- (1.) By means of this appeal preferred by the Appellant (writ petitioner in the High Court), the Appellant has challenged the validity of orders dated 28 -3 -2006 passed by the High Court of Bombay in Writ Petition No. 338 of 2006 [ : 2006 (202) E.L.T. 583 (Bom.)] preferred by the Appellant. The Appellant had challenged the demand of interest which was raised by the Respondent -Department on the amount of duty paid belatedly. The High Court has rejected the prayer of the Appellant by the impugned judgment giving only a partial relief which is limited to recalculating of the interest in the manner that would be taken note of hereinafter at the appropriate stage. Before that, we would like to state factual matrix which has led to the controversy involved in the instant appeal. There was a dispute about the payment of excise duty by the Appellant. Show Cause Notice dated 6 -4 -1993 was issued to the Appellant invoking the proviso to Sec. 28(1) of the Customs Act, 1962 (hereinafter referred to as 'Act'). This was adjudicated upon by Order -in -Original dated 28 -1 -1994 Under Sec. 28(2) of the Act confirming the demand. The Appellant filed appeal there against which was allowed by the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as 'CEGAT') on 20 -5 -1999. The order of the CEGAT was challenged by the Department by filing appeal in this Court. This Court allowed the appeal of the Department on 14 -8 -2001 [ : 2001 (132) E.L.T. 514 (S.C.)] thereby setting aside the order of the CEGAT and confirming the Order -in -Original passed by the Collector and thus restoring the demand of duty as contained in Adjudication Order dated 28 -1 -1994.
(2.) As per this final order, a sum of Rs. 2,94,42,867 along with penalty in the sum of Rs. 1 crore became payable. The Appellant requested the Department to allow the Appellant to make the aforesaid payment in instalment as it was facing financial crunch. Vide communication dated 4 -7 -2002, the Department accepted the request for payment of the amount of duty and interest thereon within a period of one year from 27 -6 -2002. During this period, the entire amount of duty as well as penalty was paid.
(3.) After receiving the amount payable towards duty and penalty, the Department wrote the letter dated 9 -2 -2004 to the Appellant demanding interest on the delayed payment and informing the Appellant that a sum of Rs. 8,43,62,504/ - was to be recovered from the Appellant by way of interest. The Appellant vide letter dated 17 -2 -2004 objected to the demand of the said interest. However, this objection of the Appellant was overruled and on 3 -3 -2004, the Appellant was again asked to pay the aforesaid amount failing which coercive action was threatened. At this juncture, the Appellant approached the High Court of Bombay and contested the validity of the demand of interest raised by the Respondent by filing Writ Petition No. 1278 of 2004. The Respondent filed its counter affidavit to the said writ petition. In paragraph 6 and 7 of the counter affidavit filed by the Respondent the following averments were made: "6. I say that the petitioners are contesting the above communication dated 4 -7 -2002 from the Respondent No. 6 through this present writ petition much after lapse of one and half year. I say that the petitioners have availed the facility to clear the dues in instalments starting from 28 -11 -2001 to 31 -12 -2003 (2 years) on the basis of the communication dated 4 -7 -2002 from the Addl. Commissioner. I say that the petitioner being aware of the interest liability as stated in the Respondents communication 4 -7 -2002 and having availed the facility of making payments in instalments are wholly unjustified to challenge the said communication dated 4 -7 -2002 through this present writ petition. I say that the amount of demanded as interest w.e.f. 19 -10 -1988 vide impugned letters dated 9 -2 -2004 and 3 -3 -2004 is apparently wrong on the part of the Respondents herein since the duty was confirmed vide order dated 28 -1 -1994 passed by the Collector of Customs in the instant case. 7. I say that the customs duty was confirmed on 28 -1 -1994 prior to the Finance Bill, 1995 received the assent of the President (i.e. 26 -5 -1995). In terms of Sec. 28AA of the Customs Act, 1962, the petitioners are liable to pay interest on delayed payments after the three months from the date on which the Finance Bill, 1995 received the assent of the President. I, therefore, say that the Respondents are empowered to collect interest amount w.e.f. 26 -8 -1995 as per the provisions of the Sec. 28AA of the Customs Act, 1962.";