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2002 DIGILAW 598 (GUJ)

VIPOR CHEMICALS PRIVATE LIMITED v. UNION OF INDIA

2002-08-06

K.A.PUJ, M.U.SHAH

body2002
M. S. SHAH, K. A. PUJ, J. ( 1 ) RULE. Mr DN Patel, learned Sr. Standing Counsel waives service of rule on behalf of the respondents. ( 2 ) IN this petition under Article 226 of the Constitution, the petitioner has challenged the action of the respondent- authorities under the Central Excise Act, 1944 of withholding payment of sanctioned rebate claims aggregating to Rs. 1,36,998. 00 and withholding payment of interest on delayed payment of refund. The petitioner has also prayed for a writ of mandamus to direct the respondent- authorities to pay the aforesaid amount of Rs. 1,36,998. 00 as the sanctioned rebate claims alongwith statutory interest at the prescribed rate on delayed payments of rebate till the date of payment. ( 3 ) THE facts leading to filing of this petition are as under:-3. 1 the petitioner is a limited company incorporated under the Companies Act, 1956 and is engaged in the business of manufacturing inorganic, organic chemicals and pharmaceutical products. The petitioner cleared finished excisable goods for export on payment of central excise duty, and on actual export of the goods claimed rebate as contemplated under Rule 12 (1) (a) of the Central Excise Rules, 1944 vide applications as under:-I. 25-1-2000 rs. 36,718/- ( 4 ) AFTER this Court issued notice on 8-7-2002 for final disposal, on 22-7-2002 the Deputy Commissioner has passed order returning the amounts of Rs. 1,36,998. 00 and interest of Rs. 2507. 00 aggregating to Rs. 1,39,505. 00 by a single cheque to the petitioner. The petitioners representative was called by the department on 23-7-2002 and was handed over the aforesaid cheque for the amount of Rs. 1,39,505. 00. The petitioners representative, however, returned the said cheque to the department on the next day on the ground that the cheque amount was not sufficient to cover the payment of interest for the delay involved. In response to the notice issued by this Court, affidavit-in-reply has been filed by Mr Pranesh Pathak, Deputy Commissioner of Central Excise and Customs, Division-II, Vadodara who is the successor to Mr HS Sharma. Even in the said reply affidavit, attempt is made to explain away the delay and it is stated that the "disbursement of the cheque to the petitioner got somewhat delayed due to administrative exigencies and there was no malafide intention or to harass the petitioner deliberately. Even in the said reply affidavit, attempt is made to explain away the delay and it is stated that the "disbursement of the cheque to the petitioner got somewhat delayed due to administrative exigencies and there was no malafide intention or to harass the petitioner deliberately. It is submitted that in case the petitioner had any grievance in respect of the disbursement of the cheque pertaining to the refund, the petitioner was free to avail the appellate remedy. " it is submitted in the said reply that once refund had been granted by respondent No. 3 - adjudicating authority, he was not empowered to review his order or to deal with the petitioners grievance regarding disbursement of cheque pertaining to the refund. There is no explanation on record showing the calculation of interest at Rs. 2507. 00 offered by the aforesaid cheque. ( 5 ) AT the hearing of this petition, Mr Mihir Joshi, learned counsel for the petitioner has submitted that the facts stated in the petition which are not controverted in the reply affidavit are eloquent and that the respondents had no justification for not paying the entire amount of rebate claim amounts in all the four applications, more particularly, when the Assistant Commissioner himself had sanctioned the rebate claims on 12-2-2001. As regards the adjustment made against the alleged pending dues of M/s. JJ Chemicals, it is submitted that apart from the fact that the petitioner-Company and M/s. JJ Chemicals were two separate legal entities, the CEGAT had vide its order dated 14-10-2000 remanded the matter to the Commissioner (Appeals) for deciding the appeal of M/s. JJ Chemicals without any pre-deposit. As regards the other adjustment also, the CEGAT had granted stay in favour of the petitioner on 28-3-2001 and, therefore, there is considerable substance in the case set out by the petitioner in the representations dated 6-7-2001 that Superintendent Mr Chauhan had not acted honestly and Deputy Commissioner Mr HS Sharma was shielding him. It is further submitted that even the cheque tendered pursuant to the Deputy Commissioners so-called order dated 22-7-2002 was also inclusive of a token interest amount of Rs. 2507. 00 so that the petitioner would have to accept this small and insignificant amount of interest in order to get the principal rebate claim amount of Rs. 1,36,998. 00. It is further submitted that even the cheque tendered pursuant to the Deputy Commissioners so-called order dated 22-7-2002 was also inclusive of a token interest amount of Rs. 2507. 00 so that the petitioner would have to accept this small and insignificant amount of interest in order to get the principal rebate claim amount of Rs. 1,36,998. 