Gujarat High Court
M/S Five Star Agrico Pvt. Ltd vs Union Of India on 16 February, 2022
Bench: J.B.Pardiwala
C/SCA/633/2022 ORDER DATED: 16/02/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 633 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 789 of 2022
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M/S FIVE STAR AGRICO PVT. LTD.
Versus
UNION OF INDIA
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Appearance:
MR HARDIK P MODH(5344) for the Petitioner(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 1,3
PRIYANK P LODHA(7852) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 16/02/2022
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
1. Since the issues raised in both the captioned writ
applications are the same, those were taken up for
hearing analogously and are being disposed of by this
common order.
2. For the sake of convenience, we treat the Special
Civil Application No.633 of 2022 as the lead matter.
3. By this writ application under Article 226 of the
Constitution of India, the writ applicant has prayed for the
following reliefs;
"(A) That this Hon'ble Court be pleased to issue Writ
of Certiorari or a writ in the nature of Certiorari or
any other appropriate writ or direction to call upon
the records of order-in-original
C/SCA/633/2022 ORDER DATED: 16/02/2022
No.06/Ref/CGST/AC/HMT/2021-22 dated 17.11.2021
passed by Respondent No.3 and after going into the
legality, validity and propriety thereof, order the
Respondent No.3 to sanction interest under Section
11BB of the Central Excise Act, 1944 on the refund
sanctioned under Section 11B of Central Excise Act,
1944;
(B) That this Hon'ble Court be pleased to issue Writ
of Mandamus or a writ of Mandamus or any other
appropriate writ order or direction to the Respondent
to sanction interest under Section 11BB of the
Central Excise Act, 1944 on the refund sanctioned
under Section 11B of Central Excise Act, 1944;
(C ) For costs of the petition and orders thereon; and
(D) For such further and other reliefs, as this
Hon'ble Court may deem fit and proper in the facts
and circumstances of the case."
4. We need not delve much into the facts giving rise to
this litigation as the issue involved in the case on hand is
no longer res integra.
5. The writ applicant is a private limited company
incorporated under the Companies Act, 1956 (fort short
"the Act, 1956") and is engaged in the manufacture and
export of various kind of hand tools like spades, shovels,
picks, hoes etc. used in the agriculture, horticulture or
forestry.
6. It is the case of the writ applicant that the above
items, at the relevant point of time, were covered under
the Chapter Heading 82013000 to the first schedule of the
C/SCA/633/2022 ORDER DATED: 16/02/2022
Central Excise Tariff Act, 1985. The aforesaid goods
manufactured by the writ applicant were exempted from
the whole of the central excise duty leviable thereon
under the Notification No.41/2001-C.E. (N.T.) dated
26.06.2001 (Superseded vide Notification No.23/2004-CE
dated 09.07.2004 and thereafter vide Notification
No.05/2006-CE dated 01.03.2006 (superseded vide
Notification No.12/2012-CE dated 17.03.2012) issued
under sub-section (1) of Section 5A of the Central Excise
Act, 1944.
7. Essentially, the challenge in the present writ
application is to the order-in-original dated 17.11.2021
passed by the respondent No.3, wherein the respondent
No.3 although sanctioned the refund to the tune of
Rs.39,94,222/- under Section 11B of the Act, 1944 in
terms of the order dated 01.07.2021 passed by this High
Court, yet declined to grant interest in terms of Section
11BB of the Act, 1944.
8. In such circumstances, referred to above, the writ
applicant is here before this Court with the present writ
application.
9. We have heard Mr. Hardik Modh, the learned counsel
appearing for the writ applicants and Mr. Devang Vyas,
the learned Addl. Solicitor General of India assisted by Mr.
Priyank Lodha, the learned counsel appearing for the
Union of India.
C/SCA/633/2022 ORDER DATED: 16/02/2022
10. We first take notice of the order passed by this Court
dated 01.07.2021, referred to above. We may only quote
para-14 of the said order;
"14. Having considered the submissions and having
perused the material on record, we find substance in
the submissions advanced by Shri Modh, learned
counsel for the petitioner. A clear reading of
paragraph 4 to become applicable the conditions
sine quo non was the material as such or at partially
processed stage had to be moved outside the factory
and only and only then paragraph 4 and its sub-
paragraphs (a), (b) and (c) would become applicable.
