9911796707
TMI Blog2008 (12) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... hhkhanwalla, Sr. Advocate, with Devang Nanavati for Nanavati Nanavati, for the Petitioner. Shri Harin P. Raval, A.S.G. and Hriday Buch, for the Respondent. JUDGMENT This petition is filed by a company incorporated under the Companies Act, having its registered office at the address mentioned in the cause title. The 2nd petitioner is the Manager of the 1st petitioner-company (hereinafter referred to as the petitioner or the petitioner company ) . The petitioner-company is in the business of manufacture of Nycil prickly heat powder at its factory in Umbergaon, Gujarat. 1.1 The petitioner classified the said goods under the Tariff Heading No. 30.03 of the Central Excise Tariff Act. It is the case of the petitioner-company that the Central Excise Range at Surat, in-charge of the petitioners factory, incorrectly sought to classify the said goods under Chapter Heading No. 33.04. The Central Excise Department recovered a sum of Rs. 4,78,45,990.30 towards excise duty on the said goods on the basis of the said goods being classified under Chapter Heading No. 33.04. 2. The petitioner-company challenged the classification of the said goods before the Delhi High Court. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioners filed cross-objection to the said appeal filed by the department before the CESTAT. In the said cross-objection, the petitioners set out in detail the calculation of interest up to 15-2-2004, which amounted to Rs. 2,13,36,689.84. 6. It is the case of the petitioners that as the Central Excise Department did not comply with the order of refund passed in favour of the petitioners by the Commissioner (Appeals) and though the CESTAT had rejected the Stay Application filed by the department, the petitioners were constrained to file a writ petition before this Court being Special Civil Application No. 8375 of 2004 seeking compliance of the said refund order. It is also the case of the petitioners that in the said writ petition, the petitioners had claimed, inter alia, interest for the delayed period of refund. However, by order dated 11-1-2004 (Annexure-C), this Court was pleased to dismiss the said petition holding that, the same was pre-mature on account of pendency of the department s appeal before the CESTAT . (emphasis supplied), but was pleased to order expeditious disposal of the department s appeal. 7. The learned senior advocate for the petitioners submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court was pleased to dismiss the said appeal by order dated 18-7-2005 [2008 (222) E.L.T. 511 (Guj.)]. 11. The learned senior advocate for the petitioners submitted that it is only thereafter that the Central Excise Department paid to the petitioner the principal amount of refund of Rs. 4,78,45,990.30 in or about July/August 2005. The learned senior advocate for the petitioners submitted that the department did not pay any interest whatsoever to the petitioners. 12. The case of the petitioners is that when the aforesaid Misc. Application filed by the petitioners came up for hearing before the CESTAT, the petitioners were orally informed by the Tribunal that since Gujarat High Court was pleased to dismiss the department s appeal by order dated 18-7-2005, the petitioners ought to have approached the Gujarat High Court for seeking an order in respect of the interest amount which had not been paid by the department. The Misc. Application filed by the petitioners was disposed of by the CESTAT by observing that, the Commissioner (Appeals) or the Tribunal in the order had not granted interest . 13. The learned senior advocate for the petitioners submitted that even at the cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by an Order and injunction to call upon the Respondent to forthwith pay to the Petitioner the said total amount of Rs. 2,53,81,156.02 by way of statutory interest as set out in the Petition on such terms and conditions as this Hon ble Court may deem fit and proper in the facts and circumstances of the case. (e) For ad interim relief in terms of prayer (c) above; (f) For costs of the Petition and orders thereon; and (g) For such further and other reliefs, as this Hon ble Court may deem fit and proper in the nature and circumstances of the case. 15. Thereafter, Civil Application (for amendment) No. 1402 of 2007 was filed, wherein this Court (Coram: Hon ble Mr. Justice J.M. Panchal Hon ble Smt. Justice Abhilasha Kumari) passed order on 21-2-2007, pursuant to which paragraphs 15(1) and 15(B), grounds (L) to (X) and prayer 24(cc) were added. For ready perusal, order dated 21-2-2007 is reproduced herein below :- 1. Rule. Mr. Harin Raval, learned Assistant Solicitor General of India, waives service of notice on behalf of the respondents. Having regard to the facts of the case, the application is heard today. 2. By filing the instant application, the applicants have pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it will be open to the respondents to file reply to the amended petition and contend that the challenge to the order passed by the CESTAT on October 5, 2006, is not maintainable in the instant petition. Subject to the abovereferred to clarification, Rule is made absolute. There shall be no orders as to costs. (emphasis supplied). 17. As the record shows, the amendment was carried out on 27-2-2007, incorporating paragraphs 15(A) to 15(G), grounds (L) to (ZD) and prayer clauses 24(cc) and 24(ccc). For ready perusal, prayer clauses 24(cc) and (ccc) are reproduced hereinbelow :- 24(cc) That this Hon ble Court would be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ order or direction quashing and setting aside the order dated 22nd August 2005 at annexure G to the Petition passed by the CESTAT to the extent it refused to give any direction to the adjudicating authority for grant of statutory interest. 