other as per our order. We regret that no report has yet been submitted by the Collector, Ahmedabad as to why the report could not be made till now. In these circumstances, we direct the special leave petition to be listed within a period of two weeks after the Collector submits his report. In case the report is not submitted by the Collector within a period of eight weeks from today, the amount of Rupees twenty lacs, which has been deposited by the petitioners in the High Court of Gujarat, pursuant to our order, shall be refunded to the petitioners on furnishing security for the said amount to the satisfaction of the Registrar of the High Court of Gujarat.
5. Thereafter an affidavit was filed by Mr. S.H. Bhatnagar, Under Secretary to the Government of India, Ministry of Finance (Dept. of Revenue) on 22nd December, 1992 which is at page 182 of the paper book and to II Annexure T is attached which is a letter sent by the Assistant Collector of Central Excise & Customs to the Deputy Collector (J), Central Excise & Customs. In that letter it is stated in paragraph 5 as follows :
The reasons for not recovering the said amount from the parties are as follows :
The Demand drafts/Pay orders of GAIC were presented along with challans of the other parties by CHA and the bank has given credit to those parties of this amount. The other parties cleared their goods on these challans. There is no doubt that challans were paid although the money was of GAIC. The bank also certified that the amount in the said challans has been received by them, however, they were unable to find out from the draft or pay order as to whose money it was, at the time for giving credit to parties other than GAIC.
The department can demand the said amount from the other parties only if it is found that they have cleared the goods on challans on which duty has not been paid and if the other parties have paid duty from the money paid by GAIC, it is GAIC who should ask their money back from the other parties and settle the issue. The fact that GAIC has paid the full amount to their CHA, alone cannot be the legal ground on which demand can be made from other parties, unless the bank certifies that the amount paid by GAIC is wrongly credited to other parties and rectifies the mistake by giving credit to the GAIC for the full amount.
6. In the circumstances of the case now it is clear that the appellant had made the payments and they had cleared the goods on producing appropriate challans against which payments had been made and certain third parties had derived benefits by utilising those challans. If that is so, the proper course for the respondents is to proceed against them and not against the appellants.
7. Therefore, we allow this appeal and direct the respondents not to take any action against the appellants pursuant to the show cause notices impugned herein. However, it is made clear that it is open to the respondents to proceed against the third parties in accordance with law who had derived benefits out of payments against the challans produced by the appellants.
8. Subject to what is stated above, the Civil Appeal is allowed. Security, if any, furnished to take back the amounts deposited in the High Court shall stand discharged.
9. There shall be no order as to costs.