Supreme Court Orders Refund to Patanjali Foods: Bank Guarantee Encashment ≠ Duty Payment
The Supreme Court held that encashment of bank guarantees furnished as interim security for disputed customs duty does not constitute "payment of duty" under Section 27 of the Customs Act, 1962. Consequently, the doctrine of unjust enrichment is inapplicable to refund claims arising from such encashment. The Revenue must refund such amounts with interest when the underlying duty demand is invalidated by court order, without insisting on compliance with Section 27.
Facts Of The Case:
M/s M.P. Glychem Industries Ltd. (later merged into Ruchi Soya Industries Ltd., now Patanjali Foods Ltd.) imported crude degummed soyabean oil at Jamnagar in 2002. The Customs Department demanded higher duty based on a tariff value fixed under a notification issued under Section 14(2) of the Customs Act, 1962...