24 (ccc) That this Hon ble Court would be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other approached writ order or direction quashing and setting aside the order dated 5th October, 2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. That there is a remedy under Section 35G of the Central Excise Act, 1944 against the order rendered by Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as CESTAT) by way of preferring a tax appeal. Under the circumstances, no writ petition is maintainable to challenge an order rendered by the Hon ble CESTAT. It is submitted that the said order dated 22-8-2005 was rendered in application No. E/MA (ORS)/996/1742/03, in Appeal No. E/71/04. The order records that Misc. Civil Application dated 1-4-2005 was filed by the appellant, namely, Manisha Pharmo Plast Private Ltd., seeking direction for refund of a sum of Rs. 4,78,45,990.38 ps. being the principal amount along with interest of Rs. 2,13,36,689.84 ps. as calculated upto 15-2-2004 and further interest from 16-2-2004 at the prescribed rate. The order records that another Misc. Civil Application dated 04-07-2005 had been filed by the department requesting to grant extension of time for implementation of the final order dated 12-01-2005 of the tribunal ordering refund. That the Hon ble CESTAT after hearing both the parties clearly recorded in para-3 the following findings. It is seen that neither the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or filed till January, 2007. That it is by way of prayer prayed in C.A. No. 1402/2007, that the amendment was sought for so as to introduce prayer 24(cc) seeking a relief for quashing and setting aside the order dated 22nd August, 2005. Without prejudice to the contention that the order of the Hon ble CESTAT cannot be challenged in a writ petition under Article 226 of the Constitution of India, it is submitted that such a challenge at a belated stage is barred by delay, latches and acquiescence. It is respectfully submitted that the petitioners who cannot deny knowledge of law, are very well aware that the tax appeal is maintainable under Sec. 35G, which is required to be filed within a statutory period of 180 days, such a belated amendment appears to have been filed. That even if a tax appeal was preferred in August, 2006, the same would have been barred by delay and latches and under the circumstances, the petitioners are not entitled to the amended writ as prayed for while challenging the order of the CESTAT dated 22nd August, 2005. I, therefore, respectfully submit that both on the ground of maintainability of a writ petition and on the ground of delay, latches and acquiescence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard s circular were in existence prior to the issuance of the Tribunal s order and were also brought to the notice of the Tribunal at the time of filing of first Misc. application seeking similar relief, which was dismissed on 22-8-2005. The Hon ble Tribunal held that no new facts have come into existence and under the circumstances, it was held that the applicants should have sought for interest from the department and on their failure to do so, ask for an issuance of an appealable order and should follow the procedure for filing the appeal against denial of interest. The Hon ble Tribunal clearly held that in the present case, there was no order for payment of interest by the Commissioner (Appeals) or by the Tribunal and since the earlier application stood dismissed, the subsequent application made for the same relief came to be dismissed by order dated 5-10-2006, a copy whereof is hereto annexed and marked as ANNEXURE-R4. 9. I respectfully submit that in view of the aforesaid order, the repeated application stood rejected. That though this order was pronounced on 5-10-2006, no steps were taken to challenge the same by way of filing an appeal under Section 35G of the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the petition is not maintainable. That the Commissioner (Appeals) vide his order dated 1-10-2003 did not grant any relief qua interest and therefore, the petitioners having failed to challenge the said order in so far as it did not grant any relief as regards interest, are not entitled in law to the prayers as prayed for in the present petition. I submit that the petitioners, for the first time, after the judgment of the Hon ble Delhi High Court in May, 1999 rendered in Civil Writ Petition No. 1320/1998, filed an application dated 30th December, 1999, which was received on 17th January, 2000 praying for grant of refund. That within a period of three months from the date of receipt of the application, a show-cause notice dated 7-4-2000 was issued calling upon the petitioners to show-cause as to why the refund claim should not be rejected under Section 11B of the Central Excise Act, 1944 as well as calling upon to show-cause why it should not be rejected under Section 11D read with Section 12B of the Act and further calling upon the petitioners to show-cause as to why it should not be rejected under Section 11B(1) of the Act on the ground as the petitioners failed to file the ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the petitioners a sum of Rs. 4,78,45,990/- under Section 11(B) of the Act by way of payment in cash/cheque to tune of Rs. 3,23,04,628/- and by way of allowing credit in the Cenvat Credit account to the tune of Rs. 1,55,41,36/. A copy of the said order is hereto annexed and marked as ANNEXURE-R5. The said order did not grant any interest. The said order is an appealable order and the petitioners were informed by way of statement contained in the said order that the same was an appealable order. The petitioners have chosen not to challenge the said order by way of an appeal and, therefore, the petitioners have acquiesced in the said order to only grant refund but not interest. Under the circumstances, the petitioners are disentitled to the reliefs prayed for. It be stated that consequent upon the said order dated 25-5-2005, the petitioners have already been paid the amount. Under the circumstances, in view of the above facts, the petitioners are not entitled to any relief as prayed for in the petition and the petition deserves to be dismissed. 