2004 (7) TMI 100 - HC - Central Excise

Summary

Issues:
1. Failure to file a counter affidavit by the respondents.
2. Allegations of non-refund of excise duty rebate.
3. Delay in granting the refund.
4. Legal entitlement to interest on delayed refund.

Issue 1: Failure to file a counter affidavit
The judgment highlights that the respondents were granted multiple opportunities to file a counter affidavit but failed to do so. Consequently, the court decided to treat all allegations in the petition as correct due to the absence of a response from the respondents. This failure to file a counter affidavit played a crucial role in the court's decision-making process.

Issue 2: Allegations of non-refund of excise duty rebate
The petitioner, a company engaged in the manufacture and sale of picture tubes, claimed a rebate of duty on goods exported to Dhaka. Despite the revisional order allowing the revision and directing the refund, the petitioner faced non-compliance from the department. The court emphasized the petitioner's entitlement to the refund amounting to Rs. 32,84,357.86, along with interest at 12% per annum, as per the due date.

Issue 3: Delay in granting the refund
The judgment criticized the department's delay in refunding the amount to the petitioner despite the revisional order in favor of the petitioner. The court expressed dissatisfaction with the department's inaction and highlighted the petitioner's ordeal in seeking the rightful refund. The court directed the respondents to make the payment of the principal refund amount along with interest within two months from the judgment date.

Issue 4: Legal entitlement to interest on delayed refund
In discussing the legal aspect of awarding interest, the judgment cited precedents emphasizing the compensatory nature of interest in cases of delayed payments. The court underscored the importance of awarding interest to prevent unfair enrichment by the party withholding the payment. Referring to legal principles and previous judgments, the court justified the award of interest at a rate of 12% per annum on the delayed refund amount, emphasizing the equitable nature of interest payments in such situations.

By addressing these issues comprehensively, the judgment resolved the dispute, ensuring the petitioner's right to the refund along with interest and highlighting the importance of timely compliance with legal obligations in matters of excise duty rebates.