TMI Blog2016 (6) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... d by way of mistake is neither a duty of excise nor is it Crude Oil Cess to which the provisions of the OID Act apply, and consequently, the machinery provisions under the Central Excise Act, 1944 would not apply to refund of such amount. - Refund allowed - Decided in favor of petitioner. Interest on delayed refund - Held that:- Insofar as the claim of interest is concerned, the amount admittedly had been paid by the petitioner by way of a mistake. The position of law in this regard was not clear and hence, no fault can be found in the approach of the revenue authorities in retaining such amounts till the time the Circular dated 07.01.2014 came to be issued, clarifying the issue. It has been held hereinabove, that the amount in question is not in the nature of a duty of excise and hence the provisions of the Central Excise Act for refund would not be applicable. Consequently, the provisions of section 11BB of the Central Excise Act, which provides for interest on delayed refund, would also not be applicable. It is settled legal position that in the absence of a statutory provision entitling the assessee to interest, a mandamus cannot be issued to the revenue to pay interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inistry of Finance. It is the case of the petitioner that it paid Primary Education Cess (hereinafter referred to as the Education Cess ) and Secondary and Higher Secondary Education Cess on Crude Oil Cess for the aforesaid period amounting to ₹ 73,60,061/-. The Central Board of Direct Taxes issued a circular dated 07.01.2014 clarifying that the Education Cess and Secondary and Higher Secondary Education Cess are not to be calculated on cesses which are levied under the Acts administered by Department/Ministries other than Ministry of Finance (Department of Revenue) in terms of those Acts. In view of the above, the petitioner filed a letter dated 17.07.2014 requesting for refund of the amount of ₹ 73,60,061/- of Education Cess and Secondary and Higher Secondary Education Cess inadvertently paid by it for the aforesaid period in terms of the circular dated 07.01.2014. As per the understanding of the petitioner, its refund claim was sent to the concerned Range Superintendent vide letter dated 22.07.2014, who by letter dated 08.08.2014 and 16.09.2014, submitted his verification report with the recommendation of rejection of refund claim. In view of the above, a show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roneous and bad in law. It was submitted that the second respondent has invoked the provisions of section 11B of the CE Act which is not applicable in the facts of the present case. It was submitted that the impugned order passed by the second respondent suffers from a fallacy, inasmuch as, the crude oil cess is not a central excise duty. Elaborating upon the said submission, it was submitted that as per section 15(1) of the OID Act, there shall be levied and collected, as a cess, for the purpose of the OID Act, on every specified item which is produced in India and removed to a refinery or factory or transferred by the person by whom such item is produced to another person, a duty of excise at a specified rate. It was pointed out that the levy of duty of excise as a cess on removal or transfer of crude oil is provided under the OID Act which is administered by the Ministry of Petroleum and Natural Gas, Government of India. Also, the power to levy cess on crude oil is with the Ministry of Petroleum and Natural Gas and not with Ministry of Finance. It was submitted that the cess on crude oil is neither levied under the Central Excise Act, nor by the Ministry of Finance, Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the sugar cess imposed under the provisions of the Cess Act assume the characteristic of central excise duty so as to warrant calculation of education cess on the amount of cess so collected. The court held that the sugar cess levied and collected cannot be equated with duty of central excise and therefore, cannot be treated to be part and parcel of the amount on which the education cess has to be calculated. It was submitted that the above decision was squarely applicable to the facts of the present case and that the second respondent, in gross violation of the judicial discipline, has ignored the said order. 3.3 It was submitted that the fact that the education cess is not leviable upon the crude oil cess as the same is not the duty of excise, though collected by the Department of Revenue, has also been stated by the CBEC in its circulars dated 10.08.2004 as well as 17.01.2014. It was submitted that the above circulars are binding upon the second respondent and hence, the second respondent has erred in not following the departmental clarifications. It was submitted that when the Department itself considers the crude oil cess as a cess which is different from the centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the facts of the present case, the question of unjust enrichment, limitation etc. shall not apply for the purpose of claiming refund of the Education Cess and Secondary and Higher Secondary Education Cess. 3.5 The attention of the court was invited to paragraph 4.8(vi) of the affidavit-in-reply filed on behalf of the second respondent, wherein, it has been stated thus: [vi] Further the conference of the all Chief Commissioner was held in Bangalore on 26th and 27th Nov.2014 and the instant issue was discussed whether the Education cess and SHE cess on Oil cess is payable or otherwise. The minutes of the meeting of the said conference has been circulated vide F.No.96/79/2014- CX1(Pt.11) dated 09.02.2015 wherein it is admitted at point No.1-9 of Annexure-A (page.08) that the Oil Cess is administered under Act administered by different ministries, it was further clarified that no cesses are leviable on oil cess. In light of this clarification, the instant issue may be considered as settled and no further demand notices may be required to be issued and decision for pending issues may be decided accordingly. It was submitted that refund claimed under section 11B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hindustan Copper Ltd. , (1998) 9 SCC 708 . It was, accordingly, urged that the impugned order being contrary to the statutory provisions and therefore, bad in law, deserves to be quashed and set aside and that the petition deserves to be allowed by directing the respondents to forthwith sanction and grant the petitioner refund of ₹ 73,60,061/- as sought for vide application dated 21.07.2014. 