2003 (11) TMI 109 - HC - Central Excise

Refund Ordered with Interest: Rs. 1.16 Crore to Be Returned with 8% Interest, Rising to 15% if Delayed Beyond 3 Months.

GUJARAT INSECTICIDES LTD. Versus UNION OF INDIA

The Court ruled that the amount of Rs. 1,16,41,592/- paid under protest by the petitioners was not duty and must be refunded with 8% interest per annum ... Refund of the amount of pre-deposit - Unjust enrichment - pendency of appeals before the Hon'ble Supreme Court - HELD THAT:- Looking to the fact that the said amount had been retained by the respondent authorities without any justifiable reason, the said amount is ordered to be refunded to the petitioner immediately with interest @ 8% p.a., from 13-2-2003, the date of the order passed by the Hon'ble Supreme Court in the civil appeal preferred by the petitioner [2003 (3) TMI 742 - SC ORDER]. The said amount shall be refunded to the petitioner within three months from the date of receipt of a certified copy of this judgment. If the said amount is not paid within 3 months, the rate of interest shall be raised to 15% after completion of 3 months till the amount is paid to the petitioner. Looking to the fact that the petitioner has been constrained to approach this court for claiming the amount, which it had a right to get in pursuance of the order passed by the Hon'ble Supreme Court, costs to the tune of Rs. 2,500/- is ordered to be paid to the petitioner and the said amount shall also be paid along with the amount of refund and interest. Thus, the petition stands disposed of as allowed. Rule is made absolute D.S. permitted. Issues involved: Refund of amount paid under protest during pendency of appeals before the Hon'ble Supreme Court, consideration of amount as duty by respondent authorities, obligation to provide evidence of non-passing of duty incidence to buyers, entitlement to refund based on legal precedents and circular.Refund of Amount Paid Under Protest: The petitioners had deposited a sum of Rs. 1,16,41,592/- under protest with the respondent authorities during the pendency of appeals before the Hon'ble Supreme Court. The Supreme Court later allowed the appeals, holding that the concerned intermediate products were not dutiable. The petitioners sought refund of the amount, which was not refunded by the respondent authorities despite the Supreme Court's decision.Consideration of Amount as Duty: The respondent authorities, in an order dated 10-6-2003, directed the amount to be credited to the Consumer Welfare Fund, treating it as duty paid. The petitioners contended that the amount was paid under protest and was not duty, as no stay had been granted by the Supreme Court during the appeals.Obligation to Provide Evidence: The Asstt. Commissioner called upon the petitioners to submit proof that the duty amount had not been passed on to the buyers. The petitioners clarified that the amount was paid under protest and was not duty, hence no evidence of non-passing of duty incidence was required.Entitlement to Refund: The petitioners argued, citing legal judgments and a circular, that the amount paid under protest was not duty and should be refunded based on the Supreme Court's decision and relevant legal principles. The respondent authorities contended that the amount deposited was indeed duty and no interest should be paid on any refund.Court's Decision: After considering the arguments and legal precedents, the Court held that the amount paid under protest was not duty and should be refunded to the petitioners with interest. The Court ordered the immediate refund of the amount with 8% interest per annum from the date of the Supreme Court's order. If not paid within three months, the interest rate would increase to 15%. Additionally, the petitioners were awarded costs of Rs. 2,500 for having to approach the Court for the rightful refund.