1981 (3) TMI 91 - CGOVT - Central Excise

Summary

Issues:
1. Refund of excess Central Excise duty paid on levy sugar for the 1971-72 season.

Analysis:
The petitioners in this case charged higher prices for levy sugar than those fixed by the Government for the 1971-72 season. The Allahabad High Court ordered the petitioners to refund the excess prices realized to the buyers. The petitioners then sought a refund of the excess Central Excise duty paid on the levy sugar. The Asstt. Collector rejected the claim, stating that the consumers who paid the excess amount would not benefit from the refund. The Appellate Collector upheld this decision, noting the lack of evidence showing that the excess prices had been refunded and that the High Court order did not mandate a refund of excise duty.

The petitioners argued in their Revision Application that the Asstt. Collector erred in considering the consumers as the aggrieved party, as per the High Court judgment. They contended that the supplies were made to Government nominees, who had lodged refund claims with the petitioners. They also disputed the Appellate Collector's view that the sugar was treated as free sale sugar, emphasizing that it remained levy sugar supplied only to Government nominees. Additionally, they claimed eligibility for a refund from the Central Excise Department since they had paid the differential excise duty.

During the personal hearing, the petitioners' Counsel affirmed their commitment to refund the excess duty to the buyers and cited a similar case where the High Court directed the Central Excise Department to refund the amount. The petitioners undertook to provide evidence of their commitment within two months. Subsequently, they informed the Ministry of Agriculture about the refund claim, requesting approval to deposit the amount into the Levy Sugar Price Equalisation Fund.

The Government referenced legal precedents, including a Supreme Court ruling and an Allahabad High Court judgment, which supported the transfer of excess amounts collected by sugar mills to the Levy Sugar Price Equalisation Fund. Based on this legal position, the Government decided that the excess excise duty should not be refunded to the petitioners but deposited into the Equalisation Fund to reimburse consumers who had paid excess amounts.

Consequently, the Government rejected the revision application and directed the Collector, Central Excise, Meerut, to take necessary action in accordance with the Levy Sugar Price Equalisation Fund Act, 1976.