4. Vehemently opposing the petition, Mr. R. J. Oza, Senior Advocate and learned Senior Standing Counsel for the respondents, invited the attention of the court to the reliefs prayed for in the petition, to point out that what is subject matter of challenge before this court is the order-in-original passed by the adjudicating authority. It was submitted that all the contentions advanced before this court have been raised before the adjudicating authority, who has recorded a finding on each contention. It was submitted that since the adjudicating authority has recorded findings on all the points that are raised by the petitioner before this court, this court should not exercise writ jurisdiction and render an opinion on the correctness of the order of the adjudicating authority. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Central Excise Act, the doctrine can be invoked to deny the benefit to which a person is not otherwise entitled. The court was of the view that section 11B of the Central Excise Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in the absence of a statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the petitioner-appellant to show that he has paid the amount for which relief is sought, he has not passed on the burden on consumers and if such relief is not granted, he would suffer loss. It was submitted that for the purpose of examining whether or not there was unjust enrichment, this court would have to enter into disputed questions of fact, which it would not entertain in exercise of its writ jurisdiction. 4.2 It was further submitted that the claim of the petitioner is barred by limitation, inasmuch as, section 11B of the Central Excise Act provides for a limitation of one year from the date of payment of such amount. It was submitted that in the facts of the present case, the claim relates to the period July 2004 to April 2014 and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2014 before the pending assessment is finalized. Accordingly, for claiming any refund for the period from July 2004 to April 2014, on the basis of the CBEC circular dated 07.01.2014, the essential pre-condition is to first finalize the pending assessment, only then the question of any refund would arise. In the facts of the present case, the petitioner had already made self-assessment and paid the duty under rule 6 of the Central Excise Rules, 2002 for the period July 2004 to April 2014, which is deemed to be final assessment. For the purpose of claiming any refund on the basis of CBEC circular dated 07.01.2014, assessment is required to be pending, whereas in the present case, self-assessment is deemed to be final assessment and hence, the second respondent was justified in rejecting the claim made by the petitioner. 4.4 Reliance was also placed upon the decision of the Supreme Court in the case of Suganmal v. State of M. P., AIR 1965 SC 1740 , for the proposition that though the High Courts have power to pass any appropriate order in the exercise of the powers conferred under Article 226 of the Constitution, such a petition solely praying for the issue of a writ of mand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . State of M. P . (supra), it was submitted that the facts of the present case are distinguishable from the facts of the said case and that the petitioner does not have any remedy except under Article 226 of the Constitution of India. It was submitted that under section 35 of the Central Excise Act, a decision rendered by the authority has to be under that Act, whereas in the facts of the present case, the dispute does not relate to any decision under the provisions of the CE Act and hence, the remedy under section 35 of the CE Act, cannot be said to be an efficacious alternative remedy. 5.1 On the question of the claim of the petitioner being barred by limitation, the learned counsel placed reliance upon the decision of the Supreme Court in the case of Dehri Rohtas Light Rly. Co. Ltd. v. District Board, Bhojpur , (1992) 2 SCC 598, wherein, the court held that the rule which says that the court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Delhi High Court in the case of Hind Agro Industries Limited v. Commissioner of Customs, 2008 (221) ELT 336 (Del.), for the proposition that the custom authorities were bound to refund the cess erroneously paid under a mistake of law. The court noted that the appellant therein had paid the cess when in fact no such cess was payable and as such there was no question of processing a claim of refund of such amount in terms of the Customs Act at all because the payment made mistakenly was not under that Act. The court, accordingly, held that the period of limitation under section 27 of the Customs Act would not apply and that the applications for refund having been made well within the period of three years after discovery of mistake by the appellants therein, were not barred by limitation. It was submitted that the above decision would be squarely applicable to the facts of the present case. 5.5 Reliance was also placed upon the decision of this court in the case of Swastik Sanitarywares Ltd. v. Union of India, 2013 (296) ELT 321 (Guj.) , wherein the court found that the second deposit of the same amount on clearance of the same goods did not amount to deposit of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent has not passed on the duty to any consumer of the final product, viz., copper, manufactured by the respondent. The court found no reason to doubt the correctness of the aforesaid statement contained in the said affidavit and held that no case was made out for interference with the direction issued by the High Court regarding refund of excise duty paid by the respondent on import of rectified spirit used in the manufacture of copper. 