High Court · 2012

2. Question for consideration in both the writ petitions is the ent itlement of the petitioners to interest under section 11BB of the Central Excise Act, 1944 on the delayed excise duty refund by the department to the petitioner s.

3. The relevant facts of the two cases may be briefly noted. W.P.(C) No.1166/2012 4. Petitioner is a company incorporated under the Companies Act, 19 56, owning amongst others the Chabua Tea Estate in the district of Dibrugarh, As sam. Petitioner is engaged in the business of cultivation and manufacture of tea and tea waste, which are exigible to excise duty under Chapter-9 of the Schedul e to the Central Excise Tariff Act, 1985, having central excise registration num ber. The Central Government formulated new industrial policy in the y 5. ear 1997 giving various incentives to stimulate industrial development in the No rth Eastern Region. Such incentives included exemption from payment of excise du ty for a period of 10 years from commencement of production.

6. Pursuant thereto, Department of Revenue, Ministry of Finance, Go vernment of India issued Notification No.33/99-CE dated 08-07-1999 giving conces sions in excise duties. The said notification was issued in exercise of the powe rs conferred by Sub-section (1) of Section 5A of the Central Excise Act, 1944 re adwith Section 3(3) of the Additional Duties of Excise (Goods of Special Importa nce) Act, 1957 and Section 3(3) of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978. By the said notification, the goods specified in th e schedule and cleared from a unit located in any one of the States in the North Eastern Region, including in the State of Assam, were exempted from excise duty leviable thereon.

7. Petitioner filed a claim on 18-10-2004 before the Assistant Comm issioner of Central Excise, Dibrugarh for refund of excise duty paid for the per iod from 08-07-1999 to 28-02-2003 amounting to Rs.1,10,61,418/-. The claim was m ade in terms of the aforesaid notification dated 08-07-1999, as amended. The Assistant Commissioner of Central Excise, Dibrugarh (respond 8. ent No.4) vide order dated 10-05-2005 held that the petitioner was eligible for exemption under notification dated 08-07-1999. Thereafter, respondent No.4 vide order dated 05-08-2005 sanctioned refund of Rs.77,52,409/- in favour of the peti tioner out of the claimed amount of Rs.1,10,61,418/-. Respondent No.4 stated tha t the refund claim for the months of August, 1999, September, 1999, May, 2000, S eptember, 2000, November, 2001 and December, 2001 involved amounts of over Rs.5 lakhs, which required audit clearance. Thus, an amount of Rs.33,09,009/- (Rs.1,1 0,61,418/- - Rs.77,52,409/-) was kept pending. 9. tioner. The sanctioned amount of Rs.77,52,409/- was refunded to the peti

10. Commissioner of Central Excise, Dibrugarh (respondent No.3) pref erred appeal against aforesaid order dated 05-08-2005. The appellate authority i .e. Commissioner (Appeals), by order dated 31-01-2006 rejected the appeal and up held the order dated 05-08-2005.

11. Revenue thereafter preferred appeal before the Customs, Excise a nd Service Tax Appellate Tribunal, Kolkata (CESTAT). However, CESTAT by order da ted 21-06-2011 dismissed the appeal filed by the Revenue.

12. Against order of CESTAT, Revenue filed further appeal before thi s Court, which was registered as C.Ex.Appeal No.5/2011. This Court by order date d 19-12-2011 dismissed the appeal holding that no substantial question of law ar ose in the appeal.

13. Inspite of such orders of the appellate authorities rejecting th e appeals filed by the Revenue, the balance amount of Rs.33,09,009/- was not ref unded to the petitioner. Petitioner, therefore, filed the related writ petition seeking a direction to the respondents to refund the aforesaid amount to the pet itioner alongwith applicable interest. W.P.(C) No.2325/2012 14. Petitioner No.1 is a partnership firm with petitioner No.2 as on e of the partners, engaged in the business of manufacture and sale of made tea, which is an excisable good under Chapter 9 of the Schedule to the Central Excise Tariff Act, 1985.