Once there is no finding that the material or partially
processed goods were moved outside the factory,
there will be no applicability of paragraph 4 or its
sub-paragraphs of the notification dated 06.09.2004.
Thus, we could not see any non-fulfillment of the
condition prescribed in paragraph 4(c) of the
notification dated 06.09.2004 and the respondents
have wrongly applied paragraph 4(c) of the
notification dated 06.09.2004. Therefore, the
impugned orders are vitiated in law and cannot be
sustained. We accordingly allow both the writ
petitions and all the impugned orders are set aside
and the petitioners would be entitled for rebate
claims. Consequences to follow. We, however, leave
it open to the Department to initiate independent
proceedings, if permissible under law for recovery of
any duty regarding clearance of scrap by the
petitioners."
11. We now look into the impugned order-in-original
passed by the Asst. Commissioner, CGST, Himmatnagar
Division, Gandhinagar Commissionerate. The operative
part of the order reads thus;
C/SCA/633/2022 ORDER DATED: 16/02/2022
"ORDER
I hereby sanction refund of Rs.39,94,222/-
(Rs.28,82,163/- plus Rs.11,12,059/-) (Total Rupees
Thirty Nine Lakh Ninety Four Thousand Two Hundred
and Twenty Two Only) to M/s. Five Star Agrico P. Ltd
Near Sabar Dairy, Talod Road, PO Baria,
Himmatnagar-383006 under Section 11B of Central
Excise Act, 1944 and in pursuant to the Order dated
01.07.2021 passed by the Hon'ble High Court of
Gujarat."
12. The short point that falls for our consideration is
whether the writ applicants are entitled to interest on the
refunded amount in accordance with Section 11BB of the
Act. The question posed by us has been answered by the
Supreme Court in the case of Ranbaxy Laboratories
Ltd. vs. Union of India, reported in 2011 (273) ELT 3
(SC). We quote the same as under;
"It is manifest from the afore-extracted provisions
that Section 11BB of the Act comes into play only
after an order for refund has been made under
Section 11B of the Act. Section 11BB of the Act lays
down that in case any duty paid is found refundable
and if the duty is not refunded within a period of
three months from the date of receipt of the
application to be submitted under sub-section (1) of
Section 11B of the Act, then the applicant shall be
paid interest at such rate, as may be fixed by the
Central Government, on expiry of a period of three
months from the date of receipt of the application.
The Explanation appearing below Proviso to Section
11BB introduces a deeming fiction that where the
order for refund of duty is not made by the Assistant
Commissioner of Central Excise or Deputy
Commissioner of Central Excise but by an Appellate
C/SCA/633/2022 ORDER DATED: 16/02/2022
Authority or the Court, then for the purpose of this
Section the order made by such higher Appellate
Authority or by the Court shall be deemed to be an
order made under sub-section (2) of Section 11B of
the Act. It is clear that the Explanation has nothing to
do with the postponement of the date from which
interest becomes payable under Section 11BB of the
Act. Manifestly, interest under Section 11BB of the
Act becomes payable, if on an expiry of a period of
three months from the date of receipt of the
application for refund, the amount claimed is still not
refunded. Thus, the only interpretation of Section
11BB that can be arrived at is that interest under the
said Section becomes payable on the expiry of a
period of three months from the date of receipt of
the application under Sub-section (1) of Section 11B
of the Act and that the said Explanation does not
have any bearing or connection with the date from
which interest under Section 11BB of the Act
becomes payable."
13. The Supreme Court concluded the aforenoted
judgment holding as under;
"In view of the above analysis, our answer to the
question formulated in para (1) supra is 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 the Act
and not on the expiry of the said period from the
date on which order of refund is made.'
14. Thus, in view of the above, 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
C/SCA/633/2022 ORDER DATED: 16/02/2022
the Act.
15. In view of the aforesaid, both the writ applications
succeed and are hereby allowed. The respondent No.3 is
directed to calculate the interest keeping in mind the
charts below;
Sr. Div F. No. ARE-2 No. Date of Amount Date of
No. ARE-2 of filing claim
Rebate
claimed
(Rs.)