5.7 On the question of existence of an alternative remedy, the learned counsel placed reliance upon the decision of the Kerala High Court in the case of Geojit BNP Paribas Financial Services Ltd. v. C.C.E., Customs Sales Tax, Kochi , 2015 (39) STR 706 (Ker) , wherein the court held that the question of alternative remedy would arise if service tax is otherwise leviable under the Central Excise Act. The court found that in the facts of that case, there was no dispute with regard to the fact that no service tax was leviable for the services extended by the petitioner to the Muskat Bank. The court held that the writ petition is maintainable when the amount is arbitrarily withheld without any justification in law as the refund claimed by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above clarification, it realised that it has been erroneously paying Education Cess without there being any such liability on its part. Having realised the mistake, the petitioner moved the application for refund of the amount paid under mistake. 7.2 Insofar as the case of the petitioner that it had paid the amount under a mistake of law is concerned, the say of the petitioner appears to be credible inasmuch as no assessee would continue paying a tax for years together if it had any reason to believe that it was not liable to pay the same. On a plain reading of the circular dated 7th January, 2014, it is evident that the issue was not free from doubt and, therefore, representations were made by the trade as well as field formations, pursuant to which such doubt was cleared. Since Oil Cess is not administered by the Department of Revenue, the petitioner came to know that it was not required to pay Education Cess and Secondary and Higher Secondary Education Cess only when the position was clarified by the above circular and upon realising its mistake made the application for refund. 8. Since the adjudicating authority has held that the circular dated 07.01.2014 would not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and Secondary and Higher Secondary Education Cess under the provisions of Finance Acts, 2004 and 2007 respectively, and that the circular dated 07.01.2014 is not applicable to the facts of the present case. 8.3 Insofar as the finding that the Oil Cess is nothing but excise duty is concerned, it may be germane to refer to the decision of this court in the case of Commissioner v. Sahakari Khand Udyog Mandli Ltd . (supra) wherein the court in the context of the Sugar Cess Act, 1982, which contains provisions similar to the provisions of the OID Act has held thus: 5. Sections 3 and 4 of the Cess Act read as under: SECTION 3 : Imposition of cess : - There shall be levied and collected as a cess, for the purposes of the Sugar Development Fund Act, 1982, a duty of excise on all sugar produced by any sugar factory in India, at such rate not exceeding [twenty five rupees] per quintal of sugar, as the Central Government may, by notification in the Official Gazette, specify from time to time. (2) The duty of excise levied under sub-section (1) shall be in addition to the duty of excise leviable on sugar under the Central Excise Act, 1944 (1 of 1944), or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pting this legislative procedure, the legislature has used a well known legislative tool, but from the said exercise, it cannot be inferred or stated that the sugar cess imposed under the provisions of the Cess Act assume the characteristic of central excise duty so as to warrant calculation of education cess on the amount of cess so collected. 8. Section 4 of the Cess Act is again an inherent indicator when it provides that the proceeds of the duty of excise levied under Section 3 (sugar cess) shall be credited to the Consolidated Fund of India. For the purposes of utilization of the said fund, one has to consider provisions of Sugar Development Fund Act, 1982 simultaneously to ascertain as to whether the sugar cess is in fact and in law only a cess or is a duty of central excise. 9. Under the Sugar Development Fund Act, 1982, `fund means sugar development fund formed under Section 3 of the said Act, Under sub-section (2) of Section 3 of the Sugar Development Fund Act, 1982, it is provided that an amount equivalent to the cess collected under the Cess Act, reduced by the cost of collection, together with any moneys received by the Central Government for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such item is produced, and in the case of crude oil, the duty of excise shall be collected on the quantity received in a refinery. (3) The duties of excise under sub-section (1) on the items specified in the Schedule shall be in addition to any cess or duty leviable on those items under any other law for the time being in force. (4) The provisions of the Central Excises and Salt Act, 1944 (1 of 1944), and the rules made thereunder, including those relating to refunds and exemptions from duties shall, as far as may be, apply in relation to the levy and collection of duties of excise leviable under this section and for this purpose the provisions of that Act shall have effect if that Act provided for the levy of duties of excise on all items specified in the Schedule. 