VISHAL OIL AND LUBRICANTS CO. vs. THE COMMISSIONER OF CUSTOMS (IMPORT)

W.P.(C)-7004/2026HC Delhi28 September 202620 pages
AI SummaryPartly Allowed

What were the facts?

The Petitioner, Vishal Oil and Lubricants Co., imported "Bitumen" under Bill of Entry No. 9174780 dated 08.05.2015. Upon examination, the goods were found to be "Used Oil". The goods were seized on 05.06.2015. A Show Cause Notice was issued on 15.09.2015, proposing confiscation and penalties. After prolonged proceedings, an Order-in-Original was passed on 28.02.2023, confirming the customs duty of Rs.9,22,210/-, imposing a redemption fine of Rs.1,83,000/-, and penalties totaling Rs.1,88,000/-. The Bill of Entry was re-assessed on 29.08.2023. The Petitioner then sought waiver of interest charges reflected in the Customs EDI System, amounting to approximately Rs.11,74,806/- as of 16.11.2023, for the period during which the goods were seized and adjudication proceedings were pending.

What did the High Court hold?

The High Court held that the Petitioner cannot be saddled with the entire amount of interest reflected in the Customs EDI System. While the challenge to the entire interest liability was not accepted, the computation of interest for the period prior to the determination of the amount pursuant to the Order-in-Original dated 28.02.2023 could not be sustained. The Court reasoned that the prolonged delay in adjudication, spanning approximately eight years, was a significant factor. The Court directed the Respondent to recompute the interest liability, excluding the period from the original assessment in May 2015 up to 28.02.2023. Interest for the period subsequent to 28.02.2023 was to be determined strictly in accordance with applicable statutory provisions and the liability determined under the Order-in-Original. The re-assessment on 29.08.2023 and all payments/appropriations were to be considered. The Court clarified that this decision was confined to the liability arising from confiscation proceedings and did not express an opinion on any independent statutory liability for other defaults. The ratio is that interest cannot be levied for periods of unreasonable delay in adjudication attributable to the department, especially when goods are under seizure.

What were the issues?

1. Whether the Petitioner can be saddled with the entire amount of interest reflected in the Customs EDI System in respect of Bill of Entry No. 9174780, including the period during which the imported goods remained seized and the proceedings arising out of the Show Cause Notice remained pending for nearly eight years? Assessee's Contention: The Petitioner argued that it should not be liable for interest for the prolonged period of delay in adjudication, especially when the goods were under seizure and the delay was attributable to the Customs authorities. The Petitioner relied on the decisions in Swatch Group India and Gala International for the principle of waiver of interest in cases of departmental delay. Revenue's Contention: The judgment does not explicitly record the revenue's specific arguments regarding the interest computation. However, the revenue's stance, as implied by the EDI system reflecting interest, would be that interest is leviable as per statutory provisions from the date of assessment or re-assessment until payment.

Which sections of the Income-tax Act were involved?

Section 110,Section 111,Section 112,Section 114A,Section 114AA,Section 125,Section 28

AI-generated summary — verify with the full judgment below

W.P.(C) 7004/2026 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Judgment reserved on: 16.09.2026 Judgment pronounced on: 28.09.2026

Judgment uploaded on: 28.09.2026 # CNR No. DLHC010229892026 + W.P.(C) 7004/2026 and CM APPL. 34395/2026

VISHAL OIL AND LUBRICANTS CO.

.....Petitioner

Through: Mr. Rohit Kapur, Adv.

versus

THE COMMISSIONER OF CUSTOMS (IMPORT) .....Respondent Through: Mr. Piyush Beriwal, Ms. Ruchita Srivastava, Mr. Sparsh Jain, Advs.

CORAM: HON'BLE MR. JUSTICE ANIL KSHETARPAL HON'BLE MS. JUSTICE SHAIL JAIN J U D G M E N T ANIL KSHETARPAL, J.:

1.

Through the present Petition, the Petitioner seeks a direction to the Respondent to waive the interest/late charges reflected in the Customs EDI System in respect of the aforesaid Bill of Entry.

2.

The issue which arises for consideration in the present Petition is whether the Petitioner can be saddled with the entire amount of interest ref

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 112

All 157 judgments and leading authorities on Section 112 →

Recent GST High Court judgments

Search GST case law →