Pan Parag INDIA 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 education cess, including secondary and higher education cess, which was refunded belatedly. The Court relied on the Division Bench judgment in Amalgamated Plantations (P) Ltd. Vs. Union of India, which clearly stated that Section 11B of the Central Excise Act, 1944, does not exclude refund claims made under the notification dated 08.07.1999. Consequently, 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 until the date of refund. The Court directed Respondent No. 2 to determine the interest amount payable to the petitioner for the relevant period and release the same within three months from the date of the order.

Facts

The petitioner, Pan Parag India Ltd., filed a writ petition seeking a direction for the Assistant Commissioner, Central Tax, Jorhat (Respondent No. 2) to pay interest on the delayed refund of education cess, including secondary and higher education cess. The petitioner, an industrial unit in Assam, was entitled to excise duty exemption under a Central Government Notification dated 08.07.1999. For the period July 2004 to April 2017, education cess was levied and realized along with excise duty. Following a CESTAT decision, the petitioner was refunded the education cess on 12.11.2018. The present petition concerns the claim for interest on this delayed refund.

Key Issues

1. Whether the petitioner is entitled to interest on the delayed refund of education cess, including secondary and higher education cess, under Section 11BB of the Central Excise Act, 1944? The petitioner argued that the issue is covered by a Division Bench judgment of this Court 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 under the notification dated 08.07.1999, and therefore, interest under Section 11BB is payable. The petitioner further contended that even if the revenue's submission regarding the dismissal of an SLP on limitation is accepted, the Division Bench judgment still holds the field for this High Court. The respondent (Revenue) submitted that an SLP filed against the Amalgamated Plantations (P) Ltd. decision was dismissed on the ground of limitation, implying the question is still open.