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2021 (2) TMI 828 - HC - Central ExciseInterest on delayed refund of Central Excise duty paid - Whether interdepartmental communication or departmental circulars in respect of an interpretation of a statutory provision will have any effect even when the interpretation sought to be projected is in conflict and/or contrary to law declared by the jurisdictional High Court? - N/N. 33/99 dated 08-07-1999. Notification No. 33/99 dated 08-07-1999 - HELD THAT - It is seen that once the judicial pronouncement is made by the High Court or by the Supreme Court, unless the same is subsequently interfered with by judicial means, the same will have a binding effect on all Subordinate Authorities including the quasi judicial authorities like the respondent in the present case. Unless the respondent Department come up in any appeal and seek to reagitate the issues already decided by this Court, they cannot, by referring to departmental circulars seek to arrive at a contrary view and/or even attempt to disregard the judgment of the jurisdictional High Court holding the field at the moment. The judgment of the Apex Court rendered in Commissioner of Custom (import) vs- Dilip Kumar and Co. 2018 (7) TMI 1826 - SUPREME COURT is pressed into service by Mr. S.C. Keyal, learned standing counsel appearing for the respondent to refer to the principle of interpretation of taxing statute. In this judgment the Apex Court has held that where there is an ambiguity in an exemption notification or exemption clause, then the benefit of such ambiguity cannot be extended to the subject/assessee by applying the principle that obscure and/or ambiguity or doubtful fiscal statute must receive a construction favouring the assessee. I respectfully concur with this judgment of the Apex Court. But in the facts of the present case, ambiguity has been lead to rest by a ruling of a Division Bench of this Court, as discussed above, in the case of Amalgamated Plantation (P) Limited 2013 (11) TMI 589 - GAUHATI HIGH COURT . In view of the judgment of the Amalgamated Plantation (P) Limited 2013 (11) TMI 589 - GAUHATI HIGH COURT , this Court held that interest is payable on delayed refunds on excise duty and the same is equally applicable in respect of refunds made under notification no. 33/99 dated 08-07-1999. Although as submitted by the learned standing counsel, the question of law has been kept open while dismissing the SLP preferred by the Revenue on the ground of limitation, the Revenue even in the present proceeding did not refer to the Board s Circular dated 19-12-2002 and 08-12-2006 which according to the Revenue was not considered by this Court while rendering the judgment in the case of Amalgamated Plantation (P) Limited vide judgment and order dated 08-11- 2012. In the absence of any such pleadings and submissions made before this Court to substantiate such claim it is not required to embark on any interpretation in respect of Board s said Circular vis- -vis the applicability of the present provision of Section 11B and Section 11 BB of the Central Excise Act in respect of refunds made in terms of notification no. 33/99 dated 08-07-1999. Mere bald and omnibus submissions of the respondents that the petitioners are not entitled to interest on delayed refund on Excise Duty cannot be sustained - The Board s Circular cannot alter the position and ascribe any contrary view which will be in conflict with the Judicial Pronouncements, in view of the law declared in Amalgamated Plantations (P) Limited. The impugned order dated 31-12-2018 is set aside and quashed and the Revenue is directed to examine the claim of interest on delayed refund as agitated by the petitioners and after due calculation release the claim of interest on delayed refund - Petition allowed.
Issues Involved:
1. Eligibility for interest on delayed refund of Central Excise duty. 2. Applicability of Section 11B and 11BB of the Central Excise Act, 1944 to Notification No. 33/99-CE dated 08.07.1999. 3. Binding nature of judicial precedents and departmental circulars. Detailed Analysis: 1. Eligibility for Interest on Delayed Refund of Central Excise Duty: The petitioners challenged the rejection of their claim for interest on delayed refund of Central Excise duty by the Deputy Commissioner. The petitioners argued that the rejection was contrary to the law laid down by the Gauhati High Court in the case of "Amalgamated Plantations Limited," which held that interest on delayed refund is payable under Section 11BB of the Central Excise Act, 1944. The petitioners had previously been granted a refund of ?39,33,061 for the period from July 1999 to February 2003, but their claim for interest on this delayed refund was rejected. 2. Applicability of Section 11B and 11BB of the Central Excise Act, 1944 to Notification No. 33/99-CE dated 08.07.1999: The court examined the provisions of Notification No. 33/99-CE dated 08.07.1999, which provided exemptions for industrial units undergoing substantial expansion. The court noted that the petitioners had undertaken substantial expansion and were entitled to refunds as per the notification. The court referred to its previous judgment in "Amalgamated Plantations Limited," which held that Section 11B of the Central Excise Act applies to all types of excise duty refunds, including those under Notification No. 33/99-CE. The court emphasized that the language of Section 11B is clear and unambiguous, and it does not differentiate between different types of excise duty refunds. 3. Binding Nature of Judicial Precedents and Departmental Circulars: The court addressed the issue of whether departmental circulars can override judicial precedents. The respondents argued that the CBEC Circular No. 842/19/2006-CX dated 08.12.2006, which stated that Section 11B does not apply to refunds under Notification No. 33/99-CE, should be followed. However, the court held that executive circulars cannot override statutory provisions or judicial interpretations. The court cited several judgments, including "Kamalakshi Finance Corporation Ltd." and "Hindustan Aeronautics Ltd.," to emphasize that judicial pronouncements by higher courts are binding on subordinate authorities and cannot be disregarded based on departmental circulars. Conclusion: The court concluded that the petitioners are entitled to interest on the delayed refund of Central Excise duty. The court set aside the impugned order dated 31.12.2018 and directed the revenue authorities to examine the claim for interest on the delayed refund and release the amount due within 60 days. The court reiterated that judicial precedents must be followed unreservedly by subordinate authorities, and departmental circulars cannot contravene the law declared by higher courts. The writ petition was allowed with no order as to costs.
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