SWARAJ MAZDA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition, the petitioner challenges the order passed by the Joint Secretary (RA) to Government of India, rejecting the revision application filed by the petitioner herein. The facts which are relevant and material for deciding this petition are that the petitioner is a company incorporated under the Companies Act and is engaged in manufacture of motor vehicles. The vehicles are subject to duty of excise. According to the petitioner, it used to send the duty paid chassis fitted with engines manufactured by it to independent body builders for fabricating body on those vehicles. The activity of building body on the duty paid chassis amounts to manufacture. Hence, the duty is again paid on the body built vehicles when the vehicles fitted with the body are cleared from the premises of the body builders. Thus, when the vehicles are cleared from the premises of the body builders, the vehicles suffer duty at two stages viz. At the stage of chassis and at the stage of fitting the body. According to the petitioner, the petitioner had cleared the body built vehicles on payment of appropriate excise duty for home consumption as well as for export under claim of rebate. The export of the body built vehicles under the claim of rebate was effected from the factories of the body builders and not from the factory of the petitioner. According to the petitioner, it filed 47 claims of rebate/refund against the exports made during the period from July, 1994 to January, 1997. The total amount claimed as refund was Rs. 1,17,42,752/-. In respect of 29 out 47 refund claims, the department issued show cause notices to the petitioner proposing to reject the refund claims. The reason stated in the show cause notices for rejection of refund claims was that the petitioner had not exported fully built motor vehicles directly from their factory and that the petitioner has manufactured only the chassis of motor vehicles and not complete motor vehicles in their factory. The Assistant Commissioner of Central Excise adjudicated the show cause notices by his order dated 11-3-1996 and rejected the claims for refund on two grounds. An appeal was filed by the petitioner against that order. The order was set aside and the matter was remanded back for de novo adjudication in the light of the circular issued by CBEC dated 30-1-1997. In the circular it was clarified that where the exporter submits proof that the goods have actually been exported, the condition of export being made directly from the factory/warehouse of the manufacturer is deemed to have been waived. On remand the matter was again heard by the Assistant Commissioner who again by his order dated 10-7-1998 rejected the claims for refund. Feeling aggrieved by that order, the petitioner again filed appeal before the Commissioner (Appeals). That appeal was allowed by order dated 30-7-1999. The appellate authority again remanded the matter back to the Deputy Commissioner of Central Excise directing him to verify the documents and reconsider the claim. On remand again the proceedings were taken up by the Deputy Commissioner of Central Excise, who heard the petitioner and by order dated 19-11-1999 sanctioned the refund against all the 29 claims. The amount to be refunded was Rs. 82,74,070/-. So far as the remaining 18 refund claims of the petitioner are concerned, it appears that because the proceedings in relation to 29 claims were going on, those claims were kept pending and no orders were passed on those claims. But sifter the refund was ordered against 29 claims by order dated 19-11-1999, various orders were passed from 26-12-2001 to 29-3-2003 sanctioning refund against those 18 claims also i.e. Rs. 34,68,682/-.

(2.) Thereafter, the petitioner wrote letters to the authorities claiming interest under the provisions of Section 11BB of the Central Excise Act. There was no response to those letters for a long time, but ultimately by letter dated 1-1- 2 004 the petitioner was informed that the petitioner is not entitled to payment of any interest on the refund claim under Section 11BB of the Act. Against that letter, an appeal was filed before the Commissioner, Central Excise (Appeals). That appeal was rejected by order dated 20-12-2005, and therefore, a revision was filed before the Joint Secretary, Government of India, Ministry of Finance, Department of Revenue. That revision has been rejected by the order which is impugned in this petition. The Joint Secretary has held that the applications for refunds initially filed by the petitioner were incomplete and that those applications got completed only after the order was passed in the appeal dated 30-7-1999, and that payment of refund has been made within three months thereof, and therefore, no interest is payable to the petitioner.

(3.) The learned Counsel appearing for the petitioner submits that the applications for refund under Section 11B of the Act is required to be made in the prescribed form. The petitioner had made such applications in the prescribed form. Admittedly on that application, an order for refund has been made. The learned Counsel submits that in the order passed by the Commissioner (Appeals) dated 30-7-1999 or in the order of the Deputy Commissioner who passed the final order after remand, sanctioning refund, there is no finding that the applications of the petitioner filed for refund were incomplete. The learned Counsel submits that the applications filed by the petitioner furnished all the details required to be given by the Rules and it had also submitted all the documents which are required to be filed with the applications, and therefore, according to the learned Counsel, the petitioner was entitled to interest in terms of the provisions of Section 11BB of the Act.