15. Under the notification dated 08-07-1999, the goods manufactured by the petitioner No.1, on which excise duty was levied, were exempted from paym ent of excise duty.

16. The Assistant Commissioner, Central Excise, Nagaon by order date d 04-08-2003 held that the petitioner was eligible for exemption under the notif ication dated 08-07-1999 from 28-03-1998. Petitioners thereafter submitted appli cation dated 22-04-2004 for refund of excise duty amounting to Rs.10,44,628/- re alized from the petitioner No.1. The Assistant Commissioner, Nagaon by order dated 16-06-2004 san 17. ctioned an amount of Rs.10,44,628/- as excise duty refund to be repaid to the pe titioner No.1 for the period from 01-01-2001 to 14-07-2002. The said authority a lso passed order to appropriate an amount of Rs.9,88,010/- from the aforesaid sa nctioned amount as interest u/s 11AB of the Central Excise Act, 1944. Accordingl y, refund of Rs.56,618/- was ordered for payment to petitioner No.1.

18. Petitioners filed W.P.(C) No.7251/2004 before this Court questio ning the aforesaid action of the authority on levying interest on the excise dut y refund and appropriating major chunk of the excise duty refund. A Single Bench of this Court by the Judgment and Order dated 22-04-2010 declared such appropri ation to be unauthorized in law and directed the Revenue to refund the appropria ted interest amount to the assessee forthwith.

19. Thereafter, the Assistant Commissioner by order dated 08-10-2010 sanctioned refund of Rs.10,44,628/- to petitioner No.1.

20. Petitioners vide letter dated 31-01-2011 requested the Assistant Commissioner to pay interest for the delay in making the refund. As there was n o response, petitioners submitted reminders and further representations. Ultimat ely, the Assistant Commissioner, Central Excise, Nagaon by order dated 23-11-201 1 rejected the demand for payment of interest on the ground that in case of refu nd under notification dated 08-07-1999, section 11B of the Central Excise Act, 1 944 is not applicable and consequently, interest under section 11BB of the said Act would not be payable.

21. Aggrieved, the petitioners have preferred the related writ petit ion challenging the legality and validity of the aforesaid order dated 23-11-201 1 and seeking a direction to the respondents to pay interest on the delayed refu nd. Respondents have filed counter affidavit in W.P.(C) No.1166/2012 22. . In the said counter, it is stated that refund claim of Rs.33,09,009/- was take n up for expeditious disposal. Ultimately, by order dated 27-03-2012 passed by t he Assistant Commissioner, Dibrugarh, an amount of Rs.32,05,103/- was sanctioned for refund to petitioner. The said amount was paid to the petitioner vide chequ e dated 27-03-2012. On the clam of interest, the respondents stated that nature of refund envisaged in the notification dated 08-07-1999 is qualitatively differ ent from refund under section 11B of the Central Excise Act, 1944 as it was not on account of any excess payment of excise duty by the manufacturers but was des igned to give effect to exemption. Consequently, it is contended that provision of Section 11B of the Central Excise Act, 1944 would not be applicable in such c ases. We have heard Mrs. M. Hazarika, learned Senior Counsel and Ms. S 23. .Kejriwal, learned Counsel for the petitioners. We have also heard Mr. R.Dubey, learned Standing Counsel, Central Excise for the respondents.

24. As the issue involved in both the cases is the same, as has been noticed at the very outset, both the cases were heard together and are being di sposed of by this common judgment. Before we proceed further, relevant portion of the notification 25. dated 08-07-1999 may be looked into. As has already been noticed earlier, the sa id notification has been issued amongst others in exercise of the powers conferr ed by sub-section (1) of section 5A of the Central Excise Act, 1944. The exempti on provided by the said notification is given effect to in the following manner- (i) the manufacturer shall submit a statement of the duty paid to the jurisd ictional central excise authority by the 7th day of the next month in which the duty has been paid, (ii) the jurisdictional central excise authority, after verification, shall r efund the amount of duty paid during the month under consideration to the manufa cturer by the 15th day of the next month, (iii) if there is likely to be any delay in the verification, the jurisdiction al central excise authority shall refund the amount on provisional basis by the 15th day of the next month to the month under consideration and, thereafter, may adjust the amount of refund by such amount as may be necessary in the subsequen t refunds.