1. V.72/16-573/Reb/CEX/ 32/12-13 08.10.2012 133142 03.05.2013
2. V.72/16-574/Reb/CEX/ 33/12-13 25.10.2012 125733 03.05.2013
3 V.72/16-575/Reb/CEX/ 34/12-13 01.11.2012 72880 03.05.2013
4 V.72/16-576/Reb/CEX/ 35/12-13 01.11.2012 108224 03.05.2013
5. V.72/16-577/Reb/CEX/ 36/12-13 05.11.2010 182860 03.05.2013
6. V.72/16-578/Reb/CEX/ 37/12-13 09.11.2012 114045 03.05.2013
7. V.72/16-579/Reb/CEX/ 38/12-13 09.11.2012 115353 03.05.2013
8. V.72/16-580/Reb/CEX/ 39/12-13 12.11.2012 109737 03.05.2013
9. V.72/16-581/Reb/CEX/ 40/12-13 05.12.2012 139611 03.05.2013
10. V.72/16-582/Reb/CEX/ 41/12-13 14.12.2012 135014 03.05.2013
11. V.72/16-583/Reb/CEX/ 42/12-13 18.12.2012 169574 03.05.2013
12. V.72/16-584/Reb/CEX/ 43/12-13 24.12.2012 115526 03.05.2013
13. V.72/16-585/Reb/CEX/ 44/12-13 31.12.2012 182204 03.05.2013
14. V.72/16-586/Reb/CEX/ 45/12-13 07.01.2013 123184 03.05.2013
15. V.72/16-587/Reb/CEX/ 46/12-13 16.01.2013 141909 03.05.2013
16. V.72/16-588/Reb/CEX/ 47/12-13 30.01.2013 145864 03.05.2013
C/SCA/633/2022 ORDER DATED: 16/02/2022
17. V.72/16-589/Reb/CEX/ 48/12-13 11.02.2013 142371 03.05.2013
18. V.72/16-590/Reb/CEX/ 49/12-13 11.02.2013 147678 03.05.2013
19. V.72/16-591/Reb/CEX/ 50/12-13 14.02.2013 13477 03.05.2013
20. V.72/16-592/Reb/CEX/ 51/12-13 14.02.2013 9418 03.05.2013
21. V.72/16-593/Reb/CEX/ 52/12-13 14.02.203 8071 03.05.203
22. V.72/16-594/Reb/CEX/ 53/12-13 22.02.203 119375 03.05.2013
23. V.72/16-595/Reb/CEX/ 54/12-13 27.02.2013 39723 03.05.2013
24. V.72/16-596/Reb/CEX/ 55/12-13 07.03.2013 136697 03.05.2013
25. V.72/16-597/Reb/CEX/ 56/12-13 18.03.2013 150493 03.05.2013
2882163
Sr. Div F. No. ARE-2 No. Date of Amount Date of
No. ARE-2 of filing claim
Rebate
claimed
(Rs.)
1. V.82/16-683/Reb/CEX/ 04/13-14 09.05.2013 17000 28.06.2013
2. V.82/16-684/Reb/CEX/ 05/13-14 15.05.2013 147948 28.06.2013
3. V.82/16-685/Reb/CEX/ 58/12-13 29.03.2013 147536 28.06.2013
4. V.82/16-686/Reb/CEX/ 06/13-14 20.05.2013 174886 28.06.2013
5. V.82/16-687/Reb/CEX/ 03/13-14 26.04.203 151749 28.06.2013
6. V.82/16-688/Reb/CEX/ 02/13-14 17.04.2013 152419 28.06.203
7. V.82/16-689/Reb/CEX/ 01/13-14 08.04.2013 120070 28.06.203
8. V.82/16-690/Reb/CEX/ 57/12-13 23.03.2013 47451 28.06.2013
1112059
16. Let this exercise be undertaken at the earliest and
C/SCA/633/2022 ORDER DATED: 16/02/2022
completed within a period of eight weeks from the date of
the receipt of the copy of the writ of this order.
17. The connected writ application is also allowed in the
aforesaid terms.
(J. B. PARDIWALA, J)
(NISHA M. THAKORE,J)
Vahid
