SWADESHI POLYTEX LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE moot question in this writ petition is the date from which the Revenue is liable to pay interest on delayed refund of excise duty; is it from expiry of three months from the date of application for refund under Section 11B (1) or the receiving of assent of the President to the Finance Bill, 1995 in cases covered by proviso to section 11BB or from expiry of three months from the date of actual order of refund under section 11B (2) of the Central Excise Act, 1944 (for short 'the Act').

(2.) THE facts of the case as are relevant for determining the aforesaid question are that the petitioner-company became entitled for refund of a sum of Rs. 10,69,322.95/- as a result of its appeal being allowed by the Collector(Appeals) CEC, Ghaziabad by the order dated 3.5.1991, setting aside the adjudication order whereunder the amount in question was realised by making deductions from production incentive and MEG set off due to the petitioner. Application for refund was filed on 5.8.1991. It remained pending because of lackadaisical attitude of the authorities in spite of repeated reminders. It appears that the petitioner approached this Court by way of WP Tax No. 522 of 2009 raising grievance that its application for refund is not being decided and the writ petition was disposed of by order dated 25.2.2009 directing the Revenue to decide the claim of the petitioner for refund within three months from the date of production of a certified copy of the order. Consequent to the said direction, the Dy. Commissioner,CE, Div.,Gzd. passed an order dated 20.8.2009 rejecting the application for refund dated 5.8.1991. The aforesaid order was subjected to challenge in appeal by the petitioner. The Commissioner (Appeals), CCE,Ghaziabad allowed the appeal, by order dt.14.12.2009, with the following observation:

(3.) IN rebuttal, it has been submitted that the orders dated 7.6.2010 and 5.8.2010 are only administrative orders sanctioning the refund pursuant to the order dated 14.12.2009 passed by the Commissioner (Appeals) under section 11B (2) of the Act, and without any fetter for payment of interest and and therefore it is not possible for the petitioner to file an appeal against a non-existent order. It has been further stated in the rejoinder affidavit that in any case, since there is already an order for refund under section 11B(2) of the Act and which has attained finality and consequently there can be no justification on part of the authorities in declining to grant interest to the petitioner in spite of it being a statutory liability since after insertion of section 11BB by Finance Act 1995.