LexUNION OF INDIA & ANR. versus SHREEJI COLOUR CHEM INDUSTRIES
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[2008] 13 S.C.R. 502 Y' A UNION OF INDIA & ANR. v. SHREEJI COLOUR CHEM INDUSTRIES (Civil Appeal No. 5643 of 2008) SEPTEMBER 15, 2008 ... B [DR. ARIJIT PASAYAT AND DR. MUKUNDAKAM SHARMA, JJ.) Central Excise Act, 1944 - s. 11 BB - Interest for delayed c refund of amount payable under the Act and the Rules - En- titlement to - Held: On fact~, assessee entitled to interest from 12th April, 2004 to 26th August, 2004- Claim of assessee for equitable interest, however, not tenable, since assessee made no written demand therefor - Central Excise Rules, 1944 - D r.173L. Respondent claimed refund of amount payable un- der the Central Excise Act, 1944 and the Central Excise Rules, 1944. The claim was rejected b~ the Assistant Com- missioner and the Commissioner, but upheld by the Ap- E pellate Tribunal. Respondent was subsequently sanctioned refund on 27th August, 2004. Earlier, on 12th January, 2004, Re- spondent had filed application claiming statutory inter- est for delay in refund. The High Court granted interest at r F the rate of 9% w.e.f. the first day on which the Asstt. Com- missioner rejected the prayer for refund. Aggrieved, Appellant contended before this Court that interest became payable only after three months from G the date of application for interest. Appellant also con- tested claim for equitable interest by the Respondent. Partly allowing the appeal, the Court ...- HELD: In terms of s.1188 (1) of the Central Excise H 502 UNION OF INDIA & ANR. v. SHREEJI COLOUR 503 CHEM INDUSTRIES Act, 1944, Respondent-assessee is entitled to interest A from 12th April, 2004 to 26th August, 2004. As regards claim of interest on equitable ground, a written demand therefor is imperative. In the instant case no such written demand was mad~. [Paras 9,10) [507-C & DJ Modi Industries Ltd., Modinagar & Ors. v. Commissioner B of Income Tax, De/bi & Ors. [1995 (6) SCC 396) and Clariant International Ltd. v. Securities and Exchange Board of India, 2004 (8) sec 524 - relied on. Sandvik Asia Ltd. v. Commissioner of Income Tax I, Pune c and Ors. [2006 (2) sec 508) - referred to . . Case Law Reference 2oos (2) sec 50B 1995 (6) sec 396 2004 (8) sec 524 referred to relied on relied on Para 3 Para 7 Para 8 CIV_ILAPPELLATE JURISDCTION : Civil-Appeal No. 5643. of 2008 D From the Final Judgment and Order dated 3.3.2006 of E the High Court of Gujarat at Ahmedabad .in S.C.A. No. 1315/ 2006 Naresh Kaushik, Asha G. Nair and B. Krishna Prasad for the Appellants. · · Dayan Krishnan, Ankul Saigal, Bina Gupta and Gaurav Singh for the Respondent. The Judgment of the Court was delivered by Dr. ARIJIT. PASAYAT, J. 1. Leave,granted. .. 2. Challenge ·in this appeal is to the judgment of a Division ,... Bench of the Gujarat High Court directing ~grant of interest to the respondent for alleged delayed refund of amount payable under Central Excise Act, 1944 (in short the 'Act') and Central F - G Excise Rules, 1944 (in short the 'Rules'). H 504 SUPREME COURT REPORTS [2008] 13 S.C.R. • ..... A 3. Background facts are undisputed and are essentially as follows: Refund was claimed by the respondent before the Assis- tant Commissioner, Central Excise and Customs Division IV, Vadodara, for refund of Rs.2,50,494.31. The applications which --< B were filed under Rule 173L of the Rules were rejected by the Assistant Commissioner by order dated 24.7.1991. Being ag- grieved by the said order, respondent preferred an appeal be- fore the Commissioner of Appeal, Mumbai who remitted the c matter for de novo consideration. After hearing the respondent, the said applications were again rejected. Respondent again preferred an appeal on 21.5.1996 before the Commissioner of Appeal which was dismissed by order dated 31.8.1998. Being aggrieved by the said order, the respondent preferred an ap- peal before the Customs Excise and Gold Control Appellate D Tribunal West Regional Bench (in short the 'CEGAT'). By order .,..- dated 25.11.2003 CEGAT allowed the appeal and inter alia held as follows: "I find no reason to reject the claims of refund under Rule E 173L amounted to Rs.2,50,454/- in all. The same should be paid to the appellant without delay." The respondent filed an application before the Assistant Commissioner on 12.1.2004 requesting for refund of the amount along with statutory interest which became payable from F 26.8.1995. By order dated 27.8.2004 the Deputy Commissioner
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