Gujarat High Court
M/S Intas Pharmaceuticals Ltd vs Union Of India on 13 November, 2025
Author: A. S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11983 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 17529 of 2013
With
R/SPECIAL CIVIL APPLICATION NO. 11984 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 11985 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 11986 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 11987 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 11988 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 11989 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 12314 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 12315 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 6900 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 3789 of 2025
With
R/SPECIAL CIVIL APPLICATION NO. 3793 of 2025
With
R/SPECIAL CIVIL APPLICATION NO. 3812 of 2025
With
R/SPECIAL CIVIL APPLICATION NO. 3994 of 2025
With
R/SPECIAL CIVIL APPLICATION NO. 4028 of 2025
With
R/SPECIAL CIVIL APPLICATION NO. 4030 of 2025
With
R/SPECIAL CIVIL APPLICATION NO. 4042 of 2025
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R/SPECIAL CIVIL APPLICATION NO. 4368 of 2025
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R/SPECIAL CIVIL APPLICATION NO. 4369 of 2025
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R/SPECIAL CIVIL APPLICATION NO. 4370 of 2025
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R/SPECIAL CIVIL APPLICATION NO. 4371 of 2025
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NEUTRAL CITATION
C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025
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R/SPECIAL CIVIL APPLICATION NO. 4381 of 2025
With
R/SPECIAL CIVIL APPLICATION NO. 4395 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA Sd/-
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI Sd/-
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Approved for Reporting Yes No
✔
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M/S INTAS PHARMACEUTICALS LTD & ANR.
Versus
UNION OF INDIA & ORS.
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Appearance:
MR S.N. SOPARKAR, SENIOR ADVOCATE with
MR HASIT DAVE(1321) for the Petitioner(s) No. 1,2
MR CB GUPTA(1685) for the Respondent(s) No. 1,2,3
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 13/11/2025
COMMON ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. At the outset, learned advocates appearing for the respective parties have submitted that the issue is squarely covered by the judgment of this Court dated 21.09.2023 passed in Special Civil Application No.3631 of 2013 and allied matters.
2. It is noticed by us that, at the time of admission, the Court, vide order dated 19.01.2017, had directed that the present matters be heard along with Special Civil Application Nos. 3631 of 2013 and 17529 of 2013. It is further noticed that Special Civil Application No.3631 of 2013 has already been Page 2 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025 NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined decided by this Court vide common judgment dated 21.09.2023. Accordingly, it is urged that the present petitions may also be disposed of in terms of the aforesaid judgment. However, learned Senior Advocate Mr.Soparkar, appearing for the petitioners, has submitted that a new issue regarding the payment of interest has arisen subsequent to the said judgment was passed. While placing reliance on the judgment of this Court in the case of Kamakshi Tradexim (India) Private Limited Vs. Union of India, (Special Civil Application No.19916 of 2016, decided on 15.03.2017) [reported in (2017) 351 E.L.T. 102 (Guj.)], it is submitted that the interest under Section 11BB of the Central Excise Act, 1944 (for short, "the Act"), commences from the date of expiry of three months from the date of receipt of the refund application under Section 11B(1) of the said Act. Hence, it is urged that the said aspect may be appropriately clarified.
3. Learned Senior Advocate Mr.Soparkar, on instructions of learned advocate Mr.Hasit Dave, has submitted that the petitioners do not claim any interest on the amount deposited in the Central Value Added Tax (CENVAT) credit account. It is further submitted that the petitioners have not raised any issue with regard to the transfer of the CENVAT credit to the TRAN-1 under the GST regime.
4. Learned advocate Mr.C.B. Gupta, appearing for the respondent-authorities, is unable to controvert the fact that the issue is squarely covered by the decision dated 21.09.2023 passed in Special Civil Application No. 3631 of 2013 and allied matters. However, with regard to the clarification concerning Page 3 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025 NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined the grant of interest, he has submitted that since the Coordinate Bench has not passed any specific order on that aspect, the Court may not record anything in this regard.
5. It is not in dispute and is fairly admitted by the learned advocates appearing for the respective parties, that the issue raised in the present petitions is no longer res integra and stands concluded by the judgment dated 21.09.2023 passed in Special Civil Application No.3631 of 2013 and allied matters, wherein the Coordinate Bench has placed reliance upon the judgment of this Court in the case of Arvind Limited Vs. Union of India, [2014 (300) ELT 481 (Guj.)], which has been affirmed by the Supreme Court in the case of Union of India Vs. Arvind Limited, [2017 (352) ELT A21 (SC)].
