KIRLOSKAR BROTHERS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) PETITIONER, a limited company, has filed this writ under Articles 226 and 227 of Constitution of India, claiming following relief by way of issuance of writ of mandamus against the respondents:

(2.) IN substance, the petition is for claiming interest on delayed payment of excise duty refunded by the respondents to petitioner. This relief is founded on the allegation that the petitioner - a limited company, is engaged in the business of manufacturing of monoblock pumps. According to petitioner, they filed a classification list in respect of monoblock pumps and claimed that due to their peculiar manufacturing, they are not exigible to any excise duty. In other words, the case of petitioner was that the rate of duty leviable on these pumps was nil in terms of one exemption notification No. 57/78, dated 1-3-1978. The excise authorities did not accept the stand taken by the petitioner and insisted for payment of excise duty. It is the case of petitioner that due to insistence on the part of excise authorities, the petitioner had to pay excise duty under protest. The petitioner then contested the issue before the departmental authorities and contended interalia that they are not liable to pay any excise duty on these pumps in terms of the aforementioned exemption notification. This issue was eventually decided in favour of petitioner at the appellate stage. As a consequence of a declaration granted in favour of petitioner in appeal and it having attained the finality, that no duty is payable on these monoblock pumps, the petitioner became entitled to claim refund of the excise duty which was paid by them under protest. Eventually, after some correspondence, the department refunded a sum of Rs. 1,28,27,885/- in two instalments i. e. one on 29-11-1986 and other on 17-10-1988 to the petitioner. It is on this amount the petitioner claimed interest from the respondents interalia on the ground that due to wrong withholding of the amount for a long period, the petitioner has become entitled to claim interest not only on the ground of equity but also under the general law. Since the respondents (Excise Department) did not acceed to the prayer made by the petitioner, the present petition was filed by the petitioner seeking a writ of mandamus, directing the respondents to pay a sum of Rs. 1,37,77,570/- by way of interest which was calculated at the rate of 18% per annum on the amount which was refunded but late.

(3.) HEARD Shri J. P. Gupta, learned senior counsel with Shri Abhyankar, learned counsel for petitioner, and Shri B. G. Neema, learned counsel for respondents.