16. Crediting of proceeds of duty to Consolidated Fund of India .-The proceeds of the duties of excise levied under Section 15 shall first be credited to the Consolidated Fund of India and the Central Government may, if Parliament by appropriation made by law in this behalf, so provides, pay to the Board from time to time, from out of such proceeds, after deducting the expenses of collection, such s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is administered by different Department are not chargeable to Education Cess and Secondary and Higher Secondary Education Cess chargeable under the provisions of the Finance Acts, 2004 and 2007 respectively. 10. What is subject matter of challenge in the present petition, is the order passed by the adjudicating authority rejecting the application made by the petitioner seeking refund of the Education Cess Secondary and Higher Secondary Education Cess erroneously paid by it, and hence, the next question that arises for consideration is as to whether the petitioner was liable to pay Education Cess and Secondary and Higher Secondary Education Cess. Education Cess has been levied under section 93 of the Finance Act 2004 and Secondary and Higher Secondary Education Cess has been levied under section 138 of the Finance Act, 2007. It would, therefore, be germane to refer to the said provisions, which read as under: 93. Education Cess on excisable goods .-(1) The Education Cess levied under Section 91, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w for the time being in force and the Education Cess chargeable under Section 93 of the Finance (No. 2) Act, 2004 (23 of 2004). (3) The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Secondary and Higher Education Cess on excisable goods as they apply in relation to the levy and collection of the duties of excise on such goods under the Central Excise Act, 1944 or the rules made thereunder, as the case may be. 10.1 On a plain reading of section 93, it is clear that the Education Cess levied under the Finance Act, 2004 is a duty of excise levied at the rate of two percent, calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess, and Secondary and Higher Secondary Education Cess levied under section 136 of the Finance Act, 2007 on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act, 1944 have been incorporated in the OID Act and consequently the Education Cess and Secondary and Higher Secondary Education Cess had been paid to the Central Excise authorities, the petitioner was wholly justified in making the application for the refund to the second respondent. However, merely because the application is made to an authority under the Central Excise Act, the same would not lead to an inference that the application has been made under the provisions of the Central Excise Act, 1944 so as to make the provisions of appeal, etc. applicable. In the present case, there was no liability to pay Education Cess or Secondary and Higher Secondary Education Cess on the part of the petitioner. Under section 93 of the Finance Act, 2004 and section 138 of the Finance Act, 2007, Education Cess and Secondary and Higher Secondary Education Cess levied thereunder are treated as duties of excise. The petitioner having paid Education Cess and Secondary and Higher Secondary Education Cess under a mistake of law without there being any liability on the part of the petitioner to pay such amount, the amount paid by the petitioner would not take the colour of a duty of excise and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such cases claims for refund had to be preferred under, and in accordance with, the provisions of the respective enactments before the authorities specified and within the period of limitation prescribed therein. Hence it was held that petition under Article 226 of the Constitution could not be entertained having regard to the legislative intention evidenced by the provisions of the said Act and the writ petition, if any, would be considered and disposed of in the light of and in accordance with the provisions of Section 11-B of the Central Excises and Salt Act, 1944 stating that power under Article 226 has to be exercised to effectuate the rule of law and not to abrogate it. In the present cases there is no corresponding section to Section 11-B of the Central Excises and Salt Act, 1944 for making claim for refund of money and, therefore, the respondents could maintain the writ petitions under Article 226 of the Constitution. Further in para 108( i i ) of the judgment it is held that where, however, a refund is claimed on the ground that the provisions of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove . However, it must not be understood that in all cases where collection of cess, levy or tax is held to be unconstitutional or invalid, the refund should necessarily follow. We wish to add that even in cases where collection of cess, levy or tax is held to be unconstitutional or invalid, refund is not an automatic consequence but may be refused on several grounds depending on facts and circumstances of a given case. [Emphasis supplied] 11.2 Reference may also be made to the decision of the Delhi High Court in Hind Agro Industries Limited v. Commissioner of Customs, 2008 (221) ELT 336 Del, wherein it has been held thus : 10. There can be no doubt that the above provision applies to a claim for refund of any duty within the meaning of that Act. A word duty has been defined under Section 2(15) of the Act means, a duty of customs leviable under this Act. The entire