6. The relevant observations of the Division Bench are as under : -
"[11] Having heard the learned advocates appearing for the respective parties and considering the facts of the case, it is not in dispute that the issue with regard to availing the benefit is no more re integra and the petitioner cannot be denied the claim of rebate on the ground that the payment of duty was at the will of the assessee as per the beneficial Notification for export of the goods. The export rebate is permissible as the petitioner has paid duty at the time of export, as final products manufactured by the petitioner were exempted from payment of duty by Notification No.29/2004- CE as amended by Notification No.58/2008-CE. However, the petitioner availed the benefit of concessional rate of duty under the Notification No.59/2008-CE, which exempted the goods manufactured by the petitioner at a concessional rate of duty and thereafter, the claim of rebate was made. The revenue authority rejected the claim on the ground that payment of duty on final products exported could not have been paid as per the will of the assessee. This Court, considering such issue, in the case of Arvind Limited (supra), has held as under:
"9. On, thus, having heard both the sides and on examination Page 4 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025 NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined of the material on record, the question that involves in these petitions is the wrong availment of the benefit of concessional rate of duty vide Notification No.59/2008 dated December 07, 2008. Admittedly, the final products were exempted from payment of duty by original Notification No.29/2004-CE dated July 09, 2004 as further amended vide Notification No.59/2008-CE dated December 07, 2008. The fact is not being disputed by the respondents that the petitioner availed Notification No.59/2008 for clearance made to export and thereafter filed various rebate claims. It is, thus, an undisputed fact that the petitioner on final products discharged the duty liability by availing the benefit of Notification No.59/2008 and as has already been noted in the record, it has reversed the amount of Cenvat Credit taken by it on the inputs used for manufacturing of such products. Thus, when the petitioner is not liable to pay duty in light of the absolute exemption granted under Notification No.29/2004 as amended by Notification No.59/2008-CE read with the provision of Section 5A(1A) of the Act and when it has not got any other benefit in this case, other than the export promotion benefits granted under the appropriate provision of the Customs Act and Rules (which even otherwise he was entitled to without having made such payment of duty), we are of the firm opinion that all the authorities have committed serious error in denying the rebate claims filed by the petitioner under Section 11B of the Act read with Rule 18 of the Rules. The treatment to the entire issue, according to us, is more technical rather than in substance and that too is based on no rationale at all.
10. We also cannot be oblivious of the fact that in various other cases, the other assessees have been given refund/rebate of the duty paid on inputs used in exported goods. The stand of the Revenue is also not sustainable that the payment of duty on final products exported at the will of the assessee cannot be compared with other type of cases of refund/rebate of duty. Admittedly, when the petitioner was given exemption from payment of whole of the duty and the petitioner if had paid duty at the time of exporting the goods, there is no reason why it should be denied the rebate claimed which otherwise the petitioner is found entitled to. We are not going into the larger issues initially argued before us as subsequently the Revenue has substantially admitted the claim of rebate of excise duty and has not resisted in substance such claim of rebate."
[12] The Hon'ble Supreme Court has affirmed the above Page 5 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025 NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined judgement of this Court as stated hereinabove, by dismissing the Special Leave to Petition filed by the Union of India reported in 2017 (352) ELT A21 (SC), wherein it is held that the benefit of export rebate could not be denied to the exporter who paid duty on the exported product despite same being fully exempted under Notification No.29/2004 as amended by Notification No.59/2008-CE.
[13] The Hon'ble Apex Court, in the case of H.C.L. Limited vs. Collector of Customs, New Delhi reported in 2001 (130) ELT 405 (SC), has held that as per the order of the Hon'ble Apex Court in Collector of Central Excise, Baroda vs. Indian Petro Chemicals [1997] (92) ELT 13], there are two exemption notifications that cover the goods in question and the assessee was entitled to the benefit of that exemption notification which gives him greater relief, regardless of the fact that notification is general in its terms and the other notification is more specific to the goods.
[14] In the case of Zenith Spinners (supra), the Division Bench of this Court, while dealing with the option available to the assessee to exercise as per the payment of duty under Rules 18 and 19 of the Rules, has held as under:
"9. Rules 18 and 19 of the Rules read as under:
"Rule 18. Rebate of duty. -- Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification.
Explanation. - Export includes goods shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft.
Rule 19. Export without payment of duty.-- (1) Any excisable goods may be exported without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, as may be approved by the Commissioner.
(2) Any material may be removed without payment of duty from a factory of the producer nor the manufacturer or the warehouse or any other premises, for use in the manufacture or processing of goods which are exported, as may be Page 6 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025 NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined approved by the Commissioner.
(3) The export under Sub-rule (1) or Sub-rule (2) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board."
