2002 (8) TMI 110 - HC - Central Excise

Summary

Issues Involved:
1. Withholding of sanctioned rebate claims.
2. Withholding of interest on delayed payment of refund.
3. Allegations of illegal adjustments and demand for bribes.
4. Delay in payment of rebate claims and interest.

Summary:

1. Withholding of Sanctioned Rebate Claims:
The petitioner, a limited company engaged in manufacturing chemicals, challenged the respondent authorities under the Central Excise Act, 1944, for withholding payment of sanctioned rebate claims totaling Rs. 1,36,998/-. The petitioner sought a writ of mandamus to direct the authorities to pay the sanctioned rebate claims along with statutory interest for delayed payments.

2. Withholding of Interest on Delayed Payment of Refund:
The petitioner claimed that despite the rebate claims being sanctioned, the authorities delayed the payment and adjusted amounts against alleged dues of another entity, M/s. J.J. Chemicals, and other pending dues. The petitioner argued that these adjustments were illegal and sought interest on the delayed payments.

3. Allegations of Illegal Adjustments and Demand for Bribes:
The petitioner alleged that the rebate claims were deliberately withheld due to demands for bribes by certain officers, specifically naming Mr. Ishwar Chauhan and Mr. H.S. Sharma. The petitioner requested action against these officers and the release of the full rebate amounts without any adjustments.

4. Delay in Payment of Rebate Claims and Interest:
Despite reminders and representations, the petitioner faced delays in receiving the rebate amounts. The Commissioner (Appeals) later ruled that the adjustments against the dues of M/s. J.J. Chemicals and other pending dues were illegal. The petitioner was eventually offered a cheque for Rs. 1,39,505/-, which included a token interest amount, but the petitioner returned it, claiming it was insufficient.

Judgment:
The High Court found the respondents' explanations for the delay unacceptable and ruled in favor of the petitioner. The Court directed the respondents to:
1. Pay the petitioner Rs. 1,36,998/- by cheque within one week.
2. Pay statutory interest at 9% p.a. on the delayed payment from 17-11-2000 till the date of payment.
3. Pay interest on other refunded amounts for the specified periods.
4. Pay costs of Rs. 10,000/- to the petitioner.
5. Comply with these directions within one month, failing which further interest at 9% p.a. would be applicable.
6. Recover the interest and costs from the officers responsible for the delay and initiate disciplinary action within three months.

The rule was made absolute to the extent specified, and direct service was permitted.