Section 27 of the Act can, therefore, obviously apply if and only if, the refund that is being sought is of customs duty otherwise leviable under the Act. 13. It is clear that in Mafatlal Industries the Hon ble Supreme Court had only talked of refund of duty payable within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.3 In the light of the principles enunciated in the above decisions, having regard to the fact that in the facts of the present case, the refund is claimed on the ground that the amount was paid under a mistake of law and such claim being outside the purview of the enactment, can be made either by way of a suit or by way of a writ petition. Under the circumstances, the petitioner is justified in filing the present petition before this court against the order passed by the adjudicating authority rejecting its claim for refund of the amount paid under a mistake. 12. Since it has been contended on behalf of the revenue that the application for refund ought to have been made under section 11B of the Central Excise Act, 1944, reference may be made to the said section which reads thus: 11-B. Claim for refund of duty.- (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of suit or by way of writ petition. In the present case, though the provision under which the amount was paid was not declared unconstitutional, it has been declared that the same applies only in cases where the duty is both, administered and collected, by the Department of Revenue, whereas in the present case, the Oil Cess, though collected by the Department of Revenue is administered by the Ministry of Petroleum and Natural Gas. The petitioner was therefore, wholly justified in making the application for refund under a mistake of law and not under section 11B of the Central Excise Act, 1944. 13. The next question that needs to be addressed is the aspect of limitation. The refund application has been made in July 2014 seeking refund of the amount paid for the period July, 2004 to April 2014. On behalf of the revenue it has been contended that in view of the provisions of section 11B of the CE Act, the limitation for filing the refund claim would be before the expiry of one year from the relevant date. The expression relevant date is defined under clause (B) of the Explanation to section 11B of CE Act and insofar as the present case is concerned would be the date of payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay as inordinate. In our view, the High Court failed to appreciate all material facts particularly the fact that the demand is illegal as already declared by it in the earlier case. 13. The rule which says that the Court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principle on which the relief to the party on the grounds of laches or delay is denied is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the writ court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence . The test is not as to physical running of time. Where the circumstances justifying the conduct exist, the illegality which is manifest cannot be sustained on the sole ground of lache ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in case of C.C. Patel Associates Pvt. Ltd. (supra), this court had occasion to deal with somewhat similar situation where the petitioner had deposited service tax twice which was not being refunded by the Department. In that context, it was observed as under:- (12) We fail to see how the department can withhold such refund. We say so for several reasons. Firstly, we notice that under sub-section(3) of section 68, the time available to a service provider such as the petitioner for depositing with the Government service tax though not collected from the service recipient was 75 days from the end of the month when such service was provided. This is in contrast to the duty to be deposited by a service provider upon actual collection by the 15th of the month following the end of the month when such duty is collected. Sub-section (3) of section 68 thus provided for an outer limit of 75 days, but never provided that the same cannot be paid by the 15th of the month following the end of the month when such service was provided. Thus, if the petitioner deposited such duty with the Government during a particular quarter on the basis of billing without actual collection, he had dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that where a petitioner approached the High Court with the sole prayer of claiming refund of money by writ of mandamus, the same was normally not granted but where the refund was prayed as a consequential relief the same was normally entertained if there was no obstruction or if there was no triable issue like that of limitation. We agree that normally in a case where tax or money has been realised without the authority of law, the same should be refunded and in an application under Article 226 of the Constitution the court has power to direct the refund unless there have been avoidable laches on the part of the petitioner which indicate either the abandonment of his claims or which is of such nature for which there is no probable explanation or which will cause any injury either to respondent or any third party . It is true that in some cases the period of three years is normally taken as a period beyond which the court should not grant relief but that is not an inflexible rule. It depends upon the facts of each case. In this case, however, the High Court refused to grant the relief on the ground that when the section was declared ultra vires originally that was the time when r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay in filing the petition. The High Court rejected all the contentions of the appellant and a writ of mandamus was issued as prayed for. It was held that tax was violative