10. Rule 18 of the Rules stipulates that where any goods are exported the exporter becomes entitled to rebate of duty which may be granted by way of a notification issued by the Central Government. The rebate is of duty paid on final products or duty paid on inputs used in the manufacture or processing of such final products viz. the goods which are exported. The notification is to contain such conditions or limitations and prescribe such procedure, upon fulfillment of which, the rebate shall be granted. Thus, on a plain reading Rule 18 provides a complete code by itself in relation to rebate of duty that an exporter can claim on export of goods.
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14. There is one more reason. As can be seen from reading of Sub- rule (1) and Rule (2) of Rule 19 of the Rules the opening portion grants an option to the exporter by virtue of the language used. In Sub-rule (1) it is stated Any excisable goods may be exported, and in Sub-rule (2) it is stated Any material may be removed. Therefore, the exporter has an option to export the final products without payment of duty or use inputs which are procured without payment of duty in the manufacture or processing of goods which are to be exported. At the other end, the later portion of Sub-rules (1) and (2) of Rule 19 of the Rules grants discretion to the Commissioner to approve the option that is exercised by an exporter by use of the phrase "as may be approved". If the interpretation which is placed on the provision by the respondent authorities by issuance of impugned Notification is accepted, it would not only take away the option granted to the exporter but also take away the discretion granted to the Commissioner by the Rule. It is settled position that by virtue of exercise of powers of issuing a notification which is for the purposes of imposing conditions, safeguards and procedure the authority cannot exceed the jurisdiction by providing for a situation which either restricts the rights granted under the Rule itself or make the Rule itself redundant."
[15] Resultantly, all these petitions are allowed quashing and setting aside the impugned orders by further directing the respondents to grant the petitioners the rebate, as claimed, after calculating interest, as may be applicable in accordance with law, within a period of 12 weeks from the date of receipt of the copy of this order.
[16] The contention raised on behalf of the petitioner that in view of Page 7 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025 NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined the implementation of the GST regime, the refund may be paid in cash is concerned, the Division Bench of this Court, in the case of Thermax Limited (supra), in such circumstances, has held as under:
"10. It is thus eminently clear from the aforesaid observations made in the impugned order that the duty, which was paid by the petitioner, which was otherwise not payable on the exported goods and therefore, rebate of such duty was not admissible in terms of Rule 18 of the Central Excise Rules. However, the duty, which was paid by the petitioner is held to be treated as voluntary deposit. As per Section 142(3) of the GST Act, every claim for the refund filed by any person before, on or after the appointed day i.e. 01.07.2017 for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, should be disposed of in accordance with the provisions of existing law and any amount eventually accruing to such person should be paid in cash. We are of the considered opinion that in view of this clear provision, the respondent No.2 ought to have directed the sanctioning Authority to refund the amount of the duty refundable to the petitioner in cash instead of credit in CENVAT Account.
11. In case of M/s. Lanxess India Pvt. Ltd. (Supra), the Commissioner (Appeals) has directed the sanctioning Authority to refund in cash. As per the GST transition provisions, the balance of credit lying un-utilized in account as on 30.06.2017 only gets carried forward. Hence, in the present case also, what was lying in CENVAT account of the petitioner before 10.07.2017 was to be carried forward in fresh account of CENVAT account after appointed day i.e. 01.07.2017.
12. We are therefore, of the considered view that the respondent No.2 ought to have directed the sanctioning Authority to refund the duty of the amount in cash instead of credit in the CANVAT account.
13. For the foregoing reasons, the petition succeeds and is hereby allowed. The impugned order passed by the respondent No.2 in No.24/2017-CX(WZ)/ASRA/Mumbai dated 27.12.2017 is partly modified to the extent that instead of crediting the duty in the CENVAT account of the petitioner, the sanctioning Authority is directed to refund the amount in cash to the petitioner."Page 8 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025
NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined [17] Considering the above observations made by the Division Bench of this Court, the respondents are directed to refund the amount payable to the petitioners with interest in cash instead of credit in the Electronic Credit Ledger account as no CENVAT credit account exists as on date with effect from 1st July 2017.
[18] All the petitions are, accordingly, disposed of. Rule is made absolute to the aforesaid extent with no order as to costs."
7. As recorded hereinabove, the Coordinate Bench, after setting aside the action of the respondents, ultimately directed the respondents to refund the amount payable to the petitioners with interest in cash, instead of crediting the same to the Electronic Credit Ledger account, since no CENVAT credit account existed with effect from 01.07.2017.
8. However, with regard to the aspect of interest, as recorded in paragraph No.15 of the said judgment, the Coordinate Bench has directed the respondents to grant to the petitioners the rebate, as claimed, after calculating the interest, as may be applicable in accordance with law, within a period of twelve weeks from the date of receipt of a copy of the order.
