(1.) Coromandal Fertilizer Limited are the petitioners in this writ petition and seek a writ of Mandamus directing the respondents viz., the Government of India and the Customs authorities, to refund to the petitioner in cash or by a cheque an amount of Rs. 38,67,996,67.
(2.) The matter arose under the following circumstances : The petitioner carries on the business of manufacture of fertilizer including Gromor NPK. For the purpose of manufacture of Gromor NPK, the petitioner uses Muriate of Potash which suffers customs duty. Under law, admittedly, duty paid on raw material should be given credit while computing duty on finished product. In the instant case, the petitioner sought permission computing to avail set-off of proforma-credit in respect of countervailing duty paid on supplies of muriate of potash purchased and used by the petitioner in the manufacture of fertilizers, under Rule 56A of the Central Excise Rules. The Assistant Collector of Central Excise accorded necessary permission under Rule 56A of the Rules by order No. 14HH/18/364/71 dated 11/11/1971, with effect from the said date only, whereas, the petitioner sought permission from a different date viz., the date of the application made by the petitioner. This controversy was sought to be resolved by filing appeal/revision, the details of which my n to be necessary for the purpose of this case. However, ultimately, the petitioner paid the full amount on the finished product inasmuch as the petitioner was not permitted to avail the benefit of proforma-credit. Thereafter, the petitioner applied for refund of the excise duty paid on the manufacture of the fertilizers during the period 1971 to 1976, on 15- 12-1984. The respondent issued a show cause notice seating as to why the application for refund should not be rejected. The petitioner submitted a detailed reply to the show cause notice on 23-9-1985 pointing out that the petitioner had fulfilled all the relevant conditions for availing proforma-credit as per Rule 56A of the Rules. On a consideration of the reply, the Assistant Collector had held that the petitioner had satisfied all the conditions stipulated and was entitled t refund of the amount claimed in R. G. 23, Part-II Account. However, the claim of the petitioner for refund in cash or by cheque was rejected by the Assistant Collector relying upon the provisions of Rule 56A (3)(vi)(d) of the Rules i.e., no credit shall be refunded in cash or by cheque, and directed the petitioner to take credit in R. G. 23,Part-II account. This order was challenged by the petitioner before the Collector. The Collector remanded the matter to the Assistant Collector. Questioning the remand order, the petitioner filed an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as "the Tribunal"). The Tribunal, following a decision of the Bombay High Court, allowed the petitioners appeal. In this case viz. Deccan Sales Corporation v. R. Parthasarathy - 1982 (10) E. L. T. 885 the Bombay High Court observed :-
(3.) From the above facts, it can be seen that the order of the Tribunal is clear in so far as the refund is concerned, and the respondents are under legal obligation to refund the amount as claimed by the petitioner.