TMI Blog2007 (2) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... f the present writ petition filed under Article 226 of the Constitution of India the petitioner, M/s. U.P. Twiga Fiber Glass Limited, seeks the following reliefs : (i) issue a writ order or direction in the nature of mandamus and direct the respondent no. 2 to forthwith pay interest to the petitioner on the delayed payment of refund to it Rs. 73,18,337/- from 26-8-95 at the rates applicable under the Act. (ii) Award cost of this petition to the petitioner. (iii) Pass such other and further writ, order or direction in favour of the petitioner as this Hon'ble Court may deem fit and proper in the circumstances of the case. 2. Briefly stated the facts giving rise to the present writ petition are as follows : The petitioner is a Public Limited Company duly incorporated under the provisions of the Companies Act, 1956. It has engaged in the business of manufacture and sales of articles of glass fiber and glass wool. According to it these articles fall under Chapter 70 of the Schedule of the Central Excise Tariff Act, 1985. Disputes arose between the petitioner and respondent no. 2 regarding classification and valuation of articles/goods manufactured by it. In r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. In the rejoinder affidavit filed by the petitioner, it has been stated that the refund claim which has been paid vide order dated 14th November, 2005 had arisen consequent upon the finalization of three disputes on classification and valuation. The disputes had already been settled by the year 1992 and the claim of refund was rejected only on the ground of unjust enrichment, which had already been disapproved by the Apex Court. As the petitioner has been denied the amount of refund for a very long period for no fault of it, it is entitled for interest in terms of Section 11BB of the Act. 5. We have heard Sri S.V Arya, learned Counsel for the petitioner and Dr. A.K. Nigam, learned Additional Solicitor General on behalf of the respondents. 6. Sri Arya, learned Counsel submitted that the dispute regarding classification and valuation had been settled by the year 1992 wherein the authorities have directed for the refund of the excess amount paid by the petitioner. The claims of refund made by the petitioner on 26-2-91, 16-11-92 and 18-12-92 were illegally rejected by the Central Excise Authorities on the plea of unjust enrichment. The Apex Court vide order dated 21-2-2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner had enclosed a copy of the order dated 14th November, 2005 passed by the Deputy Commissioner, Central Excise, Division-V, Noida - respondent no. 2 as Annexure 3 to the writ petition wherein the respondent no. 2 while sanctioning refund had declined to grant interest, the petitioner for reasons best known has not sought quashing of the said order. We would have declined to go into the merit of the case on the short ground alone but looking the nature of the claim made by the petitioner we have proceeded to decide the issue on merits. 9. We have given our anxious consideration to the various pleas raised by the learned Counsel for the parties. It is not in dispute that all the disputes, which are three in number, giving rise to the claim of refund regarding classification and valuation of articles/goods manufactured or cleared by the petitioner have been settled by the authorities on 21-9-1990, 14-5-1992, 29-5-1992. The authorities have found that a sum of Rs. 2,38,668.88, 71,10,431.00 and 41,396.32 respectively is refundable to the petitioner. The petitioner had filed claims for refund on 26-2-91, 6-11-92 and 18-12-92 in respect of the aforesaid amount. The claims of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delayed refund) has been inserted by the Finance Act, 1955 (22 of 1995) w.e.f. 26-5-1995. Further it is pertinent to mention here the liability to pay interest arises only when dispute has been finally settled as per decision of Tribunal in the case of Birla Corporation Ltd. v. CCE - 2002 (144) E.L.T. 674 (Tri) and Calcutta Jute Manufacturing Company v. Commercial Tax Officer in 1997 (93) E.L.T. 657 (SC). 12. In the case of Hamdard (Wakf) Laboratories (supra) this Court while considering the provisions of Section 11BB of the Act has held as follows : From a bare reading of the provisions of Section 11-BB of the Act, we find that the legislature by the aforesaid provision has cast a duty upon the adjudicating authority to decide the claim for refund immediately within three months failing which the liability for interest start running after excluding the period of three months from the date of the application. Admittedly, in the present case, it is not in dispute that the claim for refund was made on 25th August, 1999 whereas the order for refund has been passed on 16th November, 2000. Under the provision of Section 11-BB of the Act, interest start running after three mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue became liable to pay interest w.e.f. 26-8-95 until the date of actual payment. 14. The Apex Court vide order dated 29th October, 2004 had dismissed the special leave petition against the aforesaid judgment of the Rajasthan High Court. From the aforesaid decision it is absolutely clear that the department is liable to pay interest at the specific rate under Section 11BB of the Act if the refund has not been made within three months from the date of the making of the application and if the application has been made prior to coming into force the Section 11BB of the Act then after three months from the date when the Finance Bill, 1995 by which Section 11BB of the Act was inserted had received the assent of the President. It may be mentioned here that the Finance Bill received the assent of the President on 26th May, 1995 and, therefore, if the refund has not been made by 25th August, 1995 where the application has been made prior to the insertion of Section 11BB in the Act interest starts running from that date i.e. 26th August, 1995 till it is actually paid. 15. In the case of Sandvik Asia Ltd (supra) the Apex Court has held that that if the revenue takes erroneous ..... X X X X Extracts X X X X X X X X Extracts X X X X
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