2016 (10) TMI 575 - HC - Central Excise

Refund of amount alongwith interest - demand raised earlier towards which the amount already deposited is set aside - amount directed to be refunded to the petitioner - Insofar as the demand for interest at the rate of 18% per annum of such amount is concerned, this court while passing the order dated 6th December, 2013 had not specified that the petitioner would be entitled to refund of the amount with interest if it succeeded in the petition. The amount deposited by the petitioner is pursuant to an interim order passed by the court and is not in the nature of payment of excise duty and hence, the provisions of the Central Excise Act for refund would not be applicable. Consequently, the provisions of section 11BB of the Central Excise Act which provides for interest on delayed refund, would not be applicable. It is settled legal position that in the absence of a statutory provision entitling the assessee to interest, a mandamus cannot be issued to the revenue to pay interest. Therefore, though the petitioner has claimed interest at the rate of 18%, the same is not backed by any statutory provision and hence, the relief prayed in the application to that extent cannot be granted. Application succeeds - petitioner entitled to get the refund only of amount deposited earlier, and no interest granted - in case such amount is not paid to the petitioner within a period of three months, the opponents shall be liable to pay interest at the rate of 18% to the applicant for the subsequent period till the date of actual payment.

Summary

Issues:
1. Refund of deposited amount with interest as per court order.

Analysis:
The applicant sought a direction for the opponents to refund the amount of ?2,91,000/- deposited on 26th August, 2014, following a court order from 6th December, 2013. The court had ordered the deposit without prejudice to the rights and contentions of the parties. A subsequent judgment on 26th September, 2014, allowed the petition, setting aside the demand raised against the petitioner. As the deposited amount was related to the outstanding dues of GSL (India) Limited, it was deemed necessary to return it to the petitioner. However, the court noted that the amount was not in the nature of excise duty payment, so the provisions for refund under the Central Excise Act did not apply. Consequently, the claim for interest at 18% could not be granted as there was no statutory provision supporting it. The court clarified that if the amount was not refunded within three months, interest at 18% would be payable by the opponents to the applicant until the actual payment date.

This judgment highlights the importance of adhering to court orders and the legal implications of depositing amounts during legal proceedings. It also underscores the significance of statutory provisions in determining the entitlement to interest on refunds, emphasizing that a mandamus cannot be issued for interest payment in the absence of a specific statutory provision.