TMI Blog2006 (4) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... y also in the same premises. It is stated that the establishment of the petitioner is engaged in manufacturing and sale of woven sacks made out of high density polyethylene/polypropylene (HDPE/PP). The aforesaid item is said to be important packing material. It is stated that the petitioner is exporting the material manufactured and is earning substantial foreign exchange for the country. According to the petitioner the product in question is classified under Chapter 39 (Plastics and Articles) as per Schedule to the Central Excise Tariff Act, 1985 and are chargeable to Central Excise accordingly. Govt. of India had introduced the Modvat (Modified Value Added Tax Scheme) with effect from 1-3-86 thereby allowing certain benefits for duty paid on inputs for discharging Central Excise duty on the final product in the manufacture of which the said inputs are used. Government was empowered to issue notification in this regard under Rule 57A of Central Excise Rules, 1944 for specifying the inputs and final product on which the scheme of Modvat was applicable. 3.It is the case of the petitioner that from time to time various notification have been issued enlarging the scope of Modvat sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not dispose the claim of the petitioner for grant of Modvat credit, petitioner approached this Court by filing W.P. 501/98. This petition was disposed of by this Court vide order dt. 30-11-99 directing respondent no. 2 to decide the claim of the petitioner and the show-cause notice Annexure G dt. 2-11-95 within a period of two months from the date of receipt of certified copy of this order. Copy of the order passed by this Court on 30-11-99 is Annexure I to this petition. Accordingly, the matter was taken up for personal hearing on 1-12-99 and the show-cause notice was disposed of vide order dt.10-12-99. By this order petitioner was allowed Modvat credit of Rs. 3,30,644/- out of the total claim of Rs. 32,34,650/- and remaining claim of the petitioner for Modvat credit amounting to Rs. 29,03,971/- was disallowed. Copy of this order dated 10-12-99 is Annexure J. Aggrieved by this order, petitioner again preferred a Writ Petition No. 418/00 before this Court and it is the grievance of the petitioner that even though this petition was filed on 18-2-00 the matter was not heard as the respondents failed to file reply in time. Finally the said writ petition was allowed vide Annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2005 (185) E.L.T. 19 (Guj.), Shri Asthana argued that petitioner is entitled to interest in accordance with the provisions of Section 11BB and the same cannot be denied by the respondents. Thereafter, referring to the various judgments of High Court's and Supreme Court in the matter of payment of interest while deciding the claim for refund of duty paid, Shri Asthana argued that petitioner is entitled for refund of the amount along with interest as claimed and, therefore, seeks a direction to the respondents to pay interest to the petitioner. Judgments relied upon in this regard by Shri Asthana are : (i) Elpro International Ltd. and Others v. Joint Secretary, Govt. of India, Ministry of Finance and others, 1985 (19) E.L.T. 3 (S.C.) (ii) Judgment of Calcutta High Court in the case of Collector of Customs (Preventive) v. Kuljit Singh, 1993 (67) E.L.T. 238 (Cal.). (iii) Judgment of Supreme Court in the case of Sandvik Asia Ltd. v. Commissioner of Income-tax-I, Pune, 2006 (196) E.L.T. 257 (S.C.) and various other judgments annexed with the petition. 9.Accordingly Shri Asthana submits that petitioner is entitled to interest on the delay caused by the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im for interest cannot be entertained in a writ petition under Article 226 of the Constitution whereas in the case of the petitioners they have claimed Modvat credit under Rule 57H when they filed the application on 2-7-90 and what has been rejected by the department is the claim for interest. That being so, it was argued by Shri Asthana that the rejection of the claim in part with regard to interest can be agitated by the petitioner now in this petition and the law laid down in the case of Kirloskar (supra) will not apply. 13.I have heard learned counsel for the parties at length and perused the record. 14.As far as the factual aspect of the matter is concerned, there is not dispute between the parties. Petitioner claims interest on the amount from 2-7-90 upto the date of its payment i.e. 25/28-6-02 when the amount of Modvat credit to the tune of Rs. 29,03,971/- was directed to be refunded. Claim of the petitioner is based on general principle with regard to delay in settlement of the claim of the petitioner so also on the basis of Section 11BB of the Central Excise Act. Accordingly, I will take up for consideration claims for both the periods separately. 15.Section 11BB of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate notified by the Central Govt. in accordance with the provisions of Section 11BB of the Central Excise Act. To that extent relief claimed for by the petitioner has to be allowed. 16.The next part of the claim pertains to the period 2-7-1990 up to 21-8-1995. Even though in the cases referred to by Shri Asthana and in particular in the case of Rewa Gas Private Limited (supra) a Bench of this court has allowed interest but the fact\remains that another Bench of this court in the case Kirloskar (supra) has held that in case the claim for interest is not based on any statutory provision like Section 11BB but is based on general principles, writ petition claiming the aforesaid benefit under Article 226 of the Constitution is not maintainable. The question, therefore, is can this court consider the claim for interest for this period in these proceedings under Article 226 of the Constitution. The judgment in the case of Rewa Gas Private Limited has been stayed by the Supreme Court in Union of India v. Rewa Gas Private Limited, 2003 (153) E.L.T. A168 (S.C.) and, therefore, relief claimed on the basis of this judgment cannot be considered as the judgment in question is stayed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-1990 to 2-8-1995 is not based on any statutory provision and, therefore, a writ petition under Articles 226 and 227 of the Constitution is not maintainable. 17.At this juncture it would be appropriate to take note of the law laid down by the Supreme Court in the case of Sandvick Limited (supra) reliance on which was placed by Shri Asthana for claiming interest on the ground that for delay caused by the department the assessee is entitled to be suitably compensated. In the case of Sandwick Asia Ltd. (supra) Supreme Court was considering the question of delayed payment of interest made to a assessee under the Income-tax Act and while considering the aforesaid claim in view of the provisions of Section 244-I of the Income-tax Act and various other statutory provisions providing for grant of interest under the Income-tax Act, claim for interest was allowed by the Supreme Court. In this case claim for interest was made on the basis of statutory provision as contained in the Income-tax Act and, therefore, said judgment will not help the petitioner to claim interest for the period when there was no statutory provision for payment of interest. There is nothing on record to indicate th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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