under Article 301 of the Constitution. But it was held that even though the tax contravened Article 301 of the Constitution, it was valid if it came within the saving provisions of Article 304 of the Constitution. Tobacco manufactured or produced in the appellant State, similar to the tobacco imported from outside had not been subjected to the tax and therefore the tax was not within the saving provisions of Article 304(a) of the Constitution. It was reiterated that the tax which had already been paid was so paid under a mistake of law under Section 72 of the Indian Contract Act. The High Courts had power for the purpose of enforcement of fundamental rights and statutory rights to grant consequential reliefs by ordering repayment of money realised by the government without the authority of law. It was reiterated that as a general rule if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by the extraordinary remedy of mandamus. Even if there is no such delay, in cases w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trade and field formations, the CBEC was required to issue the circular dated 07.01.2014 clarifying the issue. As noticed earlier, the petitioner had all along, right from July 2004 been paying Education Cess and subsequently, from the year 2007 was paying Secondary and Higher Secondary Education Cess, till April 2014. It was only when the Circular dated 07.01.2014 came to be issued by the CBEC, clarifying the issue, that the petitioner came to know about its mistake. Considering the nature of the mistake and the fact that the issue was not free from doubt till the above circular came to be issued by the CBEC, it also cannot be said that the petitioner could with reasonable diligence have discovered the mistake. It appears that it is only sometime after the Education Cess and Secondary and Higher Secondary Education Cess came to be paid for the month of April 2014 that the petitioner came to know about its mistake and in July 2014, it filed the application for refund before the second respondent. Since the period of limitation begins to run only from the time when the applicant comes to know of the mistake, the application made by the petitioner was well within the prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of a mistake. As regards the contention that the self assessment having become final, it is not open for the petitioner to claim refund, the adjudicating authority, in the impugned order has held thus: No refund claim can be filed directly on the basis of CBEC Circular dated 07.01.2014, before the pending assessment is finalised. Accordingly, for claiming any refund for the period from July, 2004 to April 2014, on the basis of CBEC circular dated 7.1.2014, the essential precondition is to first finalise the pending assessment, only then the question of any refund would arise. On verification of records, it is observed that the claimant has already self-assessed and paid the duty under rule 6 of the CER 2002 for the period July 2004 to April 2014 which is deemed to be final assessment. Hence the question of finalisation of the same does not arise. For the purpose of claiming any refund on the basis of CBEC circular the assessment is supposed to be pending whereas in the present case the self assessment is deemed to be final assessment and hence the claim even on merits is not admissible. 15.2 Essentially, therefore, the case of the respondents is that self assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulating the refund. Similarly, if he has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of income tax, or is not income within the contemplation of law, he may likewise bring this to the notice of the Assessing Authority, which if satisfied, may grant him relief and refund the tax paid in excess, if any. Such matters can be brought to the notice of the authority concerned in a case when refund is due and payable, and the authority concerned, on being satisfied, shall grant appropriate relief. In cases governed by Section 240 of the Act, an obligation is cast upon the Revenue to refund the amount to the assessee without his having to make any claim in that behalf. In appropriate cases therefore, it is open to the assessee to bring facts to the notice of the authority concerned on the basis of the return furnished, which may have a bearing on the quantum of the refund, such as those the assessee could have urged under Section 237 of the Act. The authority concerned, for the limited purpose of calculating the amount to be refunded under Section 240 of the Act, may take all such facts into consideration and calcul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of self assessment and no assessment order has been passed thereon. 15.4 Reference may also be made at this stage to the decision of this court in the case of Alstom India Ltd. v. Union of India , 2014 (301) ELT 446 (Guj), on which reliance has been placed by the learned counsel for the petitioner, wherein it has been held as follows: 11. It is now well-settled law that a citizen, even after making payment of tax on demand by either misinterpretation of the statutory provision or under unconstitutional provision or under mistake of law, can subsequently challenge the inherent lack of jurisdiction on the part of the said State authority to demand tax, and if such a citizen succeeds, the Court can, in an appropriate case, direct refund of the amount which had been collected by the state authority having no jurisdiction. There are instances where after payment of tax by an assessee, on his prayer, the provisions of imposition of tax has been held ultra vires the Constitution of India and in such a case, the subsequent proceedings for annulment of the proceedings under which the tax was collected cannot be dismissed