M/S. O.N.G.C. LTD.versusCOMMNR. OF CUSTOMS, MUMBAI

                                 MIS. O.N.G.C. LTD.                               A
                                          v.
                       COMMNR. OF CUSTOMS, MUMBAI

                                  AUGUST l, 2007

                   [S.B. SINHA AND MARKANDEY KA TJU, JJ.]                          B

           Interest-Claimed on the amount realised as customs duty which was
     ultimately refunded to assessee-:-Held: In principle as also in equity, assessee
     is entitled to interest on the amount deposited on application of principle C
     of restitution-Having regard to the fact that the amount paid by assessee
     has already been refunded, the amount deposited fly assessee shall carry
     interest @ 6% per annum-Principle of restitution-Customs duty-Interest
     on-Equity.

         Pure Helium India (P) Ltd v. Oil & Natural Gas Commission, (2003) 8       D
     SCC 593 and Mcdermott International Inc. v. Burn Standard Co. Ltd & Ors.,
     (2006) 6 SCALE 220, relied on.

           South Eastern Coalfields Ltd v. State of MP. and Ors., (2003) 8 SCC
     648, referred to.
                                                                                   E
          CIVIL APPELLATE JURISIDICTION

          I.A. No. 4

          IN

          Civil Appeal No. 1882 of2004.                                            F

           From the final Order Nos. C-IV32-19/WZV/2003 dated 09.12.2003 in
     Appeal No. 51/2002 passed by the customs, Excise and Service Tax Appell
     ate Tribunal, West Zonal Bench at Mumbai

                                           WITH                                   G
-·
          I.A. No. 4 in Civil Appeal No. 854 of 2005.



                                         743                                       H I
    744                     SUPREME COURT REPORTS                   [2007) 8 S.C.R.

A         S. Ganesh, Shiv Praksah Pandey, Rekha P~ndey and Raj Kumar Tanwar,
    for the Appeallant.

         Raj iv Dutta, M.F. Humayunisa, Subha Rao and B. Krishna Prasad for the
    Respondent.

B         The Order of the Court was delivered by

                                               ORDER

           S.B. SINHA, J. Appellant is a public _sector undertaking wholly owned
    and controlled by the Central Government. It obtained the services of Mis.
C   SEDCO Forex Int. Drilling Inc. for obtaining requisite information which would
    assist it in the matter of exploration· of oil and gas. The information so
    gathered was recorded in 3-D Seismic Tapes. On the amount paid therefor,
    custom duty was sought to be levied .. An exemption was claimed by the
    appellant from payment of custom duty in terms of an exemption notification
    issued by the Central Government in that behalf. As despite such claim,
D   assessment proceedings were initiated and completed, the matter came upto
    this Court and by a judgment and order dated 24.08.2006,,c011tention of the
    appellant was accepted by this Court and the orders of assessment were set
    aside.

           During pendancy of the Civil Appeals before this Court, a sum of Rs.
E
    54, 72,87,536.00 was realised by way of custom duties and interest thereon, etc.
    as per the following details:

           "(i)    14.09.2004            Rs. 25,00,00,000.00 adjusted towards duty

           (ii)    30.03.2004            Rs. 17,72,87,536.00 appropriated towards
F                                        interest

           (iii) . 24,02.2005            Rs. 12,00,00,000.00 adjusted towards
                                         interest

                  Total Rs. 54,72,87,536.00"
G         An application has now been filed for a direction to the respondent to
    pay interest on the said sum with effect from the date of recovery till the date
    of the appellant.

         Mr. S. Ganesh, learned senior counsel appearing on behalf of the
H   Appellant, would submit that keeping in vidw the fact that the appellant had
                                                   1
                                                   I
           O.N.G.C. LTD. v. COMMNR. OF CUSTOMS, MUMBAI [S.B. SINHA, J.] 745


-   to deposit a huge amount during pendency of the Civil Appeals, interest of
    justice would be met if this Court directs the respondent to pay interest at
    the rate of 12% per annum on the said amount. It was submitted that interest
                                                                                       A


    should be directed to be paid by way of restitution, as has been held by this
    Co~rt in South Eastern Coalfields ltd v. State ofMP. and Ors., [2003] 8 SCC
    648.
                                                                                       B
         Mr. Rajiv Dutta, learned senior counsel appearing on behalf of the
    respondent, on the other hand, would submit that the Central Government did
    not make any investment of the amount received by it by way of ir<lirect tax
    but expended the same for the welfare of the people and, thus, no interest
    should be directed to be paid in the instant case.                                 C
           Appellant is a public sector undertaking. Respondent is the Central
    Government. We agree that in principle as also in equity the appellant is
                                                                                I
    entitled to interest on the amount deposited on application of principle of
    restitution. In the facts and circumstances of this case and particularly having
    regard to the fact that the amount paid by the appellant has already been          D
    refunded, we direct that the amount deposited by the appellant shall carry
    interest at the rate of 6% per annum. Reference in this connection may be
    made to Pure Helium India (P) ltd v. Oil & Natural Gas Commission, [2003]
    8. SCC 593 and Mcdermott International Inc. v. Burn Standard Co. Ltd &
    Ors., (2006) 6 SCALE 220.
                                                                                       E
         Respondent, therefore, is directed to pay a sum of Rs. 9,5 l,21;999.50/-
    by way of interest. Such amount should be paid within a period of six weeks
    from date. The application is disposed of accordingly. No costs.

    RP.                                     Interlocutary application disposed of.