Delhi High Court
Rajan Overseas vs Commissioner Of Central Excise & ... on 9 July, 2014
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 09.07.2014
+ W.P.(C) 2647/2014
RAJAN OVERSEAS ..... Petitioner
versus
COMMISSIONER OF CENTRAL EXCISE
& ANR. ..... Respondents
Advocates who appeared in this case:
For the Petitioner : Mr Rajiv Tuli with Mr Ankur Ved Tuli.
For the Respondents : Ms Sonia Sharma, Sr. Standing Counsel with
Mr Vijay Chandra.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIBHU BAKHRU
JUDGMENT
VIBHU BAKHRU, J (ORAL)
1. Issue notice.
2. Ms Sonia Sharma, Senior standing counsel accepts notice.
3. This writ petition has been filed to impugn an order dated 13.02.2014
passed by the Commissioner, Central Excise (Appeals) (hereinafter referred
to as the 'impugned order'). By the impugned order, the appeal filed by the
petitioner challenging the order of the Assistant Commissioner, Central
Excise rejecting the request of grant of interest on delayed refunds, was
rejected.
4. The limited controversy to be addressed in the present case is,
whether in the given circumstances, the petitioner is entitled for interest on
the refund sanctioned under Section 11B of the Central Excise Act, 1944
(hereinafter referred to as the 'Act') which was claimed by the petitioner
under Rule 18 of the Central Excise Rules, 2002 (hereinafter referred to as
the '2002 Rules').
5. Brief facts of the case are that the petitioner - M/s Rajan Overseas
Pvt. Ltd. is engaged in the manufacture and export of stainless steel cutlery
and utensils. During the relevant period, the said goods were exempted
from the payment of Central Excise Duty by a Notification No.10/2003-
Central Excise dated 01.03.2003. The petitioner had filed 16 rebate claims
under Section 11B of the Act read with Rule 18 of the 2002 Rules, claiming
refund of an aggregate amount of `16,17,527/- of the Additional Duty of
Customs or Countervailing Duty (in short CVD), on the raw material
imported and used in or in relation to the manufacture of the final products.
The Deputy Commissioner of Central Excise passed three orders (Order-in-
original No.R-190/ REF/ 08-09 dated 28.11.2008, R-191/ REF/ 08-09 dated
28.11.2008 and R-134/ REF/ 08-09 dated 21.10.2008) whereby the rebate
claims for amounting to `7,29,636/- were sanctioned under Section 11B of
the Act read with Rule 18 of the 2002 Rules and rebate claims amounting to
`8,80,332/- were disallowed, as it was considered that the CVD levied
under Section 3 of the Customs Tariff Act, 1985 was not duty in respect of
which rebate was admissible under Rule 18 of the 2002 Rules.
6. Aggrieved by the disallowance of the rebate claims, the petitioner
preferred three appeals against the order-in-originals before the
Commissioner of Excise (Appeals). By a combined order dated 17.07.2009,
the Commissioner of Central Excise (Appeals) dismissed the said appeals.
Against the order dated 17.07.2009, the petitioner preferred a revision
application before the Joint Secretary (Revision Applications), Government
of India and by an order dated 13.06.2012, the said revision application was
allowed and rebate claims for an amount of `8,80,332/- were sanctioned.
7. Pursuant to the order dated 13.06.2012, the Assistant Commissioner,
Central Excise sanctioned the refund of an amount of `8,80,332/- by an
order dated 15.09.2013.
8. Thereafter, the petitioner filed an application dated 15.10.2013
seeking interest at the rate of 8% p.a. or above, for the period the rebate
claims were pending with the respondent. In the said application, the
petitioner also referred to a common order passed by this court in WP(C)
No.3696/2011 and WP(C) No.3215/2011, decided on 17.09.2012, wherein
the court had allowed the refund of the amount alongwith interest at the rate
of 8% per annum from the expiry of two months from the date when the
claims were rejected by the first authority. By a order dated 17.12.2013, the
said application was rejected by Assistant Commissioner, Central Excise
and the petitioner was directed to take appropriate legal course to process
the claim of interest.
9. The petitioner filed an appeal before the Commissioner of Excise
(Appeals) challenging the rejection of the application for interest by the
Assistant Commissioner, Central Excise. The said appeal was also
dismissed by an order dated 13.02.2014; first of all, for the reason that the
petitioner had not challenged the order dated 13.06.2012 whereby refund
for an amount of `8,80,332/- was sanctioned without interest and, secondly,
for the reason that the order dated 17.12.2013 issued by the Assistant
Commissioner, Central Excise was not an appealable order.
10. Aggrieved by the same, the petitioner has filed the present writ
petition.
11. We have heard the learned counsel for the parties.
12. The petitioner has referred to a common order dated 17.09.2012
passed by this court in WP(C) No.3696/2011 and in WP(C) No.3215/2011,
whereby this court had disposed of said writ petitions in the following
terms:-
"(ii) That the disposal of direction in this case means that the
claim of the respondent that input against duty became
payable from the date the claim was rejected by the first
authority i.e. on 30.10.2008. In WP (C) 3696/2011 the said
date is 5.4.2007. Consequently, it is also clarified that the
Revenue shall make payment of interest on the said amount
in the case of Rs.10,74,449/- (WP(C) 3215/2011) w.e.f.
1.1.2009 till date of deposit in this Court i.e. 31.5.2011.
Revenue shall also ensure that balance sum of Rs.74,449/-
together with interest for the said sum from 31.5.2011 till
date @ 8% shall be paid, over and above the interest for
the period 1.1.2009 to 31.5.2011 within four weeks from
today.
(iii) In the case of WP (C) 3696/2011, since the entire deposit of
Rs.16,73,018/- was made on 21.6.2011, the sum in addition
to the principal along with interest accrued in Court would
be payable from 1.6.2007 till 21.6.2011 @ 8% on the said
amount of Rs.16,73,018/-. This too shall be paid to the
respondent no.2/applicant within four weeks from today."
13. As is apparent from the above quoted order, this court had allowed
the refund of the duty alongwith interest from expiry of two months from
the date when the claim was first rejected by the concerned Authority.
14. In the present case, the claim of the refund of the additional duty
deposited by the petitioner was rejected by the Deputy Commissioner of
Central Excise by its orders dated 28.11.2008 and 21.10.2008. The claim of
the petitioner that it is entitled to rebate of CVD is no longer res integra
and the said question has been decided in favour of the petitioner, albeit,
after a considerable lapse of time. In the present case, there has been an
inordinate delay in allowing the rebate claims filed by the petitioner
considering that the raw materials were imported almost eight years ago. In
view of the above and following the decision of this court in WP(C)
No.3696/2011 and in WP(C) No.3215/2011, it is appropriate that interest at
the rate of 8% be granted to the petitioner on the refund sanctioned by the
authority from the expiry of three months from the date when the claim was
first rejected by the concerned Authority.
15. Accordingly, the present petition is allowed and the interest at the
rate of 8% is granted to the petitioner on the sum of `8,80,332/- from the
expiry of three months from the date when the claim was first rejected by
the concerned Authority till the refund of the amount.
16. With the aforesaid directions, the present petition stands disposed
of.
VIBHU BAKHRU, J
S. RAVINDRA BHAT, J
JULY 09, 2014
RK
