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Issues Involved:
1. Claim for interest on delayed payment of excise duty refund. 2. Maintainability of writ petition under Article 226 of the Constitution for claiming interest on delayed refund. Issue-wise Detailed Analysis: 1. Claim for interest on delayed payment of excise duty refund: The petitioner, a limited company, filed a writ petition under Articles 226 and 227 of the Constitution of India, seeking interest at the rate of 18% per annum on amounts illegally realized from the date of realization until the date of repayment. The petitioner argued that they were engaged in manufacturing monoblock pumps and had filed a classification list claiming exemption from excise duty under Notification No. 57/78, dated 1-3-1978. Despite their claim, the excise authorities demanded payment of excise duty, which the petitioner paid under protest. The petitioner contested this issue before the departmental authorities and won the case at the appellate stage, leading to a refund of Rs. 1,28,27,885/- in two installments. The petitioner then sought interest on the delayed refund, arguing that the wrongful withholding of the amount entitled them to claim interest on grounds of equity and general law. 2. Maintainability of writ petition under Article 226 of the Constitution for claiming interest on delayed refund: The primary question was whether a writ petition under Article 226 seeking interest on delayed refund of the amount paid towards excise duty under protest was maintainable. The respondent's counsel, relying on the Supreme Court decision in Union of India v. Orient Enterprises (AIR 1998 SC 1729), argued that such a writ petition was not maintainable. The Supreme Court had held that a writ petition seeking interest on delayed refund could not be maintained as there was no statutory right entitling the petitioner to interest before the insertion of Section 27A by Act 22 of 1995. The court emphasized that interest claims were in the nature of compensation for wrongful retention of money, and writ petitions for interest alone were not maintainable under Article 226. Judgment: The court, agreeing with the respondent's counsel, held that the writ petition was not maintainable. The court cited the Supreme Court's decision in Orient Enterprises, which clarified that a writ petition seeking only interest on delayed refunds was not maintainable. The court noted that the earlier decisions cited by the petitioner's counsel were either rendered by benches of two judges or were decided on their specific facts, and thus did not apply to the present case. The court also distinguished cases where interest was awarded as consequential relief along with the main relief of setting aside tax or duty orders, noting that those cases stood on different footing. Conclusion: The writ petition was dismissed as not maintainable, and no costs were awarded. The court also directed that the security amount, if deposited by the petitioner, be refunded.
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