00. The learned counsel for the petitioner has, therefore, pressed for the reliefs prayed for including payment of statutory interest and costs. ( 6 ) ON the other hand, Mr DN Patel, learned Senior Standing Counsel for the respondents has submitted that since the principal rebate claim has been offered to the petitioner after filing of the petition, nothing further is required to be done in this matter. Mr Patel for the respondents is, however, not in a position to state as to what action has been taken by the Commissioner against Superintendent Mr Chauhan or Deputy Commissioner Mr HS Sharma who is now replaced by Mr Pranesh Pathak, deponent of the reply affidavit. ( 7 ) HAVING heard the learned counsel for the parties, we are of the view that the so-called explanation offered on behalf of the respondents for the delay in payment of the rebate claims cannot be accepted. When the assessee is entitled to rebate claims without any adjustment and even the Commissioner (Appeals) found substance in the grievance of the petitioner that illegal adjustments were made and continued against sanctioned rebate claims, the authorities were bound to pay the rebate claims to the petitioner with statutory interest. Apart from not paying statutory interest to the petitioner, the respondents have also not taken any action against the officers who were responsible for the delay in payment of the rebate claims. The petitioner had made reference to the employees who were responsible for the delay and who were either demanding illegal gratification or shielding the officers making such demand. The Commissioner of Central Excise and Customs was expected to take a serious view of such specific complaint and to take appropriate action in light of such a complaint. Even if the Commissioner had no authority, he was required to invite attention of the higher authorities to such specific complaint made against the responsible officers of the rank of Deputy Commissioner and Superintendent. Even if the Commissioner had no authority, he was required to invite attention of the higher authorities to such specific complaint made against the responsible officers of the rank of Deputy Commissioner and Superintendent. It, therefore, appears to the Court that while the petitioner would certainly be entitled to the reliefs prayed for, and the department would have to comply with the directions being issued by this Court, interest for the delay in payment of rebate claims as well as the costs which the department will have to pay to the petitioner must be reimbursed by the department from the officers who were responsible for the delay, apart from any other action which may be taken against the officers, if the petitioners complaint contained in the representation dated 6-7-2001 is found to be correct. ( 8 ) THE petitioner has given details about the extent of delay in payment of refund amount as set out in paragraph 3. 7 hereinabove. There is no reason why the petitioner should not be paid the statutory interest on the amounts involved for the said delay at the statutory rate of interest which is 9%p. a. . The respondents also must be saddled with the costs of this petition quantified at Rs. 10,000. 00. ( 9 ) IN view of the above discussion, the petition is allowed in terms of the following directions:-I (A) The respondents are directed to pay the petitioner refund amount of Rs. 1,36,998. 00 by an account payee cheque within one week from the date of receipt of the writ of this Court or a certified copy of this order. (b) The respondents shall also pay the petitioner the interest at the statutory rate for the delay in payment of Rs. 1,36,998. 00 from 17-11-2000 till the date of payment. 1,36,998. 00 by an account payee cheque within one week from the date of receipt of the writ of this Court or a certified copy of this order. (b) The respondents shall also pay the petitioner the interest at the statutory rate for the delay in payment of Rs. 1,36,998. 00 from 17-11-2000 till the date of payment. (c) The respondents shall also pay the petitioner interest at the statutory rate of interest on the amounts refunded mentioned in column No. (iv) and for the period mentioned in column No. (v):- - Application amount refund amount delay interest Date claimed paid on refunded Amount (Rs.) (Rs.) (days) (Rs.) (i) (ii) (iii) (iv) (v) (vi) -- 25-01-2000 36,718 4-4-2001 36,718 340 5,130 03-10-2000 4,34,712 4-4-2001 4,34,712 80 14,291 17-11-2000 2,31,161 4-4-2001 1,70,186 47 3,287 17-11-2000 1,47,876 4-4-2001 71,853 47 1,387 - 24,095 - (d) The respondents shall also pay the petitioner costs of this petition which are quantified at Rs. 10,000. 00 (Rupees ten thousand) in one set. (e) The aforesaid directions No. (b) to (d) shall be complied with within one month from the date of receipt of the writ of this Court or a certified copy of this order, whichever is earlier. II. If the respondents do not comply with the aforesaid directions within the aforesaid time limit, the respondents shall be liable to pay further interest at the rate of 9%p. a. on the amount/s of interest awarded by this judgment and remaining unpaid on the date of expiry of the period/s stipulated in the aforesaid directions. III. While the respondents shall pay the aforesaid amounts to the petitioner within the aforesaid time limit, the amounts of interest and costs shall be recovered by respondents No. 1 and 2 from the officers who are found to be responsible for the delay and such inquiry shall be made within three months from the date of receipt of the writ of this Court or a certified copy of this order, whichever is earlier. Compliance with this direction and initiation of any disciplinary action against the officer/s responsible for delay shall be brought to the notice of this Court by 6th December, 2002. ( 10 ) RULE is made absolute to the aforesaid extent. Direct service is permitted. .