Allowed

Cachar Native Joint Stock Company Ltd. v. Union of India and Anr.

Gauhati HC7 Mar 2019WP(C)/82/2019

Case brief

AI extract

What is this about?

Petitioner claimed interest on delayed refund of excise duty under Sections 11B and 11BB of the Central Excise Act. Relying on a Division Bench judgment, the court held petitioner entitled to interest and directed respondent to calculate and pay it within three months.

What did the court decide?

Respondent No. 2 shall determine the interest amount payable to the petitioner and release it within three months.

Cachar Native Joint Stock Company Ltd. Vs Union of India… — Cheque Dishonour | Gauhati HC (2019)

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Page No.# 1/4

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GAHC010001152019

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : WP(C) 82/2019

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1:CACHAR NATIVE JOINT STOCK COMPANY LTD.

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(OWNER OF- VERNERPUR TEA ESTATE),

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A COMPANY DULY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT CLUB ROAD, SILCHAR, CACHAR788001, ASSAM, OWNING VERNERPUR TEA ESTATE AT P.O.VERNERPUR, DIST. HAILAKANDI- 788167, ASSAM

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VERSUS

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1:UNION OF INDIA AND ANR.

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DULY REP. BY THE SECRETARY TO THE MINISTRY OF FINANCE, DEPARTMENT OF BANKING AND REVENUE, NORTH BLOCK, NEW DELHI.

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2:THE ASSISTANT COMMISSIONER GST AND CENTRAL EXCISE DIVISION C.R. BUILDING CIRCUIT HOUSE ROAD SILCHAR- 788001

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Advocate for the Petitioner : MR. S K KEJRIWAL, S KEJRIWAL

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Advocate for the Respondent : SC, EXCISE DEPTT.

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BEFORE

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HONOURABLE MR. JUSTICE UJJAL BHUYAN

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ORDER

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Date : 07-03-2019

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Heard Mr. S.K. Kejriwal, learned counsel for the petitioner and Mr. B. Sharma, learned Standing Counsel, Central Excise.

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By filing this petition under Article 226 of the Constitution of India, petitioner seeks a direction to respondent No.2 to pay interest on the delayed refund of education cess including

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secondary and higher education cess. In other words, subject-matter of the writ petition is payment of interest on delayed excise duty refund by the Central Excise to the petitioner.

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Petitioner is an industrial unit set up in the State of Assam and claims benefit of excise duty exemption under Central Government notification dated 08.07.1999. However, notwithstanding the same, excise duty was levied on the petitioner by the adjudicating authority for the period from July, 1999 to February, 2003 which was upheld by the appellate authority, i.e., CESTAT, Kolkata. Appeal filed by the petitioner before this Court being Central Excise Appeal No.11/2016 was allowed by this Court vide judgment and order dated 20.02.2018 by setting aside the orders passed by the authorities below.

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Section 11B of the Central Excise Act, 1944 deals with claim for refund of duty. Under Section 11BB of the said Act, if any duty ordered to be refunded under Sub-Section (2) of Section 11B to any applicant is not refunded within three months from the date of receipt of the application under Sub-Section (1), these shall be paid to that applicant interest at such rate which may be fixed by the Central Board of Excise and Customs on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty.

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Learned counsel for the petitioner submits that issue raised in this writ petition is squarely covered by a Division Bench judgment of this Court in Amalgamated Plantations (P) Ltd Vs. Union of India , reported in 2013(2) GLR 732.

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Mr. Sharma in his usual fairness submits that SLP filed by the Central Excise before the Supreme Court against the said decision was dismissed on the ground of limitation. Therefore, the question is still open.

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In reply, Mr. Kejriwal submits that even if submission of Mr. Sharma is accepted, Division Bench judgment in Amalgamated Plantations (P) Ltd (supra) holds the field and is the law applicable at least in so far this High Court is concerned.

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Submissions made have been considered.

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Relevant portion of the order in Amalgamated Plantations (P) Ltd (supra) reads as under:-

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“ 29.From a conjoint reading of sections 11B and 11BB of the Central Excise Act, 1944, it is apparent that if any refund of excise duty is ordered under section 11B(2), the same has to be refunded within three months from the date of receipt of application under sub section (1) of that section, failing which interest will have to be paid. Language of section 11B is very clear and unambiguous. It speaks of claiming refund of any (emphasis ours) duty of excise. No exception is provided. It does not distinguish or differentiate between any kind of excise duty refund, whether duty paid in excess or duty paid which are exempted. As pointed out by the Hon’ble Supreme Court in the case of Ranbaxy Laboratories Ltd. -Vs- Union of India reported in (2011) 10 SCC 292, it is a well-settled proposition of law that a fiscal legislation has to be construed strictly and one has to look merely at what is said in the relevant provision; there is nothing to be read in; nothing to be implied and there is no room for any intendment.

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30.In the case of Ranbaxy Laboratories Limited (supra), Hon’ble Supreme Court while examining the aforesaid two provisions, referred to a circular dated 01-10-2002 issued by the Central Board of Excise and Customs, New Delhi wherein and whereby the Board stressed that the provisions of section 11BB of the Central Excise Act, 1944 are attracted automatically for any refund (emphasis ours) sanctioned beyond a period of three months. Hon’ble Supreme Court has held that liability of the Revenue to pay interest under section 11BB commences from the date of expiry of three months from the date of receipt of application for refund under section 11B(1) and not on the expiry of the said period from the date on which the order of refund is made.

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31.We also find that a Single Bench of this Court in (2004) 171 ELT458 (Hindustan Coca-Cola Beverages Pvt. Ltd. -Vs- Union of India) while directing refund of excise duty paid in terms of notification dated 08-071999, had also directed payment of interest for delayed payment as per provision of section 11 of the Central Excise Act, 1944.

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32.Thus, in view of the discussions made above, we are of the unhesitant view that section 11B of the Central Excise Act, 1944 does not exclude claim of refund made in terms of the notification dated 08-07-1999. Petitioners would, therefore, be entitled to interest under section 11BB of the Central Excise Act, 1944 on the excise duty refunded to them. The jurisdictional excise officers shall now determine the interest amount payable to the

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petitioners for the relevant periods. The amounts found due shall be paid to the petitioners within three months from today.”

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At this stage, Mr. Kejriwal submits that petitioner was informed by respondent No.2 vide letter dated 14.12.2018 that in the appellate order, Gauhati High Court did not mention payment of interest on delayed refund.

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Payment of interest on delayed refund of excise duty is a statutory requirement under Section 11B of the Central Excise Act, 1944 as extracted above. Therefore, under the law, if there is delay in refund of excise duty, authorities are under a statutory obligation to pay interest under Section 11BB.

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Accordingly and in the light of the above, it is held that petitioner would be entitled to interest under Section 11BB of the Central Excise Act, 1944 on the excise duty refunded to it belatedly. Respondent No.2 shall now determine the interest amount payable to the petitioner for the relevant period whereafter the same shall be released to the petitioner within a period of 3 months from today.

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Writ petition is disposed of.

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JUDGE

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Comparing Assistant

Cachar Native Joint Stock Company Ltd. v. Union of India and Anr.

Case brief

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Cachar Native Joint Stock Company Ltd. v. Union of India and Anr.

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