9. At this stage, it would be apposite to refer to the observations made by this Court in the case of Kamakshi Tradexim (India) Private Limited (supra), wherein the Coordinate Bench, after examining the provisions of Section 11BB of the Central Excise Act, 1944 which pertains to interest on delayed refunds under sub-section (2) of Section 11B of the Act, held as under:
"8. Thus, the Supreme Court, in the above decision has clearly held that the liability of the Revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of Page 9 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025 NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined the Act and not on the expiry of the said period from the date on which the order of refund is made. Under the circumstances, the contention advanced by the respondents that the orders sanctioning rebate having been passed and the amount having been paid within the time limited stipulated by the High Court in its judgment and order dated 18.02.2016 made in Special Civil Applications No.14616 of 2015 and No.14617 of 2015, the petitioners are not entitled to interest under Section 11BB of the Act, cannot be countenanced even for a moment. In the facts of the present case, initially the respondents had kept the rebate claims of the petitioners in abeyance, due to which the petitioners were constrained to approach this court and with a view to obviate any further delay in deciding the application, in the light of the observations made in its judgment and order dated 18.02.2016 made in the above referred writ petitions, this court had directed the concerned authority to decide the rebate applications within a period of four months from the date of receipt of the said order. When the statute clearly provides that interest shall be payable on the expiry of a period of three months from the date of receipt of the application under sub- section (1) of Section 11BB of the Act, merely because this court had stipulated the period within which the concerned respondent should decide the application, the same would not operate in favour of the respondents and against the petitioner and curtail the statutory period prescribed under Section 11BB of the Act.
9. Moreover, it is settled legal position that an interpretation of any provision of law by the Supreme Court is the law of the land and the respondents are duty bound to respect and follow the same. When the Supreme Court way back on 21.10.2011 has, in the case of Ranbaxy Laboratories Ltd. v. Union of India (supra), held that interest shall be payable on the expiry of a period of three months from the date of receipt of the application under sub-section (1) of section 11BB of the Act and not on the expiry of the said period from the date on which the order or refund is made, the respondents cannot be heard to contend otherwise. The approach of the respondents, therefore, borders on being contumacious. In the opinion of this court, if the respondent authorities duly follow the decisions of the Supreme Court and the jurisdictional High Courts, such unnecessary litigation could be obviated and precious judicial time of the court would not be wasted and assessees like the petitioner would not be subjected to undue harassment without any justification. The respondent authorities are, therefore, not justified in refusing to grant interest on the rebate claims made by the petitioners in accordance with law laid down by the Supreme Court in Ranbaxy Laboratories Ltd. v. Union of India (supra) and hence, the petitions deserve to be allowed in terms of the relief prayed for by the petitioners.Page 10 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025
NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined
10. For the foregoing reasons, the petitions succeed and are, accordingly, allowed. The respondents are directed to sanction and pay to the petitioners, interest on the delayed payment of rebate in accordance with law, within a period of four weeks from the date of receipt of a copy of this judgment. Rule is made absolute in both the petitions, accordingly, with no order as to costs."
10. The findings recorded in the aforesaid judgment have not been controverted by the other side. Even otherwise, on a plain reading of the provisions of Section 11BB of the Act, the petitioners would be entitled to interest under the said provision from the date of expiry of three months from the date of receipt of the application for refund under Section 11B(1) of the Act, and not merely from the date on which the order of refund is made.
11. Accordingly, the present writ petitions are disposed of with a clarification that the petitioners shall be entitled to payment of interest in terms of the judgment of the Coordinate Bench of this Court in the case of Kamakshi Tradexim (India) Private Limited (supra). However, as consented to by learned advocate Mr. Hasit Dave, appearing on behalf of the petitioners, it is clarified that the petitioners shall not claim any interest on the amount deposited in the CENVAT credit account.
12. The respondent-authorities shall pass necessary orders for payment of interest, as directed hereinabove, within a period of TWELVE (12) WEEKS from the date of receipt of the writ of this judgment. The impugned orders passed by the respondent-authorities are hereby quashed and set aside. It is Page 11 of 12 Uploaded by MAHESH OMPRAKASH BHATI(HC01086) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 22:01:22 IST 2025 NEUTRAL CITATION C/SCA/11983/2016 JUDGMENT DATED: 13/11/2025 undefined further clarified that the amount deposited in the CENVAT credit account shall not carry any interest, as stated by the petitioners, however, the interest on the remaining refundable amount shall be paid in cash in accordance with law. Rule is made absolute to the aforesaid extent.
Direct service is permitted.
Sd/-
(A. S. SUPEHIA, J) Sd/-
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