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Kirloskar Brothers Limited and Anr. Versus Union of India (UOI) and Ors.

2000 (11) TMI 1245 - MADHYA PRADESH HIGH COURT

Misc. Petition No. 1005/91 - Dated:- 7-11-2000 - MR. A.M. Sapre, J. For Appellant/Petitioner/Plaintiff: J.P. Gupta, Sr. Adv. and Abhyankar, Adv. For Respondents/Defendant: B.G. Neema, Adv. ORDER A.M. Sapre, J. 1. Petitioner, a limited company, has filed this writ under Articles 226 and 227 of Constitution of India, claiming following relief by way of issuance of writ of mandamus against the respondents:- "The petitioner be awarded interest at the rate of 18% p.a. on amounts illegally realis .....

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ndents to petitioner. This relief is founded on the allegation that the petitioner - a limited company, is engaged in the business of manufacturing of monoblock pumps. According to petitioner, they filed a classification list in respect of monoblock pumps and claimed that due to their peculiar manufacturing, they are not exigible to any excise duty. In other words, the case of petitioner was that the rate of duty leviable on these pumps was nil in terms of one exemption notification No. 57/78, d .....

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eventually decided in favour of petitioner at the appellate stage. As a consequence of a declaration granted in favour of petitioner in appeal and it having attained the finality, that no duty is payable on these monoblock pumps, the petitioner became entitled to claim refund of the excise duty which was paid by them under protest. Eventually, after some correspondence, the department refunded a sum of ₹ 1,28,27,885/- in two instalments i.e. one on 29-11-1986 and other on 17-10-1988 to th .....

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sum of ₹ 1,37,77,570/- by way of interest which was calculated at the rate of 18% per annum on the amount which was refunded but late. 3. Heard Shri J.P. Gupta, learned senior counsel with Shri Abhyankar, learned counsel for petitioner, and Shri B.G. Neema, learned counsel for respondents. 4. Shri Gupta, learned senior counsel relying upon series of cases decided by Supreme Court as also by High Courts cases viz. 1979 ELT (J 181) Vijay Textile v. Union of India High Court, Gujrat 1979 ELT .....

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v. Union of India 1988 (5) ELT 88 Dharangdhara Municipality v. Dharangadhara Chemicals HC Guj., Mettal Distributors Limited v. Union of India, HC Bom., 1988 (38) ELT 507 Still Strips Limited v. Collector Central Excise, New Delhi 1988 (36) ELT 537 U. FOAM Private Limited v. Assistant Collector Central Excise HC Hydrabad, 1988 (33) ELT 591 Engineering Projects Limited v. Collector Collector Customs, Calcutta, 1988 (33) ELT 648 Gurucharan Industry Ltd. v. Union of India HC Allahabad, 1989 (41) EL .....

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1) ELT 255 Prestige Engineering (P) Ltd. v. Union of India HC All., 1991 (53) ELT 299 Rubber Products Ltd. v. Union of India HC Bom. and 1991 (51) ELT 325 Kirloskar Cummins Ltd. v. Union of India HC Bom. urged that the claim of the petitioner towards interest is not only genuine but bonafide and legal as well. According to learned counsel, the decisions cited by him supra, were also dealing with the same issue which is involved in this case and in all these cases the High Court and in some cases .....

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case where this Court in exercise of its writ jurisdiction under Articles 226 and 227 of Constitution can issue or/and should issue a writ of mandamus and grant a relief of payment of interest in the form of a money decree for ₹ 1,37,77,570/-. 6. In reply, learned counsel for the respondent Shri Neema, Standing counsel for Union of India placing strong reliance on a recent decision rendered by Supreme Court in the case of Union of India v. Orient Enterprises reported in (AIR 1998 SC 1729) .....

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equent decision. It was urged that facts of the present case and that of one in the case of Orient Enterprises (supra) are identical in nature and hence law laid down by the Supreme Court squarely applies and concludes the controversy against the petitioner. In substance, therefore, the submission of learned counsel for the respondent on the basis of this decision was that writ tiled by petitioner under Article 226 of Constitution for claiming interest is not maintainable and has to be dismissed .....

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pt the submission of learned counsel for the respondent. In my opinion, the controversy involved in this writ is squarely covered by the decision of Supreme Court in the case of Orient Enterprises supra. In that case also the writ was filed claiming interest only on the delayed refund of the duty paid by the assessee towards custom duty. Indeed, precisely the question posed by their Lordships of Supreme Court for the decision was this:- "The common question that falls for consideration in t .....

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has only claimed a relief of interest by way of mandamus. This is what their Lordship ruled:- "The Court has emphasised that there was no legal right in the appellant who had filed the writ petition to claim refund under the relevant statute. In the present case also till the insertion of Section 27A in the Act by Act 22 of 1995 there was no right entitling payment of interest on delayed refund under the Act. Such a right was conferred for the first time by the said provisions. Act 22 of 1 .....

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from the respondents by way of customs duty, redemption fine and penalty. In view of the law laid down by this Court in Suganmal (AIR 1965 SC 1740) (Supra) a writ petition seeking the relief of payment of interest on delayed refund of the amount so collected could not, in our opinion be maintained. The decisions on which the reliance has been made by Shri Rawal were cases where the legality of the orders requiring payment of tax or duty were challenged and the High Court in exercise of its juri .....

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it petition filed by the respondents before the High Court is dismissed. No order as to costs. While dealing with Civil Appeal No. 3374 of 91 we have held that a writ petition seeking relief of interest in respect of the amount deposited to wards redemption charges under an adjudication order which amount had been refunded after the said order was set aside could not be maintained under Article 226 of Constitution of India. For the reasons given in the said judgment the impugned judgment of the .....

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submission of learned counsel for the petitioner was that the decision rendered by the Supreme Court in the case of Orient Enterprises supra is per incurium because according to learned counsel earlier decisions of Supreme Court on this issue where interest was awarded were rendered by larger Bench and secondly, those decisions still hold the filed. I do not agree to this submission. The cases on which reliance was placed by learned counsel for the petitioner was 1985 (19) ELT 3 (SC) and 1989 ( .....

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to Supreme Court at the instance of department, their Lordships while granting leave to appeal imposed a condition that it will be open for the assessee to claim interest if the appeal filed by Union of India is eventually dismissed. It is in this context when the appeal filed by Union of India was ultimately dismissed by the Supreme Court, their Lordships then gave effect to their interim order and allowed some interest. This decision can not be therefore cited as an authority for the propositi .....

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