- (1.) R. K. Agrawal, J. By means of 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- 8-1995 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. " Briefly stated the facts giving rise to the present writ petition are as follows:
(2.) 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 respect of first dispute, according to the petitioner, the Assistant Collector, Central Excise, Division III, Ghaziabad vide order passed on 14th May, 1992 had held that a sum of Rs. 71,10,431/- became refundable to the petitioner. THE second dispute was settled by the Commissioner (Appeals) Central Excise, Ghaziabad vide order dated 29th May, 1992 wherein a sum of Rs. 41,396. 32 was fund to be refundable to the petitioner. THE third dispute was settled by the Assistant Collector, Central Excise Division IV, Ghaziabad vide order dated 21st September, 1990 wherein a sum of Rs. 2,38,668. 88 was found to be refundable to the petitioner. Pursuant to the orders passed by the authorities the petitioner filed three separate applications seeking refund of the respective amounts. THE first application seeking refund of Rs. 71,10,431/- was filed on 6th November, 1992 whereas the second application seeking refund of Rs. 41,396. 32 was filed on 18th December, 1992 and the third application seeking refund of Rs. 2,38,668. 88 was filed on 26th February, 1991 before the Assistant Collector, Central Excise Division IV, Ghaziabad. All the amounts as claimed by the petitioner have been refunded on 14th November, 2005. However, interest on the amount of refund had not been granted. THE petitioner is claiming interest on the amount of refund in view of the provisions of Section 11-BB of the Central Excise Act, 1944 (hereinafter referred to as the Act ). In the counter-affidavit filed by Manish Saxena, Deputy Commissioner Central Excise Division IV, Noida on behalf of the respondents it has been stated that the dispute regarding refund was not finally settled as claimed by the petitioner because the refund claim was rejected by the Assistant Commissioner, Central Excise Division IV, Ghaziabad vide order dated 24th September, 1996 whereafter the matter was taken up in appeal before the higher authorities and was finally settled by the Apex Court vide order dated 21st February, 2005. Thereafter, the petitioner filed three fresh refund claims on 5th March, 2005 which have been allowed vide order dated 14th November, 2005 and refund was also made. The liability for payment of interest in terms of Explanation to Section 11-BB of the Act arises only after the dispute is finally settled and as the refund has been made within the stipulated period, there is no liability for payment of interest. 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 11-BB of the Act.
(3.) 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. 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 26-2-1991, 16-11-1992 and 18-12- 1992 were illegally rejected by the Central Excise Authorities on the plea of unjust enrichment. The Apex Court vide order dated 21- 2-2005 had held that the question of unjust enrichment does not arise in the case of provisional assessment. According to him the withholding of refund on an erroneous view taken by the respondents, cannot be said to be justified or correct and, therefore, interest is payable in terms of Section 11-BB of the Act with effect from 26th August, 1995 at the applicable rate. He further claimed that the amount of interest has been illegally withheld and the petitioner has been deprived of use of its own money for a considerable period. The respondents are liable to compensate the petitioner by making payment of interest over the amount of interest from 14th November, 2005 till it is paid. In support of various pleas raised herein, he has relied upon the following decisions : 1. Hamdard (Wakf) Laboratories v. Union of India, 2005 (188) ELT 476 (Alld) 2. J. K. Cement Works v. Asstt. Commissioner of Central Excise and Customs, 2004 (170) ELT 4 (Raj) 3. Order dated 21st February, 2005 passed by the Apex Court in Special Leave to Appeal (Civil) No. 21547 of 2004 against the decision of the Rajasthan High Court in the case of J. K. Cement Works. 4. Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune, 2006 (196) ELT 257 (SC ).;