2004 (1) TMI 92 - HC - Central Excise

Refund of excise duty u/s Government of India notification - HELD THAT - It would appear from the circular that the claim for refund/rebate cannot be withheld in the absence of an order of stay by the appellate authority. In the instant case, as stated above, the learned Tribunal has rejected the prayer for stay. Therefore, on the strength of this circular, Mr. Goswami, submits that the petitioner company is entitled to refund. .I have also heard Mr. B. Sarma, learned Addl. Central Government Standing Counsel. I find no reason to disagree with Mr. Goswami, learned Senior Counsel that in view of the above provisions in the notification dated 8th July, 1999 that the refund/rebate of the excise duty paid cannot be withheld. It therefore follows that the petitioner company is entitled to refund of the excise duty already paid. In the result, this writ petition is disposed of with a direction to the respondent authority to refund the excise duty as indicated above, after necessary verification, to the petitioner company within a period of three months from today on furnishing necessary undertaking by the petitioner company with the Commissioner of Central Excise/Customs and that the petitioner company shall refund the amount in the event the Department succeeds finally in the appeal pending before the appellate Tribunal at Kolkata. Interest at the rate of 10% for delayed payment as per provisions of Section 11 of the Central Excise Act on the aforesaid amount shall be calculated and paid within the aforesaid time frame. No costs.

Summary

Issues Involved:
Refund of excise duty u/s Government of India notification dated 8th July, 1999.

Refund Claim for Excise Duty:
The petitioner, a private limited company, sought a refund of excise duty amounting to Rs. 2,88,47,034 for May 2001 to March 2002 and Rs. 5,67,60,645 for April 2002 to September 2003, as per the Government of India notification dated 8th July, 1999. The notification granted exemption of excise duty to industrial units in North Eastern States meeting specific criteria, including substantial capacity expansion post-December 24, 1997.

Expansion and Claim for Refund:
The petitioner company, engaged in aerated water manufacturing, acquired a factory in Meghalaya on 2-5-2000 and commenced commercial production on 15-5-2001. Subsequently, the company expanded its installed capacity by more than twenty-five percent, in line with the notification's requirements, leading to a claim for refund of excise duty paid.

Legal Proceedings and Tribunal Decision:
After the Assistant Commissioner of Excise initially rejected the refund claim, the Commissioner of Excise (Appeals) accepted the company's contention and directed the refund. The Excise Department appealed to the Appellate Tribunal, which rejected the prayer for stay of the Commissioner of Appeals' order, indicating a requirement for refund as per the circular issued by the respondent authority.

Entitlement to Refund:
The High Court, after considering arguments from both parties, upheld the entitlement of the petitioner company to the refund of excise duty paid, in accordance with the provisions of the July 1999 notification. The Court directed the respondent authority to refund the amount within three months, subject to necessary verification and an undertaking by the petitioner company, with provisions for interest on delayed payment as per Section 11 of the Central Excise Act.

Conclusion:
The High Court disposed of the writ petition, affirming the petitioner company's right to the excise duty refund and outlining the timeline and conditions for the refund process, emphasizing compliance with the notification and legal provisions governing such refunds.