2010 (5) TMI 40 - HC - Central Excise

Claim of interest on delayed rebate petition for grant the statutory interest under Section 11BB of the Central Excise Act 1944 on the delayed payment of rebate claims amounting to Rs 97, 02, 895/-. the Commissioner (Appeals) Central Excise Delhi-I had allowed the appeals of the petitioner and directed the adjudicating authority to sanction the rebate and interest on the total amount of rebate at the applicable rate prevailing during the relevant period from the date immediately following the expiry of three months from the date of receipt of the application for rebate till the date of actual refund of duty paid on the goods exported. Held that the order dated 24.06.2008 passed by the Commissioner (Appeals) attained finality inasmuch as the Department did not carry the matter any further. It is therefore clear that the Assistant Commissioner had merely to comply with the directions given by the Commissioner (Appeals) in the appellate order dated 24.06.2008 and he was to merely carry out a ministerial function of computing the interest and making payment thereof. However the Assistant Commissioner took it upon himself to examine the case as per his own understanding and to our minds has gone to the extent of overreaching the orders of his superior authority that is the Commissioner (Appeals). Once the Commissioner (Appeals) had clearly directed the grant of refund along with the statutory interest thereon the Assistant Commissioner was left with no power to go behind that order. the impugned order to the extent it rejects the interest claim of Rs 97, 02, 895/- is set aside. The Assistant Commissioner is directed to comply with the orders passed by the Commissioner (Appeals) within two weeks from today

Summary

Issues:
1. Harassment by Central Excise Department in payment of rebate and statutory interest.
2. Quashing of order rejecting interest claim on delayed rebate sanction.
3. Compliance with appellate order directing interest payment under Section 11BB of Central Excise Act, 1944.

Analysis:

Issue 1:
The judgment highlights the harassment faced by a manufacturer by the Central Excise Department concerning the payment of rebate and statutory interest on delayed rebate payment. The petitioner sought relief from the order rejecting the interest claim, emphasizing compliance with the appellate order for interest payment.

Issue 2:
The petitioner challenged the order-in-original rejecting the interest claim of Rs 97,02,895/-, arguing that it was contrary to the appellate order directing the grant of interest under Section 11BB of the Central Excise Act, 1944. Despite clear provisions and directions, the delayed refunds were paid without interest, leading to financial difficulties for the petitioner.

Issue 3:
The Assistant Commissioner rejected the interest claim based on a letter dated 07.08.2007, where the petitioner indicated a willingness to forego interest subject to specific conditions. However, the conditions were not met by the revenue authorities, rendering the undertaking ineffective. The judgment emphasized the duty of subordinate authorities to follow appellate orders unreservedly, citing the Supreme Court's stance on judicial discipline.

In conclusion, the High Court set aside the impugned order rejecting the interest claim and directed the Assistant Commissioner to comply with the appellate order within two weeks. The writ petition was allowed with costs to be paid by the respondents. The judgment underscores the importance of upholding judicial discipline and following higher appellate authorities' orders unequivocally to prevent undue harassment and ensure the proper administration of tax laws.