CUSTOMS High Court Cases

Customs/GST - 100% EOU – Validity of recovery of amount in the absence of any adjudication order quantifying the amount of tax or duty payable – Petitioner seeking refund of amount paid under protest during search at factory premises – Recovery of Customs duty in respect of the finished goods, raw materials, spares and consumables, plant and machinery, etc. destroyed in fire – Petitioner contends that respondents visited its factory to search the premises and due to threats of imprisonment and filing of cases under the provisions of the relevant Acts, various documents were seized and after conclusion of search, respondent demanded and collected INR 1.5 crores under coercion and under protest – Petitioner case that in the absence of any authority of law, respondents illegally have retained INR 1.5 crores collected by them and the same deserves to be refunded back – HELD – in view of Board Instruction No. 01/2022-23 (GST-Investigation) dated 25.05.2022 and Circular No. F.No.296/63/2020-CX-9 dated 19.01.2022, no recovery can be made unless the amount become payable in pursuance of the order passed by the Adjudicating Authority or otherwise become payable under the provisions of the GST Act as well as under the provisions of the Customs Act also - The Circular dated 19.01.2022 clearly states that arrears are only the overdue payment of the amount of tax, interest, fine or penalty that is confirmed against a person who is liable to pay the same to the exchequer and it arises as result of Order-in-Original - In the instant case, it is an undisputed fact that prior to recovery of a sum of INR 1.5 crores from the petitioner, there is no adjudication or any order passed by the respondents, which entitled them to recover the money paid by the petitioner – since the petitioner had made the payment under protest and that the payment was not preceded by any order of adjudication, the respondents did not have any jurisdiction or authority of law to recover the amount, which is clearly violative of Article 265 of the Constitution of India - the petitioner would be entitled to refund of the aforesaid amount collected by the respondents without jurisdiction or authority of law - the contention of the Department that the amount under deposit must be made subject to the outcome of the pending investigation cannot be accepted - The respondents are directed to refund the aforesaid amount of INR 1.5 crores together with interest @ 6% p.a. from 15.10.2019 till the date of payment – writ petition is allowed

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