TMI Blog2008 (9) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... , if not paid, the concerned Officer shall be personally liable to pay the interest so charged for the period exceeding 30 days as indicated above. - Special Civil Application No. 26937 of 2006 - - - Dated:- 26-9-2008 - K.A. Puj and Rajesh H. Shukla, JJ. Shri Mihir Joshi, Sr. Advocate, with Hasit Dilip Dave, for the Petitioner. Shri Harin P. Raval, ASG, for the Respondent. JUDGMENT The petitioner Indian Oil Corporation Limited has filed this petition under Article 226 of the Constitution of India praying for an order or direction holding and declaring that the action of the respondents of denying the refund of duty paid by the petitioner under the order-in-original dated 30-11-1995 is unreasonable, unconstitutional, inequitable, illegal and void. The petitioner has also prayed for the order or direction quashing and setting aside the order dated 7-11-2005 [2006 (198) E.L.T. 452 (Tri.-Del.)] passed by the Customs, Excise Service Tax Appellate Tribunal (CESTAT). The petitioner has further prayed for the direction directing the respondents to refund the amount of Rs. 1,11,93,757/- along with interest to the petitioner forthwith. 2. This Court has issued notice fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner to pay duty under Rule 156B which was duly paid by the petitioner. 4. Subsequently, on receiving rewarehousing certificates, the petitioner filed a refund application on 6-11-1996 under Rule 156-B along with necessary documents. Out of abundant caution, the petitioner also filed an appeal against the order dated 30-11-1995 before the CEGAT and CEGAT vide its order dated 5-6-1997 dismissed the said appeal for want of clearance from the Government of India, Committee of disputes in pursuing the appeal, following the decision of the Hon ble Supreme Court in the case of Oil Natural Gas Commission v. Collector of Central Excise, 1992 (61) E.L.T. 3 (S.C.). 5. Pursuant to the refund application filed by the petitioner, the respondent No. 5 i.e. Assistant Commissioner of Central Excise Customs, issued a show-cause notice on 13-1-1997 proposing rejection of the refund claim on the ground that some AR-3A forms were not as required and that the petitioner had not proved that the duty had not been recovered from buyers. The petitioner submitted its reply stating, inter alia, that the documents indicated procurement by the consignees and produced invoices showing that dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hasit D. Dave for the petitioner has submitted that the impugned order dated 7-11-2005 passed by CESTAT overlooks the fact that the order-in-original dated 30-11-1995 was, in sum and substance, an order directing recovery of duty under Rule 156B since the petitioner had not been able to produce the rewarehousing certificates within the prescribed time limit and the Tribunal has failed to appreciate the fact that the show-cause notices were issued for non-production of rewarehousing certificates under Rule 156B and while confirming the show-cause notices, the Commissioner had merely mentioned another provision in the order which by itself could not be said to be a recovery/order under that provision. He has, therefore, submitted that the impugned order of the Tribunal is completely unreasonable, unconstitutional, irrational and illegal. He has further submitted that the Tribunal has failed to appreciate the fact that the petitioner could not have challenged the order dated 30-11-1995 since the demand was under Rule 156B for failure to produce rewarehousing certificates within time and was entitled, under the provisions of Rule 156B, to apply for refund on presentation of the triplic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the following findings :- Notification No. 75/84-C.E., dated 1-3-1984 had provided the concessional rate, subject to the condition that where use to petroleum product specified in the said notification is elsewhere than the factory of the production, the procedure set out in Chapter X of Central Excise Rules, 1944 is required to be followed. To be eligible to claim concessional rate of duty, the petitioner had produced CT.2 certificate in respect of the consignee, showing that consignee held entitlement for procuring the product at concessional rate of duty for intended use. The adjudicating authority referred to Chapter X of Central Excise Rules, 1944, wherein it is stipulated under Rule 192 that the person intending to obtain remission of duty on such goods, shall make application for licence / registration certificate. Rule 193 also provided that all the goods obtained under Rule 192 shall be transported immediately from the place of procurement to the applicant premises. It was, therefore, obvious that the goods were to be obtained and procured by the consignee at the factory premises of the manufacturer and goods so obtained and procured shall be transported immediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner was dismissed on 5-6-1997 for want of approval from the Committee on disputes. The CEGAT while dismissing the appeal, however, reserved the liberty to the petitioner to revive the appeal, if and when such clearance is obtained. The petitioner had never availed of this liberty. After furnishing of the rewarehousing certificate, the petitioner had filed refund application and after issuance of show-cause notice, the said claim was adjudicated upon by the Assistant Commissioner of Central Excise vide his order dated 16-4-1997, who for the reasons recorded in the said order clearly held that application for refund of