SCA/22472/2005 1/7 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 22472 of 2005 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MS.JUSTICE H.N.DEVANI ====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ====================================== METTACO ENGINEERING PVT LTD & 1 - Petitioner(s) Versus UNION OF INDIA & 2 - Respondent(s) ====================================== Appearance : MR DV PARIKH for Petitioner(s) : 1 - 2. MR JITENDRA MALKAN for Respondent(s) : 1, MR YN RAVANI for Respondent(s) : 2, None for Respondent(s) : 3, ===================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 10/02/2006 SCA/22472/2005 2/7 JUDGMENT ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA) 1. Heard Mr.D.V.Parikh, learned counsel for the petitioner. Rule. Mr.Y.N.Ravani, learned Additional Standing Counsel for the Central Government appearing on behalf of respondent No.3 waives service of rule. 2. At the request of the learned Advocates appearing for the respective parties, the matter is taken up for final hearing and disposal today. 3. This petition is filed challenging order No.5/DC/ICD/2005 dated 11/10/2005 whereunder the petitioner-company was granted refund to the extent of Rs.16,00,000/- only instead of Rs.25,00,000/- refund claimed by the petitioner-company. 4. A brief resume of the facts: The petitioner- company along with its sister concern named Sweetliner Investments and Finance Private Limited exported certain goods. The respondents raised a dispute regarding the quality of raw material SCA/22472/2005 3/7 JUDGMENT employed in manufacturing the goods exported as well as the quantity of exports and raised demand of Rs.37,00,000/- in all. This amount of Rs.37,00,000/- was towards fine in lieu of confiscation and different penalties imposed on the petitioner-company and the other concern as well as two other individuals namely Shri Sunil Chokshi and Shri Gaurang Desai as well as one Shri Mukesh Mehta, petitioner No.2 herein. The petitioner-company challenged the order dated 11/04/2001 made by Commissioner of Customs appropriating the aforesaid sum of Rs.37,00,000/- in the manner indicated hereinbefore and succeeded before the Tribunal. The Tribunal partially accepted the claim of the petitioner as well as the other persons to the extent of Rs.25,00,000/- while sustaining the stand of revenue to the extent of fine of Rs.12,00,000/-. 5. Thus, armed with the order of Tribunal, petitioner-company preferred a refund claim on 14/01/2005. The respondent authorities framed an order dated 11/10/2005 granting refund of Rs.16,00,000/- while denying the refund to the tune SCA/22472/2005 4/7 JUDGMENT of Rs.9,00,000/-. 6. It is observed by respondent authorities:- “The total refund arising out of CESTAT's said order and payable to respective parties comes to Rs.25,00,000/- (Rupees Twenty Five lacs only), as detailed below: Sr. No. Name of the party/person Refund payable (in Rs.) 1 M/s.Mettaco Engg. Pvt. Ltd.(RF) 10,00,000/- M/s.Mettaco Engg. Pvt. Ltd. (Penalty) 6,00,000/- Total 16,00,000/- 2 M/s.Sweetliner Inv.& Fin. Pvt. Ltd.(Penalty) 3,00,000/- 3 Shri Mukesh Mehta, Chairman 5,00,000/- 4 Shri Sunil Chokshi, Director 50,000/- 5 Shri Gaurang G. Desai, Manager 50,000/- Total 9,00,000/- Grant Total 25,00,000/- However, M/s.Mettaco Engineering Pvt. Ltd., vide their claim dated 14/01/2005, has claimed the entire refund amount arising out of the said order i.e. Rs.25,00,000/-, which includes Rs.9 lacs allowed to other beneficiaries. In this regard, the claimant has contended that the entire amount of Rs.37 lacs was paid by M/s.Mettaco Engineering Pvt. Ltd. vide TR-6 Challan No.326/96, dated 10/06/96, No.716/96, dated 18/10/96, in Bank of Baroda, Navrangpura Branch, Ahmedabad and SCA/22472/2005 5/7 JUDGMENT No.1283, dated 26/12/1996, in Bank of Baroda, Kali Branch, Ahmedabad and not by any individual employee or Chairman/director of the company. Further, the claimant has submitted two duly notarised affidavits dated 19/09/05 and 28/09/05 to the effect that “the amounts now claimed as refund have not been adjusted and not recovered by any way against any amounts payable to the said persons” and stated that M/s.Sweetliner Investment & Finance Pvt. Ltd., is a sister concern of the claimant. It can be seen that the amounts claimed as refund by the claimant includes the amounts of penalties on the party/persons other than the claimant company, though appears to have been deposited by the claimant company, but were paid/deposited on behalf of the concerned party/persons and as such, request for its refund is to be made by the beneficiaries only and cannot be claimed by the claimant M/s.Mettaco Engg. Pvt. Ltd. on the ground that they have paid. Since, in that case, at least their concurrence is required and in absence of any authorization of such persons to the effect that they authorize the claimant company to claim and receive the amount paid on their behalf. It can be seen that it is not the matter who has deposited the amount and in what arrangement made between the persons depositing and the person on whose behalf it is being deposited, but request for such deposited amount has to be made by the person who is the beneficiary only.” 7. During course of hearing, the petitioner-company has filed affidavits of Shri Mukesh Mehta, Sweetliner SCA/22472/2005 6/7 JUDGMENT Investments and Finance Pvt. Ltd. through its director, Shri Sunil Chokshi and Shri Gaurang Desai. The learned counsel for the respondent authorities has, after going through the said affidavits, accepted that each one of the aforesaid four persons have accepted that the amount was paid only by the petitioner-company and each one of them is not entitled to claim any refund qua the amounts paid as being relatable to penalty in case of each one of the said four persons. 8. The Order-in-Original No.5/DC/ICD/2005 to the extent it rejects the refund claim on behalf of the aforesaid four persons to the tune of Rs.9,00,000/- is quashed and set aside. The matter is restored to the file only in relation to these four persons' refund claim made by the petitioner-company. The respondent authorities are directed to decide the same in accordance with law within a period of 15 days from the day a copy of this order is communicated to respondent No.3. 9. Rule is made absolute. Petition stands disposed SCA/22472/2005 7/7 JUDGMENT of. No order as to costs. (D.A.MEHTA,J.) (H.N.DEVANI,J.) mrpandya*