Order Date – 23 June 2023

Parties: P. G. Foils Ltd. Vs Director General (Special Safeguards) Department of Revenue & Ors.

Facts – 

• The Petitioner, P. G. Foils Ltd., was given a public opportunity to submit his reply pursuant to the issue of Notification No.D-22011/46/2008 dated 27th January 2009 which was issued for imposition of safeguard duties of at least 50% for a period of four years from the date of imposition, on imports of Aluminium Foil.
• The Petitioner also fled its submission on 30th March 2009 before the deadline as prescribed. The Petitioner, however, contends that without addressing the issues as raised by the parties who were be pre-judicially affected, the impugned notification came to be issued recommending provisional safeguard duty. It was also contented that no rules were framed by the Respondents, as per the requirement of Sub-section 6 of Section 8C of the Customs Tariff Act, 1975.
• An interim order was passed in favour of the petitioner and directing the Petitioner to furnish a bond. When an amendment came to be incorporated to the provisions of Section 8C of the Act by insertion of Sub-section (5A) by Finance No.2 Act, 2009 w.e.f. 11th May 2002, Respondents moved a Civil Application praying for vacating of the interim orders.The Civil Application was disposed by an order dated 11th June 2010, whereby the Petitioner was directed to furnish a Bank Guarantee to the extent of 50% of the amount covered by the bond, in addition to the bond executed by the Petitioner.

Issue –

• Whether the petitioner is liable to pay interest?

Order –

• The Single Bench of Hon’ble High Court observed that the proceedings have remained pending as they stood on 11th June 2010, that is when the Court passed the modified interim order. Never an application was made by the Respondents after 11th June 2010 for vacating of the said orders. The Bank Guarantee as furnished by the Petitioner in pursuance of the order dated 11th June 2010 passed by the Court, has continued to remain with the Respondents, the validity of which has been extended from time to time.
• Almost about 13 years having lapsed after the order dated 11th June 2010, the Respondents are yet to pass a final assessment order. However in the intervening period there was a self-assessment as made by the Petitioner in the year 2017, in pursuance of which the Petitioner deposited duty amounting to Rs.97,44,034/-.
• In the view of the interim order passed by this Court dated 8th May 2009, as modified by order dated 11th June 2010, in the final assessment order which may be passed, the Petitioners ought not to be subjected to the levy/payment of interest. Such apprehension of the Petitioner is in the light of the letter of Assistant Commissioner (H) dated 28th March 2017, addressed to the Petitioner a copy of which has been placed on record.
• In the above circumstances and peculiarly in the fair position as taken by the Petitioner, in our opinion, this is certainly not a case where the Petitioner ought to be foisted with interest under Section 28AA of the Customs Act as made applicable by sub-section 5A of Section 8C of the Customs Tariff Act. It may be observed that the Respondents also, were in no manner aggrieved by the self-assessment as undertaken by the Petitioner under which duty was paid.
• Hence it was directed the Respondents to proceed to pass a final assessment order, however, without levy of any interest on the assessment.