on the sole ground of payment of tax by the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the adjudicating authority has recorded thus: 19.19 The claimant vide letter F. No.JTI/2014- 15/Excise/416 dated 20.11.2014 (received in the office on 21.11.2014)has also submitted a certificate dated 20.11.2014 signed by N. M. Bhalerao, Senior Finance Manager of M/s Indian Oil Corporation Ltd. (IOCL) to an effect that M/s Indian Oil Corporation Limited (the buyer of crude oil from Dholka and Wavel Fields) do hereby confirm that they have not paid the amount of Primary education Cess and Secondary Higher Education Cess on OID Cess to JTI on purchase of crude oil from them . Further, it is mentioned in the said certificate that this certificate has been issued on the request of JTI for onward submission to the concerned Central Excise Authorities, in support of refund claim of Primary Education Cess and Secondary Higher Education Cess on OID Cess. This certificate should not be used other than the intended purpose, without obtaining written permission from them . This certificate has been issued by the customer (M/s IOCL), on the request of the claimant and it has been mentioned that it should not be used anywhere else, without their prior written permission. Hence, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d respondent has chosen not to rely on the certificate of the Chartered Accountant produced by the petitioner, it is evident that the petitioner was not given any further opportunity to produce documents to substantiate the correctness of the said certificate, on the 3rd respondent entertaining a doubt regarding the correctness of the said certificate. I am of the view that if the 3rd respondent had any doubt regarding either the genuineness of the certificate or the correctness of the contents therein, it should have informed the petitioner of the same and given the petitioner an opportunity of producing additional documents to substantiate his claim for refund. That procedure not having been adopted by the 3rd respondent, I am of the view that Ext. P10 order passed by him cannot be legally sustained. Resultantly, I quash Ext. P10 order of the 3rd respondent and direct him to consider the matter afresh after affording the petitioner an opportunity of being heard. It will be open to the petitioner to produce supporting materials to substantiate his claim for refund and in particular to establish that by the grant of refund to him, he will not be unjustly enriched. The 3rd responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er form or through any other mode. It is also the case of the petitioner that the sales price of crude oil is derived independently based on price of Dubai crude oil price per barrel as published in Platt Oil Gram. The sales price does not have any nexus with the associated costs and statutory levies, taxes and duties. The petitioner has submitted copies of the Crude Offtake and Sales Agreement as well as the Production Sharing Contract. A perusal of the production sharing contract shows that the contract is by and between the Ministry of Petroleum and Natural Gas, Government of India and Larsen Toubro Limited and the Petitioner Joshi Technologies International Inc. and not with the IOCL. Hence reference to clause 15 thereof by the adjudicating authority is misconceived. Insofar as IOCL is concerned there is a Crude Offtake and Sales Agreement and the price at which crude oil is sold is in terms of Article 13 thereof, which is the price clause. For the sake of convenience Article 13 is reproduced hereunder. ARTICLE 13 PRICE: [13.1] Initially the contractor shall be paid by IOC a provisional price based on calendar month average FOB selling price for Dubai crude oil per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that no Crude Oil Cess is payable by the purchaser is further supported by the certificate of the Chartered Accountant based on the petitioner s invoices and also on the contractual clauses contained in the Crude Offtake and Sales Agreement as well as a copy of a letter dated 29th July, 2015 issued by Shri N.M. Bhalerao, Chief Finance Manager, IOCL, wherein the certificate dated 20th November, 2014, issued earlier by IOCL has been explained and it has been stated that the price paid to the petitioner by IOCL was solely dependent upon the daily mean values of high and low quotations of Brent under the heading viz. Spot Crude Oil Assessment in Platts Crude Oil Marketware and the same has no connection with Indian taxes. It is further stated therein that since, price paid for crude purchased by them from the petitioner is fixed solely on the basis of the international price of crude as traded in the international market and the burden of cess and royalty payable to Government of India is on the seller, they confirm that they have neither paid any cess, royalty over and above the price, nor paid any Education Cess and/or Secondary and Higher Education Cess on such OID Cess to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , from the certificate issued by the IOCL, it is evident that the IOCL which is the sole customer, has certified that it has not paid any Education Cess and/or Secondary and Higher Secondary Education Cess on the OID cess to the petitioner in view of the fact that the price paid for crude purchased by it from the petitioner is fixed solely on the basis of the international price of crude as traded in the international market and the burden of cess and royalty payable to Government of India is on the seller. In the impugned order, the adjudicating authority has brushed aside the certificate dated 20.11.2014 issued by the Senior Finance Manager of IOCL merely on the ground that such certificate was issued at the request of the claimant. As has rightly