Devharsh Infotech Private Limited vs. Union Of INDIA

Facts

The petitioner, Devharsh Infotech Private Limited, sought a refund of special additional duty of customs paid on imported thermal paper reels. The goods were imported by Lucky Forms Private Limited, which later amalgamated with the petitioner. The refund claim was filed in 2011 before the Specified Officer of Surat Special Economic Zone, citing Customs Notification No. 102/2007-Cus. The Specified Officer rejected the claim in 2011, stating no provision for refund existed. An appeal to the Appellate Commissioner led to the annulment of the original order in 2012, with a direction to refer the matter for removal of difficulties. Despite subsequent communications and a CESTAT order in 2016 remanding the matter for re-adjudication, the petitioner faced inaction from the authorities, leading to the present writ petition filed in 2019.

Held

The Court held that the petitioner was entitled to a refund of the special additional duty of customs. The Court found that the prolonged inaction and delay by the respondent authorities in adjudicating the refund claim were unacceptable and amounted to judicial indiscipline, especially after the CESTAT's order in 2016 and subsequent clarifications in 2017 regarding the adjudication of refund claims by jurisdictional authorities. The Court noted that the merit of the claim was not questioned by the authorities. The Court directed the respondents to decide the refund claim within six weeks of receiving the order and to pay the refund along with interest. The Court also contemplated action against erring officers due to apathy and carelessness but acceded to the request not to impose costs, urging promptness in future dealings.

Key Issues

1. Whether the Specified Officer of the Surat Special Economic Zone was the correct authority to adjudicate the refund claim for special additional duty of customs paid by an SEZ unit on imported goods resold to a domestic tariff area unit, as per the Special Economic Zone Act, 2005 and Rules, 2006? 2. Whether the petitioner is entitled to a refund of the special additional duty of customs paid, along with interest, considering the prolonged inaction and procedural delays by the revenue authorities? Petitioner's Arguments: The petitioner contended that the Specified Officer wrongly rejected the refund claim. They relied on the CESTAT's order dated 16.08.2016, which empowered jurisdictional Central Excise and Customs authorities to deal with refund cases, and a Gujarat High Court judgment in DIC Fine Chemicals Ltd. (2014) holding Department of Commerce officers as adjudicating authorities for such claims. They argued that the inaction amounted to judicial indiscipline and sought a writ of mandamus for adjudication and interest on the refund amount. Revenue's Arguments: The revenue's counsel submitted that non-clarity in provisions until 2016 led to the delay, and subsequent changes in officers prevented the request from being acceded to. They stated there was no ill intent, attributing the impasse to a lack of clarity.