UNION OF INDIA Vs. VALECHA ENGINEERING LIMITED

JUDGEMENT

(1.) All these petitions are being disposed off by this common judgment as common questions of law arise. The necessary facts to the extent required in each of the petitions will be set out separately.

(2.) In Writ Petition No. 2540 of 2008 a show cause notice dated July 20th 2007 came to be served on the petitioners under Section 124 read with Section 28 of the Customs Act, 1962. Demand was for duty under the Customs Act along with interest. The show cause notice also set out as to why the bonds, undertakings filed at the time of import should not be enforced. The demand, included (1) recovery of customs duty and (2) interest and penalty. On receipt of the said show cause notice an application came to be filed by the petitioners under Section 127B of the Customs Act, 1962 , hereinafter referred to as the Customs Act before the Settlement Commission on 17th December, 2007. In the application the petitioners have specifically given the details of the admitted duty liability, the interest thereon and the payment made. By the prayer clause the petitioners prayed for immunity from prosecution for any offence under the Customs Act, 1962 , imposition of any penalty under the Customs Act, 1962 and grant of immunity from imposition of any fine in respect of the goods under settlement and some other reliefs. There was no relief sought for refund of interest paid or for waiver of interest.

(3.) The Commission by its order of 25th April, 2009 after considering the contention that there is no power to waive interest was pleased to direct that interest which was paid could not be charged and has to be refunded within 30 days. It also passed some consequential orders with which we are really not concerned as the main relief in the petition is whether it was open to the Settlement Commission to direct refund of the interest when the petitioners themselves had voluntarily paid the interest as admitted amount and in the application had made no claim for refund though orally before the Commission it was contended that the amount is not due and payable.