Punjab & Haryana High Court Grants Major Relief to Haryana Power Utility in 25-Year-Old Excise Dispute

In a major relief to Haryana Vidyut Prasaran Nigam Limited (HVPNL), the Punjab and Haryana High Court has ruled that the company is entitled to interest on an excise duty refund that was delayed for over a decade, in a dispute stretching back nearly 25 years.

The matter dates to the late 1980s, when the power transmission utility received a show-cause notice over excise duty on fabricated steel structure towers. Though HVPNL contested the levy, it deposited around ₹30 lakh under protest, stating that the payment was made under pressure and without accepting liability.

In 1987 and again in 1990, appellate authorities ruled in favour of the company, effectively clearing it of the duty demand. Despite these decisions, the refund was not released promptly. HVPNL continued writing to the department, but the amount was finally sanctioned only on December 29, 2000 — years after the favourable rulings. 

However, while the principal amount was repaid, the issue of interest on the delayed refund was still pending, compelling the corporation to move the High Court.

Allowing the petition, the court held that in view of Section 11BB of the Central Excise Act, 1944, the company had a clear statutory right to interest on the delayed refund. The Bench held that since the appellate authorities had already ruled in favour of HVPNL, the department was bound by law to refund the amount within the stipulated time limit.

The court also made it clear that since the duty had been paid under protest and the final order was in favour of the company, the petitioner could not be burdened with the consequences of administrative delay.