The demand for interest under Section 28AA of the Customs Act is automatic upon default, and compliance with Supreme Court orders is mandatory.

JUDGMENT :

(Per MS Sonak J) :

1. Heard learned counsel for the parties.

2. By order dated 10 September 2024, this court notified the parties that it would endeavour to dispose of this petition on the next date finally.

3. Accordingly, Rule. The Rule is made returnable immediately at the request and with the consent of the learned counsel for the parties.

4. The petitioner, who is a partnership firm, seeks the following substantive reliefs by instituting this petition:-

“(i) this Hon’ble Court be pleased to issue a writ, order or directions in the nature of certiorari or any other writ, order or direction of like nature, setting aside the Impugned Order dated 18.01.2013 (Exhibit-J) and Impugned letters dated 12.02.2014, 21.03.2014 and 08.02.2018 (Exhibit T, Exhibit-V and Exhibit-DD respectively) as being contrary to and in violation of the categorical direction of the Hon’ble Supreme Court in its Order dated 18.03.2013 (Exhibit-H).;

(ii) this Hon'ble Court be pleased to issue a writ, order or directions in the nature of mandamus or any other writ, order or direction of like nature, directing the Respondents to (a) withdraw the Impugned order dated 18.01.2013 (Exhibit-T) and Impugned Letters dated 12.04.2014 and 08.02.2018 (Exhibit-V & Exhibit-DD) as the same are in contempt of Hon'ble Supreme Court's Order dated 18.03.2013 (Exhibit-H);(b) direct the Respondents to implement the Order of the Hon'ble Supreme Court dated 18.03.2013 (Exhibit-H) and accordingly, lift the attachment and seal of Petitioner's factory premises and (c) if necessary and required to auction the balance seized diamonds;

(iii) this Hon'ble Court be pleased to issue a writ, order or directions in the nature of mandamus or any other writ, order or direction of like nature, directing the Respondents to auction the balance seized diamonds and appropriate the proceeds thereof in terms of the Order of the Hon'ble Supreme Court dated 18.03.2013 (Exhibit-H);

(iv) this Hon'ble Court be pleased to issue a writ, order or directions in the nature of mandamus or any other writ, order or direction of like nature, directing the Respondents to refund the excess proceeds from the auction of the seized diamonds, over and above the dues adjudicated and confirmed in terms of the Order of the Hon'ble Supreme Court dated 18.03.2013 (Exhibit-H) to the Petitioner;

(v) this Hon'ble Court be pleased to issue a writ, order or directions in the nature of mandamus or any other writ, order or direction of like nature, directing the Respondents to issue NOC to SEEPZ SEZ that customs have no objection in Petitioners carrying out their business/exports from their factory premises;”

5. Mr Chinoy learned senior advocate for the petitioner, referred to the order dated 18 March 2013 made by the Hon’ble Supreme Court against CESTAT’s final order dated 21 December 2006 confirming demands and penalties against the petitioner. He submitted that though the petitioner’s Civil Appeal was dismissed, the Hon’ble Supreme Court granted the petitioner time up to 22 August 2013 to pay the demanded amounts under the CESTAT’s impugned order up to 22 August 2013 through instalments. He submitted that the petitioner duly made payments in terms of this order. Mr Chinoy submitted that the Hon’ble Supreme Court, in its order dated 18 March 2013 clarified that upon the discharge of the entire liability under the CESTAT’s impugned order dated 21 December 2006, the sealed and attached factory premises of the petitioner shall be released to the petitioner.

6. Mr Chinoy submitted that despite the petitioner discharging the entire liability under the CESTAT’s order dated 21 December 2006, the respondents are refusing to de-seal and release the petitioner's factory on the ground the petitioner is liable to pay an additional amount of approximately Rs. 31 Crores towards interest liability. He submits that the CESTAT’s final order dated 21 December 2006, or for that matter, no other orders ever required the petitioner to pay any inte