Commissioner Vs Blackberry India Pvt. Ltd. (Supreme Court of India)
The Supreme Court of India, in Commissioner Vs Blackberry India Pvt. Ltd., dismissed the Revenue’s Special Leave Petition concerning the CENVAT credit refund granted to BlackBerry India Pvt. Ltd. The Court condoned the delay in filing and refiling the petition and recorded the statement made at the Bar that the refund amount had already been released to the respondent pursuant to the High Court’s direction. In these circumstances, the Supreme Court found no reason to entertain the Special Leave Petition and dismissed it, disposing of pending applications. The Supreme Court’s order is brief and does not independently examine the merits of CENVAT credit eligibility, the legality of the recovery notice or the entitlement to interest. The detailed reasoning on the recovery dispute appears in the related Delhi High Court proceedings supplied with the Supreme Court order.
The underlying controversy arose when the Department issued a show cause notice dated 19 January 2024 proposing recovery of ₹8,55,34,345 towards CENVAT credit refund and ₹4,69,83,731 towards interest on delayed refund, aggregating to ₹13,25,18,076, together with proposed interest and penalty. BlackBerry had earlier filed refund applications in 2013 and 2014. Following departmental proceedings, an Order-in-Original dated 31 August 2020 rejected refund claims for specified periods in 2012 and 2013. The Commissioner (Appeals) dismissed BlackBerry’s appeal on 19 August 2021. However, CESTAT, by its final order dated 7 December 2022, held that the refund claim could not have been rejected.
The Revenue challenged CESTAT’s decision before the Delhi High Court in SERTA-7/2023, but its appeal was dismissed on 12 July 2023 because no substantial question of law arose. BlackBerry subsequently filed W.P.(C) No. 9364/2023 seeking interest on the delayed refund. By order dated 3 August 2023, the High Court directed the Revenue to process the interest claim under Section 11BB of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994. The interest was thereafter sanctioned and paid. Thus, the refund and interest challenged in the subsequent show cause notice had been disbursed following judicial and appellate proceedings.
The Delhi High Court examined the Department’s justification for issuing the recovery notice. The show cause notice relied upon the assertion that the Department had filed a Special Leave Petition against the High Court’s judgment dated 12 July 2023. During the High Court hearing, however, it was clarified that the Department had only processed the file for filing an SLP and that the petition had not yet been filed in the Supreme Court Registry. The High Court held that the Department could not independently characterise amounts paid pursuant to subsisting appellate and judicial orders as erroneous refunds merely because it intended to challenge those orders. Unless the Revenue succeeded before the Supreme Court or obtained an appropriate order from that Court, there was no basis for recovering the CENVAT credit refund or the interest already paid. Accordingly, the Delhi High Court quashed the show cause notice dated 19 January 2024, without awarding costs. The subsequent Supreme Court dismissal left the Revenue’s challenge unsuccessful, but the Supreme Court itself did not provide additional substantive reasoning.
Cases Discussed / Related Proceedings
- Blackberry India Pvt Ltd Vs Commissioner CGST Delhi South Commissionerate & Anr., W.P.(C) 4029/2024, decided on 18 March 2024 (Delhi High Court) — The High Court quashed the show cause notice dated 19 January 2024 proposing recovery of the CENVAT credit refund and interest already paid pursuant to subsisting appellate and judicial orders.
- Blackberry India Pvt. Ltd., W.P.(C) No. 9364/2023, order dated 3 August 2023 (Delhi High Court) — The High Court directed the Revenue to process the claim for interest on delayed refund under Section 11BB of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994.
- Revenue’s Appeal, SERTA-7/2023, decided on 12 July 2023 (Delhi High Court) — The High Court dismissed the Revenue’s appeal against the CESTAT order, holding that no substantial question of law arose.
- Blackberry India Pvt. Ltd. – CENVAT Credit Refund Appeal, final order dated 7 December 2022 (CESTAT) — The Tribunal held that BlackBerry’s refund claim could not have been rejected.
Related Judgment: The underlying CENVAT credit refund dispute was examined by the Delhi High Court, which quashed the Department’s show cause notice seeking recovery of the refund and interest paid pursuant to existing judicial and appellate orders. Read: Delhi High Court Quashes CENVAT Refund Recovery Notice Against BlackBerry India.
FULL TEXT OF THE ORDER OF THE SUPREME COURT
Delay in filing as well as in refiling is condoned.
It is stated at the bar pursuant to the direction issued by the High Court, the refund amount has been released to the respondent.
In the circumstances, we do not find any reason to entertain this Special Leave Petition.
Hence, the Special Leave Petition is dismissed.
Pending application(s), if any, shall stand disposed of.
