Case Law Details
Goldy Engineering Works Vs Commissioner of Central Excise & Anr (Delhi High Court)
Conclusion: In present facts of the case, the Hon’ble Delhi High Court observed that Section 35FF of the Excise Act indicates that interest would commence from the date of the order of the Appellate Authority as distinct from the making of an application which is prescribed to be the starting point insofar as Section 11BB of the Act is concerned.
Facts: In present facts of the case, the common question which arises is the date from which interest is leviable on an asserted delay in disbursal of refund under the Central Excise Act, 1944. According to the petitioners, interest is liable to run from the date when the refund is determined and would not be dependent on any application or other positive step being taken by an assessee. On 27 July 2006, a Show Cause Notice is stated to have been issued to the petitioner, in respect of certain goods which had been seized. The aforesaid SCN was followed by another SCN dated 29 January 2007 in terms of which the Department raised a demand for additional duty as well as proposing penal action again against the notices for having violated the provisions of an exemption notification. The petitioner asserts that during the pendency of those proceedings, it was also forced to deposit an amount of Rs. 20,00,000. The SCNs were ultimately finalized in terms of the order in original dated 08 February 2008, which held that the petitioners were liable to pay the duty along with interest thereon in accordance with Section 11AB of the 1944 Act. Further directions were framed for confiscation of cash amounting to Rs. 44,96,000/- and the imposition of monetary penalties amounting to Rs. 45,31,574/-. The amount of Rs. 20,00,000/- which had been deposited by the petitioners during the pendency of the SCN proceedings was also appropriated against the demands which stood crystallized. Aggrieved by the aforesaid order, the petitioner preferred an appeal, which came to be allowed in toto by the Appellate Authority. The Department preferred an appeal against that decision before the CESTAT which was dismissed.
The petitioner thereafter and more particularly on 14 November 2016 filed a formal application for refund. On 23 February 2017, an order is stated to have been drawn for grant of refund to the petitioner which was never communicated to it and that despite repeated reminders, the respondents failed to apprise the petitioners of the status of its claim for refund constraining it to institute the present writ petition.
After taking submissions of both sides, into consideration, the Hon’ble High Court, at the outset noted, that Section 11B(1) in clear and unambiguous terms contemplates the making of an application for refund being made by any person claiming refund of any duty of excise and interest paid on such duty. The claim of refund insofar as the petitioner is concerned arose in the backdrop of the order in original coming to be set aside in appeal. The petitioner appears to have made an application for refund ultimately and only after the departmental appeal before the CESTAT came to be dismissed. Further, it was observed that the mere pendency of an appeal or an order of stay that may operate thereon would not detract from the obligation of any person claiming a refund making an application as contemplated under Section 11B(1) within the period prescribed and computed with reference to the “relevant date”.
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