Rayban Sun Optics INDIA PVT. LTD. vs. The Commissioner Of Central Excise And GST Jaipur I

Held

The Court held that the writ petition is maintainable. Despite the availability of an alternative remedy, the Court found that relegating the petitioner to further statutory appeals would add to the hardship already suffered over two decades of litigation. The Court noted that the petitioner's contention regarding the refund claim filed on February 19, 2018, was finally upheld by the CESTAT in its order dated June 29, 2021, which had attained finality as it was not assailed by the respondent-department. The subsequent rejection of the refund claim on the ground that a new claim was filed on October 6, 2022, after the expiry of one year from the CESTAT's order was deemed wholly perverse, especially since the objection of limitation had already been rejected. The Court found that the respondent-department was harassing the petitioner on the same ground already adjudicated. The Court held that the respondent-department is under a statutory obligation to refund the amount with interest. The order dated January 4, 2023, rejecting the refund claim was quashed and set aside. The Court directed the respondents to pay the refund amount of Rs. 16,89,669/- along with interest at 12% per annum, calculated from February 19, 2018, until the date of payment, within six weeks.

Facts

The petitioner, M/s Rayban Sun Optics India Pvt. Ltd., sought a refund of Rs. 16,89,669/- along with interest and compensation for delayed refund. The dispute originated from a show cause notice dated May 18, 2004, concerning CENVAT credit on written-off inputs for the financial year 2000-2001, which led to an Order-in-Original on October 21, 2004. After appeals to the Commissioner (Appeals) and the CESTAT, the CESTAT set aside the demand on March 31, 2012. The department's appeal to the High Court was dismissed on April 21, 2017, due to monetary limits. Consequently, the petitioner filed a refund claim on February 19, 2018. This claim was rejected as time-barred under Section 11B of the Central Excise Act, 1944, by the Assistant Commissioner on October 11, 2018. Further appeals to the Commissioner (Appeals) and the CESTAT followed, with the CESTAT allowing the petitioner's appeal on June 29, 2021, holding the refund claim filed on February 19, 2018, to be within time. However, a subsequent refund request on October 6, 2022, was again rejected as time-barred.

Key Issues

1. Whether the writ petition is maintainable despite the availability of an alternative remedy of appeal before the Commissioner (Appeals) under Section 35 of the Act? Petitioner's arguments: The petitioner contended that the writ petition is maintainable due to the prolonged litigation spanning over two decades and the fact that the issue of limitation has already been decided in their favour by the CESTAT. They argued that the rejection of the refund claim on the premise of being time-barred, despite the CESTAT's order dated June 29, 2021, which held the claim filed on February 19, 2018, as not time-barred, is perverse and legally infirm. They relied on the CESTAT's final order dated June 29, 2021, which attained finality as the department did not challenge it. Respondents' arguments: The respondents raised a preliminary objection regarding the maintainability of the writ petition, asserting that the petitioner has an alternative remedy of appeal before the Commissioner (Appeals). They further argued that the refund claim filed on October 6, 2022, was not within one year of the CESTAT's order dated June 29, 2021, and thus rightly rejected as time-barred under Section 11B of the Act.