Case Law Details
Blackberry India Pvt Ltd Vs Commissioner CGST Delhi South Commissionerate & Anr. (Delhi High Court)
The case of Blackberry India Pvt Ltd Vs Commissioner CGST Delhi South Commissionerate & Anr. revolves around a disputed show cause notice issued to Blackberry India Pvt Ltd. The notice pertains to the recovery of CENVAT Credit and interest erroneously refunded, along with penalties imposed for ineligible availment of the credit. The primary parties involved are Blackberry India Pvt Ltd as the assessee and the revenue authority. The legal issue at hand is the validity of the show cause notice and the rightful entitlement of the assessee to the refunded amounts.
Background: In 2013 and 2014, Blackberry India Pvt Ltd filed refund applications, leading to a series of legal proceedings. A show cause notice was issued in 2020, followed by an Order-in-Original rejecting certain refund claims. Appeals were filed subsequently, culminating in a Tribunal order favoring the petitioner’s refund claim. Despite this, the revenue authority persisted, leading to further legal actions, including a writ petition before the High Court.
Contention of the Assessee: The petitioner argued for the validity of their refund claim, supported by legal precedents and interpretations. They contended that the amounts in question were rightfully refunded based on Tribunal and High Court orders. The rationale behind their contention lies in the lawful entitlement established through judicial processes.
Contention of Revenue: The revenue authority argued for the recovery of the refunded amounts, citing procedural grounds and pending appeals before the Supreme Court. They relied on legal provisions and case law to justify their position, emphasizing the possibility of interim orders from the Supreme Court and the pending nature of the legal proceedings.
Decision by Relevant Judiciary: The High Court, after considering the arguments presented, quashed the show cause notice. They ruled in favor of the petitioner, highlighting the lack of grounds for recovery given the previous judicial determinations. The court emphasized that unless the revenue authority succeeds in the Supreme Court, there is no basis for reclaiming the refunded amounts.
Conclusion: The case underscores the importance of legal clarity and adherence to judicial decisions. The decision has implications for both parties, affirming the petitioner’s entitlement to the refunded amounts. It also highlights the significance of legal proceedings in resolving disputes and calls for prudence in administrative actions. Future considerations should involve a thorough review of legal precedents and adherence to judicial pronouncements to avoid unnecessary litigations and uphold the principles of justice.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Petitioner impugns Show Cause Notice dated 19.01.2024, whereby the petitioner has been directed to show cause as to why CENVAT Credit amounting to Rs.8,55,34,345/- erroneously refunded alongwith interest amounting to Rs.4,69,83,731/- erroneously paid towards interest for delayed payment be not recovered and penalty be not imposed for ineligible availment of CENVAT Credit.
2. Issue notice. Notice is accepted by the learned counsel appearing for the respondent. With the consent of the parties, the petition is taken up for final disposal.
3. Counsel for the petitioner submits that petitioner had filed refund applications in 2013 and 2014. A Show Cause Notice was issued to the petitioner on 22.01.2020, as to why the refund be not Thereafter, an Order-in-Original dated 31.08.2020 was passed whereby the refund for the period April to June 2012, April to June, 2013 and July to September 2013 was rejected.
4. Petitioner thereafter filed an appeal before the Commissioner (Appeals), and by order dated 19.08.2021 Commissioner (Appeals) dismissed the appeal.
5. Petitioner thereafter approached the Custom Excise & Service Tax Appellate [“CESTAT”] Tribunal and by a final order dated 07.12.2022, the Tribunal held that the refund claim of the petitioner could not have been rejected by the Commissioner (Appeals).
6. Thereafter, the respondents filed an appeal before the High Court being SERTA-7/2023, which was dismissed on 12.07 .2023 holding that no substantial question of law arises. Thereafter, petitioner filed a Writ Petition before this Court being W.P. (C) No. 9364/2023 seeking grant of interest on the delayed refund. Said petition was allowed by order dated 03.08.2023, directing the Revenue to process the petitioner’s claim for interest under Section 11-BB of the Excise Act read with Section 83 of the Finance Act. Thereafter, the interest on the delayed refund was sanctioned and payment made to the petitioner.
7. It is not in dispute that pursuant to the above-referred proceedings, the amount subject matter of the impugned Show Cause Notice dated 19.01.2024 was paid to the petitioner. Petitioner was refunded an amount of Rs. 8,55,34,345/- towards refund of CENVAT Credit and Rs.4,69,83,73 1/- towards interest on delayed refund of CENVAT Credit. It is this amount which is sought to be claimed from the petitioner by the respondent and the petitioner has been directed to show cause as to why the said amount be not recovered along with interest and penalty.
8. As noticed hereinabove, said amount of refund and interest was paid to the petitioner pursuant to the order passed by the Tribunal holding the petitioner entitled to refund and the order passed by this Court directing payment of interest on the delayed refund paid to the petitioner.
9. We may also note that when the Revenue sought to impugn the order of Tribunal holding petitioner entitled for refund, this Court dismissed the challenge by the Revenue holding that the challenge was purely factual and no substantial question of law arises.
10. We may further note that the only ground stated in the impugned Show Cause Notice is extracted in paras 13 & 14 of the Show Cause Notice, which reads as under:-
“13. On the basis of above stated contention, Department has filed SLP in the Hon’ble Supreme Court against the Hon’ble High Court Judgment/Order dated 12.07.2023.
14. Whereas, it appears that since the department has preferred SLP against the Hon’ble High Court Judgment dated 12.07.2023, the amount disbursed as interest on delayed payment ammmting to Rs. 4,69,83,731/- is also liable to be recovered from the taxpayer along with interest applicable.”
11. Before us, it is stated that the Show Cause Notice erroneously records that a Special Leave Petition has been filed. We are informed that the Revenue has already processed the file for filing a Special Leave Petition. However, Special Leave Petition is still to be filed in the Registry of the Supreme Court.
12. Be that as it may, it is not in dispute that petitioner has been refunded the said amount after the petitioner was found eligible by the Tribunal for refund and further by this Court towards interest for delayed refund of the CENVAT Credit. Accordingly, there is no ground to demand the same from the petitioner.
13. Since the Revenue is approaching the Supreme Court impugning the order of the Tribunal as well as the order in appeal passed by this Court holding petitioner entitled to refund of the CENVAT Credit, it would be open to the Revenue to seek interim orders of protection from the Supreme Court. The Revenue cannot after being unsuccessful before this Court, on its own, declare the refund of the CENVAT Credit as well as interest on delayed payment to be erroneous refund. Unless the Revenue is successful before the Supreme Court or the Supreme Court so warrants, there is no question of any refund of the CENVAT Credit or refund of the interest paid to the petitioner.
14. In view of the above, the impugned Show Cause Notice cannot be sustained. The same is accordingly quashed. No order as to costs.
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