(A.M. Khanwilkar and Dinesh Maheshwari, JJ.)
Manisha Pharmo Plast Pvt. Ltd. through its Managing Director and Another ________________________________________ Appellant(s);
v.
Union of India Through the Secretary and Others _____ Respondent(s).
Civil Appeal No. 4432 of 2009, decided on August 6, 2020
The Order of the court was delivered by
Order
1. Heard learned counsel for the parties.
2. The High Court, vide impugned judgment, has denied relief of statutory interest payable to the appellant under Section 11BB of the Central Excise Act, 1944 read with the circular No. 670/61/2002-CX.8 dated 1-10-2002 issued by the Government of India, Ministry of Finance (Department of Revenue), Central Board of Excise & Customs, New Delhi. The High Court noted that the appellant had filed application for refund on 30.12.1999 but denied the relief of interest on the finding that the adjudication of the claim attained finality only after dismissal of the proceedings before the High Court on 18.07.2005; whereas the Department had already paid refund amount to the appellant on 26.06.2005. These facts are not in dispute.
3. In light of these facts and the exposition in paragraph 17 in Ranbaxy Laboratories Ltd. v. Union of India [(2011) 10 SCC 292], it was not open to the Department to deny the relief of statutory interest. Paragraph 17 of the said decision reads thus:—
“17. We, thus find substance in the contention of learned counsel for the assessee that in fact the issue stands concluded by the decision of this Court in U.P. Twiga Fiber Glass Ltd. (supra). In the said case, while dismissing the special leave petition filed by the revenue and putting its seal of approval on the decision of the Allahabad High Court, this Court had observed as under:
“Heard both the parties.
In our view the law laid down by the Rajasthan High Court succinctly in the case of J.K. Cement Works v. Assistant Commissioner of Central Excise & Customs reported in 2004 (170) E.L.T. 4 vide Para 33:
“A close reading of Section 11BB, which now governs the question relating to payment of interest on belated payment of interest, makes it clear that relevant date for the purpose of determining the liability to pay interest is not the determination under sub-section (2) of Section 11B to refund the amount to the applicant and not to be transferred to the Consumer Welfare Fund but the relevant date is to be determined with reference to date of application laying claim to refund. The non-payment of refund to the applicant claimant within three months from the date of such application or in the case governed by proviso to Section 11BB, non-payment within three months from the date of the commencement of Section 11BB brings in the starting point of liability to pay interest, notwithstanding the date on which decision has been rendered by the competent authority as to whether the amount is to be transferred to Welfare Fund or to be paid to the applicant needs no interference.”
(emphasis supplied)
The special leave petition is dismissed. No costs.”
4. The approval of the dictum of the Rajasthan High Court in paragraph 17 referred to above, directly deals with the claim of the appellant before this Court who had made application for refund on 30.12.1999 and, therefore, the statutory interest ought to commence after non-payment within three months from the date of application, being the starting point envisaged by Section 11BB of the Act. We find no reason to deviate from the view so taken in Ranbaxy Laboratories Ltd. (supra).
5. Hence, this appeal should succeed. The claim of the appellant regarding statutory interest under Section 11BB of the Act is allowed in the above terms. The amount be calculated and paid expeditiously and not later than three months from today. The impugned judgment of the High Court in this regard is set aside. Appeal is allowed in the aforementioned terms. There shall be no order as to costs.
Civil Appeal No(s). 4432/2009
Manisha Pharmo Plast Pvt. Ltd. Through Its Managing Director & Anr ________________________________________________ Appellant(s)
v.
Union of India Through the Secretary & Ors ___________ Respondent(s)
(IA No. 1/2009 – PERMISSION TO FILE ANNEXURES)
Date : 06-08-2020 These matters were called on for hearing today.
(Before A.M. Khanwilkar and Dinesh Maheshwari, JJ.)
For Appellant(s) Ms. Ramni Taneja, Adv.
Mr. Anil Shrivastav, AOR
For Respondent(s) Mrs. Anil Katiyar, AOR
Mr. Vikramjeet Banerjee, ASG
Mr. Arijit Prasad, Sr. Adv.
Mrs. Shirin Khajuria, Adv.
Ms. Seema Bengani, Adv.
Mr. B. Krishna Prasad, AOR
UPON hearing the counsel the Court made the following
ORDER
6. The appeal is allowed in terms of the signed order.
7. Pending application(s), if any, is/are disposed of accordingly.
———
