9911796707
TMI Blog2016 (10) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... hs of receipt of such application, there would be no liability to pay interest. However, if the refund is granted after the expiry of the period of three months from the date of receipt of the application, then interest would also be payable on the amount of refund granted, from the date immediately after the expiry of three months from the date of receipt of such application, till the date of refund. The Petitioner would be entitled to interest on the sum of ₹ 44,46,42,651/- from the date immediately after expiry of three months from the date of receipt of the original refund applications till the date of receipt of the refund amount. The Petitioner entitled to a refund of ₹ 1,66,59,749/- being the remaining amount of the refund claim. The Petitioner directed to debit the Cenvat balance of ₹ 46,64,152/- from its Cenvat account - matter remanded for calculating and paying the interest as well as the refund of ₹ 1,66,59,749/- - petition allowed - decided in favor of petitioner. - Writ Petition No. 3555 of 2016 - - - Dated:- 7-10-2016 - S. C. Dharmadhikari And B. P. Colabawalla, JJ. Mr. Prakash Shah a/w Mr. Mihir Mehta i/b PDS Legal, for the Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly filed applications seeking refund of the unutilized CENVAT credit under Rule 5 of the Credit Rules in respect of the goods exported. 7. Accordingly, the Petitioner filed periodic refund applications under Notification No. 27/2012-Central Excise (N.T.) dated 18th June, 2012 (as amended) read with Rule 5 of the Credit Rules as under:- Period Date of Filing Amount October 2012 07/06/13 1,27,52,779/- November 2012 11/06/13 75,22,938/- December 2012 11/06/13 1,28,93,276/- January 2013 12/06/13 77,71,702/- February 2013 13/08/13 74,24,270/- March 2013 14/08/13 99,65,764/- April 2013 14/08/13 42,65,979/- May 2013 to June 2013 26/11/13 3,45,08,728/- July 2013 to September 2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng / granting the refund to the Petitioner under Section 11BB of the Act. It is in these circumstances that the present Writ Petition has been filed inter alia seeking a mandamus directing Respondent No.2 to forthwith sanction to the Petitioner the refund as claimed by them as well as interest on the delayed refund as per section 11BB of the Act. 10. After this matter was argued and reserved for judgement, the parties mentioned the matter and stated that as per the letter dated 29th September, 2016 issued by Respondent No.2, both parties have come to an agreement that the total refund due to the Petitioner is ₹ 44,46,42,651/- out of which ₹ 42,79,82,902/- has already been paid. Hence, the Petitioner is entitled to the balance refund of ₹ 1,66,59,749/-. It is further agreed that the petitioner shall debit the Cenvat balance of ₹ 46,64,152/- from its Cenvat account. This being the position, the only issue now to be decided by us is whether the Petitioner is entitled to any interest under section 11BB of the Act. 11. In this factual backdrop, Mr. Prakash Shah, learned counsel appearing on behalf of the Petitioner, submitted that the actions of Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of calculating and paying interest to the Petitioner in terms of section 11BB of the Act. 14. On the other hand, Mr Dwivedi, learned counsel appearing on behalf of Respondent Nos.2 and 3, submitted that the interest-free period of three months for processing the refund claim would start from the date of receipt of a complete refund application. Mr. Dwivedi submitted that in the facts of the present case, the Department will be liable to pay interest only from the date on which the revised refund claims were filed by the Petitioner. Mr. Dwivedi therefore disputed the period for which interest could be granted. Mr. Dwivedi further stated that the refund applications filed were rejected as they had not been filed in the prescribed manner as per the Act. The Petitioner had filed applications for refund on a monthly and bi-monthly basis and therefore, such application was rejected. Mr. Dwivedi stated that the authorities would be liable to pay interest only on a valid and complete refund application. In the facts of this case, such application was only received much later when the Petitioner filed its revised refund claim on a quarterly basis. Therefore, the Petitioner would be ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if any duty is ordered to be refunded under sub-section (2) of section 11-B of the Act to the applicant and the same is not refunded within three months from the date of receipt of such application under subsection (1) of section 11-B of the Act, then the applicant would be entitled to interest at such rate as more particularly stipulated in the said section. This interest would be payable immediately after the expiry of three months from the date of receipt of such application till the date of refund of the duty. In a nutshell, what this section stipulates is that, once an application for refund has been made and the same is granted within a period of three months of receipt of such application, there would be no liability to pay interest. However, if the refund is granted after the expiry of the period of three months from the date of receipt of the application, then interest would also be payable on the amount of refund granted, from the date immediately after the expiry of three months from the date of receipt of such application, till the date of refund. 17. We must make a note here that these very provisions under the Act came up for consideration before the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C [(1921) 1 KB 64] and Ajmera Housing Corpn. v.CIT [(2010) 8 SCC 739] .) 15. At this juncture, it would be apposite to extract a Circular dated 1-10-2002, issued by the Central Board of Excise and Customs, New Delhi, wherein referring to its earlier Circular dated 2-6-1998, whereby a direction was issued to fix responsibility for not disposing of the refund/rebate claims within three months from the date of receipt of application, the Board has reiterated its earlier stand on the applicability of Section 11- BB of the Act. Significantly, the Board has stressed that the provisions of Section 11-BB of the Act are attracted automatically for any refund sanctioned beyond a period of three months. The circular reads thus: Circular No. 670/61/2002-CX, dated 1-10-2002 F. No. 268/51/2002-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject.: Non-payment of interest in refund/rebate cases which are sanctioned beyond three months of filing - Regarding I am directed to invite your attention to provisions of Section 11-BB of the Central Excise Act, 1944 that wherever the ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On a harmonious reading of the provisions of sections 11-B and 11-BB along with the observations of the Supreme Court, it is abundantly clear that once a refund is granted to an applicant and the said refund is not given to the applicant within three months from the date of receipt of the refund application, the applicant would automatically be entitled to receive interest on the said refund, from the date immediately after the expiry of three months from the date of receipt of such refund application, till the date of refund of such duty. 19. Applying this law to the facts of the present case, we find that originally the Petitioner had made applications for refund on the various dates as set out above. However, these applications were not granted by Respondent No.2 on the ground that the activity undertaken by the Petitioner did not amount to manufacture and therefore, they would not be entitled to any refund. The Petitioner thereafter filed revised refund claims on quarterly basis at the instance of Respondent No.2. Previously, the Petitioner has filed the refund applications on monthly and bimonthly basis. What is important to note is that the rejection of refund was not on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