the petitioner was liable to be and was accordingly rejected. However, since the refund could not be sanctioned by the said authority, the said order did not preclude the petitioner from claiming refund in case (i) they had filed an appeal against the Order-in-Original of the Commissioner and (ii) if the appellate authority decides in their favour. Subject to the said observation, the refund was rejected. When this order was challenged by the petitioner before the Commissioner (Appeals), the matter was remanded and in view of the said order of remand dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not entitled to refund as the petitioner has not fulfilled condition of Notification No. 75/84-C.E. dated 1-3-1984. The department had issued show-cause notices for recovery of the duty under Rule 9(2) read with Section 11-A of the Central Excise Act and accordingly, the petitioner had paid the duty as per the order in original passed by the adjudicating authority. It is very clear from the order dated 30-11-1995 that the petitioner misused the concession granted under Notification dated 1-3-1984 and cleared the goods in the guise of goods enjoying benefit of concessional rate or duty not for any intended use. Since the duty was demanded under Rule 9(2) read with Section 11A of the Central Excise s Salt Act, 1944, the question of submission of rewarehousing certificate does not arise. Since the duty was paid in accordance with the duty confirmed under Rule 9(2) of the Rules read with Section 11A of the Act, in pursuance of order dated 30-11-1995, the petitioner is not entitled to any refund. He has further submitted that before passing an order, the respondent No. 4 examined the objection of remand case under Rule 156B(1) of erstwhile Central Excise Rules and found that the dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e principles of natural justice or in contravention of any of the fundamental rights enshrined in Part III of the Constitution of India, the High Court often comes out from this self-imposed judicial constraint and takes up the matter to render substantial justice, without driving out the petitioner from pillar to post. In the present case, the Commissioner (Appeals) in his order dated 30-10-1998, after examining the provisions of Rules 156A and 156B of the Excise Rules, found the order in original passed by the Assistant Commissioner of Central Excise, rejecting the claim of refund made by the petitioner, as unsustainable and while setting aside the said order and remanding the case back for de novo adjudication directed to keep in mind that only factual details are required to be verified by the jurisdictional Assistant Commissioner. 16. Despite the order of the Commissioner (Appeals), the Deputy Commissioner of Central Excise, issued show-cause notice repeating the same reasons for rejection of refund claim and passed an order in original on 10-7-2000 holding that the petitioner had made the payment of duty accepting the order in original passed by the Commissioner, Vadodara a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h on technical ground i.e. want of approval from Committee on disputes. As such, the petitioner was not required to file an appeal against the order dated 30-11-1995. For abundant caution, the petitioner filed the said appeal. So far as the order in original dated 30-11-1995 is concerned, it is in fact an order directing recovery of duty under Rule 156B as the petitioner could not produce the rewarehousing certificates within the prescribed period. The show-cause notices were issued for non-production of rewarehousing certificates. It is only because of that, the Commissioner, on assumption, took the view that the consignments of R.C.O. which were used at concessional rate of duty subject to condition for intended use to the said product, were diverted to somewhere else best known to the manufacturer. As such, there was no basis for such erroneous finding. Even otherwise, the said finding vitiated, no sooner the rewarehousing certificates were produced by the petitioner. The petitioner had, therefore, rightly filed application claiming refund of duty paid under Rule 156(B) of the Rules, instead of challenging the order of CEGAT or availing the benefit of liberty reserved by the CEG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duplicate application by the officer at the warehouse of removal duly endorsed as provided in Sub-rule (3) of Rule 156A with a clarification by the officer in charge of the warehouse of destination that the goods covered by the application have been satisfactorily warehoused. 19. In view of the above discussion, we hold that the narrow meaning assigned to the words such duty appeared in Rule 156B(2) is absolutely incorrect and not tenable at law. The petitioner cannot be denied refund on such ground. We accordingly hold and declare that the action of the respondents of denying the refund of duty paid by the petitioner under the order in original dated 30-11-1995 is unreasonable, unconstitutional, inequitable, illegal and void. We, therefore, quash and set aside the order dated 7-11-2005 passed by CESTAT and allow the refund claim of the petitioner. We, therefore, direct the respondents to refund the amount of Rs. 1,11,93,757/- along with interest at the rate at which interest was charged and claimed from the petitioner on the delayed payment of such duty, to the petitioner, within 30 days from the date of receipt of writ of this Court or from the date of receipt of certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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