2003 (3) TMI 120 - HC - Central Excise

Summary

Issues involved:
The issue involves the refund of a pre-deposit amount made by the petitioner before the Tribunal under the Central Excise Act.

Summary:

Issue 1: Refund of pre-deposit amount
The petitioner, a manufacturer of instant coffee powder, filed an appeal challenging the rejection of certain deductions by the Appellate Authority. The Tribunal remanded the case for re-determination, resulting in a differential duty payable by the petitioner. The petitioner sought a refund of the balance sum of Rs. 77,10,277.00, being the difference between the pre-deposit and the demand. The respondent insisted on a regular refund claim under Section 11B of the Central Excise Act, contending that the pre-deposit is akin to excise duty. The petitioner argued that the pre-deposit is not excise duty and cited relevant judgments. The High Court held that the pre-deposit amount is not equated to excise duty and ordered the refund along with 15% interest, citing precedents and a circular from the Department. The High Court set aside the respondent's endorsement and directed the refund with interest.

Issue 2: Imposition of costs
The High Court imposed costs of Rs. 10,000.00 on the respondent for unnecessarily withholding the refund amount despite a reasonable request from the petitioner. The court expressed displeasure at the respondent's stance, which contradicted previous court rulings and confirmed by the Supreme Court. The High Court directed the respondent to pay the costs to the Chief Ministers' Relief Fund within four weeks.

Issue 3: Observations and directions
The High Court made observations on the delay in processing the refund application since 2000 and criticized the respondent for persisting with an unsustainable argument despite clear court rulings. The court deprecated the filing of misleading affidavits and directed the Chief Commissioner to conduct an inquiry into the matter and take appropriate action against the officials responsible. The writ petition was allowed with the above directions and costs of Rs. 10,000.00 imposed on the respondent.