Vijay Daga, J.

Heard.

Perused petition.

2. The petitioners, who are the proprietary firms carrying on trade and business activities of import and export of spices etc., have jointly filed this petition under Article 226 of the Constitution of India seeking to claim refund of the amount of interest alleged to have been illegally imposed upon and recovered from them without issuing notice as contemplated under section 59(1) of the Customs Act, 1962 (“Act” for short).

The Facts:

3. The factual backdrop leading to the petition is that when the goods were imported by the petitioners, the customs authorities, respondent Nos.2 and 3 herein did not permit the clearance of the goods since some investigation was necessary. The petitioners, therefore, had to file bills of entry for bonding the goods in a warehouse. The respondents made endorsements on the bills of entry filed by the petitioners for bonding of the goods that ex-bond clearance of the goods will not be permitted until the investigation with regard to import of the goods i.e. Import Trade Control Angle involved in the goods is not cleared by the SIIB. In the process, the customs authorities assessed the goods provisionally as per section 18 of the Act.

4. According to the petitioners since the auction notices were issued to auction goods, they were required to invoke writ jurisdiction of the Delhi High Court under Article 226 of the Constitution of India challenging auction notices issued and the demand of interest on the customs duty made by respondent Nos.2 and 3 contending that the interest demanded by them was bad, illegal and not recoverable from them since the imports were under Open General Licence (OGL). The Delhi High Court directed the customs authorities to issue notice of demand prescribed under section 59 of the Act vide its order dated 18th February, 1991. However, it appears that in spite of said order of the Delhi High Court, no notice under section 59 were issued in spite of specific demand made in this behalf. In fact, legal notices were also served on the Principal Collector of Customs, Bombay calling upon him to issue demand notices under section 59 of the Act as was ordered by the High Court of Delhi.

5. It appears that the petitioners were in need of goods. Consequently, they approached the customs authorities (i.e. respondent Nos.2 and 3) and requested them to release the goods. The petitioners were permitted to release the goods subject to payment of interest which the petitioners have paid under protest to the respondents and, simultaneously, applied for refund of interest amount, which, according to the petitioners, had been imposed upon and recovered from them illegally. Since the request of the petitioners for refund of interest paid under protest was not decided by the respondents, the petitioners again invoked writ jurisdiction of the Delhi High Court through Writ Petition No.1318497/2004, which came up for hearing on 28th April, 2004, inter alia; praying for identical relief prayed in the present petition. However, the Delhi High Court was pleased to dismiss the same for want territorial jurisdiction reserving liberty in favour of the petitioners to approach this Court. The petitioners left with no other alternative have invoked writ jurisdiction of this Court to claim relief as mentioned in the opening para of the judgment to seek directions against the customs authorities to refund the interest amount with interest thereon at the rate of 18% per annum from the date of payment till the repayment thereof in full and final.

6. On the above factual backdrop, this petition was heard finally. Mr.Rajiv Datta, learned senior counsel appeared along with Ms.Shikha Raniwala for the petitioners , whereas Mr.A.S.Rao, learned counsel appeared for the Revenue. Both were heard. Relevant Statutory Provisions:

7. In order to appreciate rival contentions, it would be necessary to refer to relevant provisions under the Customs Act. Section 2(14) of the