In the case of Blackberry India Pvt Ltd, the Delhi High Court set aside a Show Cause Notice denying interest in delayed payment of cenvat credit. Since the Revenue is approaching the Supreme Court impugning the order of the Tribunal as well as the order in appeal passed by the Court holding the petitioner entitled to a refund of the CENVAT Credit, it would be open to the Revenue to seek interim orders of protection from the Supreme Court.
The Petitioner challenged the Show Cause Notice whereby the petitioner has been directed to show cause as to why CENVAT Credit amounting to Rs.8,55,34,345/- erroneously refunded along with interest amounting to Rs.4,69,83,731/- erroneously paid towards interest for delayed payment be not recovered and penalty be not imposed for ineligible availment of CENVAT Credit.
Counsel for the petitioner submitted that the petitioner had filed refund applications in 2013 and 2014. A Show Cause Notice was issued to the petitioner on 22.01.2020, as to why the refund was not rejected. Thereafter, an Order-in-Original dated 31.08.2020 was passed whereby the refund for the period April to June 2012, April to June, 2013 and July to September 2013 was rejected. The appeal before the Commissioner (Appeals) was dismissed by the appeal.
Petitioner thereafter approached the Custom Excise & Service Tax Appellate [“CESTAT”] Tribunal and by a final order dated 07.12.2022, the Tribunal held that the refund claim of the petitioner could not have been rejected by the Commissioner (Appeals).
Thereafter, the respondents filed an appeal before the High Court which was dismissed on 12.07.2023 holding that no substantial question of law arises. Thereafter, the petitioner filed a Writ Petition before the Court seeking a grant of interest on the delayed refund. Said petition was allowed by order dated 03.08.2023, directing the Revenue to process the petitioner’s claim for interest under Section 11-BB of the Excise Act read with Section 83 of the Finance Act. Thereafter, the interest on the delayed refund was sanctioned and payment made to the petitioner.
It was not in dispute that under the above-referred proceedings, the amount subject matter of the impugned Show Cause Notice dated 19.01.2024 was paid to the petitioner. Petitioner was refunded an amount of Rs. 8,55,34,345/- towards refund of CENVAT Credit and Rs.4,69,83,731/- towards interest on delayed refund of CENVAT Credit. It was sought to be claimed from the petitioner by the respondent and the petitioner has been directed to show cause as to why the said amount be not recovered along with interest and penalty.
When the Revenue sought to impugned the order of Tribunal holding petitioner entitled for refund, this Court dismissed the challenge by the Revenue holding that the challenge was purely factual and no substantial question of law arises.
A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “Since the Revenue is approaching the Supreme Court impugning the order of the Tribunal as well as the order in appeal passed by this Court holding petitioner entitled to refund of the CENVAT Credit, it would be open to the Revenue to seek interim orders of protection from the Supreme Court. The Revenue cannot after being unsuccessful before the Court, on its own, declare the refund of the CENVAT Credit as well as interest on delayed payment to be erroneous refund. Unless the Revenue is successful before the Supreme Court or the Supreme Court so warrants, there is no question of any refund of the CENVAT Credit or refund of the interest paid to the petitioner.”
The Court quashed the show cause notice.
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