26. Thus, it is quite clear the once it is held that a manufacturer is entitled to exemption of excise duty in terms of the notification dated 08-07 -1999, the excise duty paid shall be refunded to the manufacturer as per the sch edule mentioned in the said notification. Even in case of likely delay, refund h as to be made on provisional basis. Therefore, there cannot be any manner of dou bt that the admissible excise duty refund cannot be withheld by the central exci se authority.

27. Section 11B of the Central Excise Act, 1944 deals with claim for refund of duty. It provides that any person claiming refund of any duty of exci se may make an application with relevant documents and evidence for refund of su ch duty to the Assistant Commissioner of Central Excise before the expiry of six months from the relevant date. Under sub-section (2) of section 11B, if on rece ipt of any such application, the Assistant Commissioner is satisfied that the wh ole or any part of the duty of excise paid by the applicant is refundable, he ma y make an order accordingly.

28. Under section 11BB of the Central Excise Act, 1944, if any duty ordered to be refunded under sub-section (2) of section 11B to any applicant is not refunded within three months from the date of receipt of application under s ub-section (1) of that section, there shall be paid to that applicant interest a t such rate which may be fixed by the Central Board of Excise and Customs on suc h duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty.

29. From a conjoint reading of sections 11B and 11BB of the Central Excise Act, 1944, it is apparent that if any refund of excise duty is ordered un der section 11B(2), the same has to be refunded within three months from the dat e of receipt of application under sub section (1) of that section, failing which interest will have to be paid. Language of section 11B is very clear and unambi guous. It speaks of claiming refund of any (emphasis ours) duty of excise. No ex ception is provided. It does not distinguish or differentiate between any kind of excise duty refund, whether duty paid in excess or duty paid which are exempt ed. As pointed out by the Hon’ble Supreme Court in the case of Ranbaxy Laborator ies Ltd. -Vs- Union of India reported in (2011) 10 SCC 292, it is a well-settled proposition of law that a fiscal legislation has to be construed strictly and o ne has to look merely at what is said in the relevant provision; there is nothin g to be read in; nothing to be implied and there is no room for any intendment. In the case of Ranbaxy Laboratories Limited (supra), Hon’ble Sup 30. reme Court while examining the aforesaid two provisions, referred to a circular dated 01-10-2002 issued by the Central Board of Excise and Customs, New Delhi wh erein and whereby the Board stressed that the provisions of section 11BB of the Central Excise Act, 1944 are attracted automatically for any refund (emphasis ou rs) sanctioned beyond a period of three months. Hon’ble Supreme Court has held that liability of the Revenue to pay interest under section 11BB commences from the date of expiry of three months from the date of receipt of application for r efund under section 11B(1) and not on the expiry of the said period from the dat e on which the order of refund is made.

31. We also find that a Single Bench of this Court in (2004) 171 ELT 458 (Hindustan Coca-Cola Beverages Pvt. Ltd. -Vs- Union of India) while directi ng refund of excise duty paid in terms of notification dated 08-07-1999, had als o directed payment of interest for delayed payment as per provision of section 1 1 of the Central Excise Act, 1944. Thus, in view of the discussions made above, we are of the unhes 32. itant view that section 11B of the Central Excise Act, 1944 does not exclude cla im of refund made in terms of the notification dated 08-07-1999. Petitioners wou ld, therefore, be entitled to interest under section 11BB of the Central Excise Act, 1944 on the excise duty refunded to them. The jurisdictional excise office rs shall now determine the interest amount payable to the petitioners for the re levant periods. The amounts found due shall be paid to the petitioners within th ree months from today.

33. rcumstances of the cases, there will be no order as to cost. Writ petitions are allowed. However, looking to the facts and ci