Cachar Native Joint Stock Company LTD. vs. Union Of INDIA And Anr.

Held

The Court held that the petitioner is entitled to interest under Section 11BB of the Central Excise Act, 1944, on the excise duty refunded to it belatedly. The Court relied on the Division Bench judgment in Amalgamated Plantations (P) Ltd. Vs. Union of India, which held that Section 11B of the Central Excise Act, 1944, does not exclude claims for refund made in terms of notifications like the one applicable to the petitioner. The Court reiterated that the language of Section 11B is clear and unambiguous, and it speaks of claiming refund of any duty of excise without exception. The liability to pay interest under Section 11BB commences from the date immediately after the expiry of three months from the receipt of the refund application, not from the date of the refund order. The Assistant Commissioner was directed to determine the interest amount payable to the petitioner for the relevant periods and release the same within three months from the date of the order.

Facts

The petitioner, Cachar Native Joint Stock Company Ltd., owner of Vernerpur Tea Estate, sought a direction from the Assistant Commissioner, GST and Central Excise, to pay interest on the delayed refund of education cess, secondary and higher education cess. The petitioner was initially levied excise duty for the period July 1999 to February 2003, despite claiming exemption. This was upheld by CESTAT, Kolkata, but a Central Excise Appeal before the Gauhati High Court was allowed on February 20, 2018, setting aside the lower authorities' orders. The petitioner then filed this writ petition for interest on the delayed refund.

Key Issues

1. Whether the petitioner is entitled to interest under Section 11BB of the Central Excise Act, 1944, on the delayed refund of excise duty, including education cess and secondary and higher education cess, when the refund was ordered after the period prescribed in Section 11B of the Act? Petitioner's Argument: The petitioner contended that the issue is squarely covered by a Division Bench judgment of the Gauhati High Court in Amalgamated Plantations (P) Ltd. Vs. Union of India, 2013(2) GLR 732. They argued that Section 11B and 11BB of the Central Excise Act, 1944, mandate payment of interest on delayed refunds, and this provision is automatically attracted for any refund sanctioned beyond three months, as held in the Amalgamated Plantations case and supported by a Supreme Court decision in Ranbaxy Laboratories Ltd. Vs. Union of India. Revenue's Argument: The revenue, through its Standing Counsel, submitted that while an SLP against the Amalgamated Plantations decision was dismissed by the Supreme Court on grounds of limitation, the question of law was still open. However, they did not present a substantive argument against the entitlement to interest based on the cited precedent.