21. Coming to law, the learned senior advocate for the petitioners submitted that the law is very clear on the point. The learned senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Guj.). The learned senior advocate for the petitioners invited attention of the Court to paragraphs Nos. 9 to 12 of the decision. The learned senior advocate for the petitioners submitted that as was directed in that case in para-12, the respondents be directed to pay the petitioners interest at the rates applicable and with a specific direction that the amount of interest shall be calculated within one month from the date of receipt of the writ of this Court and the actual payment of interest so calculated shall be made within one month thereafter, i.e. within two months from the date of receipt of the writ of this Court. The learned senior advocate for the petitioners submitted that similar direction as was given in that decision be also issued in this case, whereby liberty was reserved in favour of the petitioners to move this Court for claiming interest on interest. 22.1 The learned senior advocate for the petitioners also relied upon a decision of the Rajasthan High Court in the matter of J.K. Cement Works v. Asstt. Commissioner of Central Excise Customs, reported in 2004 (170) E.L.T. 4 (Raj.). The learned senior advocate for the petitioners submitted that the Rajasthan Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of interest indicated in the writ petition to furnish a ground for issuance of a writ of mandamus. We may also add that the Tribunal s order did not by itself indicate the precise liability of the revenue to refund any specific amount to the respondent so as to give rise thereby to a liability to refund any specified amount on the date of the Tribunal s order. (emphasis supplied) 24. Having heard the learned counsel for the parties and having perused the pleadings of the parties, including the affidavits in reply filed by the respondent-authorities, the first question which arises for consideration of this Court is as to whether the department is liable to pay interest on delayed payment of refund and second question is that if the answer to the first question is in affirmative, form which date the interest on refund is to be allowed. 25. Taking the first question for consideration, so far liability to pay interest is concerned, Section 11BB of the Central Excise Act, 1944 is clear. It provides for payment of interest to the applicant in whose favour there is an order of refund of the duty paid by him and which is not refunded within three months from the date of applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision in the statute that the Hon ble the Apex Court had held that the High Court has no power to issue a writ of mandamus directing the payment of interest on the refund amount. He submitted that these observations should be construed to mean that now when Section 11BB is placed on the statute Book, it is not only open to the High Court to issue a writ of mandamus for the payment of interest on refund amount but a writ of mandamus will be required to be issued to serve the ends of justice. 27. The learned senior advocate for the petitioners submitted a decision of the CESTAT, Principal Bench, New Delhi in the matter of Commissioner of Customs, Kolkata (Port) v. Rishi Electronics Ltd., wherein it is laid down that the rate of interest of refund from time to time has to be on the basis of the statutory rate of interest and interest cannot be awarded at a flat rate. This judgment was submitted by the learned senior advocate for the petitioners by note dated 27-3-2008, a copy of which was served to the learned Assistant Solicitor General of India Mr. Harin P. Raval. The learned senior advocate for the petitioners submitted that there, it was the plea of the revenue itself tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a writ petition under Article 226 of the Constitution of India. This Court is of the opinion that in view of the liberty reserved by order dated 21-2-2007, passed in Civil Application No. 2738 of 2008, it is open for the revenue to question the maintainability to the challenge to order dated 5-10-2006 in a writ petition. To allow the challenge to order dated 5-10-2006 by amendment in a pending petition will amount to do away with the bar created by delay, latches and acquiescence. A fact which cannot be denied by the petitioners is that order dated 5-10-2006 was not challenged by then until the same was sought to be challenged by moving amendment in a pending petition in the year 2007. This Court is conscious of the fact that while allowing the application for amendment by order dated 21-2-2007, the Court reserved liberty in favour of the revenue to question the challenge to the said order before this Court. Allowing to challenge either order dated 22-8-2005 or order dated 5-10-2006 will amount to doing away with the statutory period prescribed for filing an appeal against such order, which is 180 days. 31. Coming to the crux of the matter, what is required to be seen is that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