been stated in the above letter dated 29.07.2015, in the ordinary course, the petitioner would not be required to obtain such a certificate and it is only in the peculiar facts of the present case, where it is called upon to prove that it has not passed the incidence of the Education Cess and Secondary and Higher Secondary Education Cess paid by it to the buyer, that the petitioner was required to obtain such a certificate. Under the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. On behalf of the respondent, a contention has been raised as regards the very maintainability of the petition on the ground that there is an efficacious alternative remedy available under section 35 of the Central Excise Act. Since the very existence of an alternative statutory remedy was in dispute, and connected issues were required to be decided for the purpose of deciding this issue, instead of deciding the question of maintainability at the very outset, the same is being decided at this stage. It has been vehemently contended on behalf of the respondents that this petition is not maintainable and that the petitioner should be relegated to avail of the remedy of appeal under section 35 of the Central Excise Act, 1944. In support of such contention, reliance was placed upon the decision of the Supreme Court in CIT v. Chhabil Dass Agarwal, (supra): 11. Before discussing the fact proposition, we would notice the principle of law as laid down by this Court. It is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. 16 . In the instant case, the Act provides complete machinery for the assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The remedy under the statute, however, must be effective and not a mere formality with no substantial relief. In Ram and Shyam Co. v. State of Haryana, (1985) 3 SCC 267, this Court has noticed that if an appeal is from Caesar to Caesar s wife the existence of alternative remedy would be a mirage and an exercise in futility. 18.1 Reliance was also placed upon the decision of the Supreme Court in Suganmal v. State of M.P., AIR 1965 SC 1740 , wherein the court held thus: 6 . On the first point, we are of opinion that though the High Courts have power to pass any appropriate order in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach this court since the present case pertains to levy of Education Cess and Secondary and Higher Secondary Education Cess on Oil Cess, which is far removed from the scope of the Central Excise Act which pertains solely to the levy and collection of excise duty. Hence, there is no question of preferring any appeal to the Commissioner (Appeals) under section 35 of the CE Act, since the said authority is a functionary acting under the said Act and has no jurisdiction to entertain cases pertaining to levy of Education Cess and Secondary and Higher Secondary Education Cess on Oil Cess. Moreover, the levy itself being unconstitutional, the said challenge is beyond the scope of the jurisdiction of the Commissioner (Appeals) to decide under section 35 of the CE Act. In support of such submission reliance has been placed on the decision of this court in Panoli Intermediate India Pvt. Ltd. v. Union of India, 2015 (326) ELT 532 (Guj), wherein it has been held thus: (A) The petition under Article 226 of the Constitution can be preferred for challenging the order passed by the original adjudicating authority in following circumstances that - (A.1) The authority has passed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition is maintainable when the amount is arbitrarily withheld without any justification under law as the refund claimed by the petitioner is not relatable to Section 11B of the Central Excise Act. Similar view was also taken by the Karnataka High Court in K.V.R. Constructions v. Commissioner of Central Excise (Appeals) and Another [(2010) 28 VST 190 (Karn.) = 2010 (17) S.T.R. 6 (Kar.)] and by the Madras High Court in Natraj and Venkat Associates v. Asst. Commr. of S.T., Chennai-II [2010 (249) E.L.T. 337 (Mad.) = 2010 (17) S.T.R. 3 (Mad.)]. The above statement of law would also apply on all fours to the present case. 18.4 In the light of the above discussion, this court is of the view that the contention that the petition is not maintainable in view of there being an alternative statutory remedy of appeal available to the petitioner, does not merit acceptance. 19. Insofar as the claim of interest is concerned, the amount admittedly had been paid by the petitioner by way of a mistake. The position of law in this regard was not clear and hence, no fault can be found in the approach of the revenue authorities in retaining such amounts till the time the Circular da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be satisfied, viz., (i) that the duty of excise should be levied by the Central Government in the Ministry of Finance (Department of Revenue); and (ii) the duty of excise should be collected by the Central Government in the Ministry of Finance (Department of Revenue). In the present case, since the machinery provisions of the Central Excise Act, 1944 and the rules framed thereunder have been incorporated in the OID Act, the second condition precedent is satisfied, viz. that the cess is collected by the Central Government in the Ministry of Finance (Department of Revenue); however, the first condition with regard to levy of such duty of excise by the Central Government in the Ministry of Finance (Department of Revenue) is not satisfied inasmuch as the Oil Cess under the OID Act is levied by the Ministry of Petroleum and Natural Gas. In the aforesaid premises, the requirements of section 93 of the Finance Act, 2004 and section 138 of the Finance Act, 2007 are not satisfied in the present case, and consequently, the said provisions have no applicability to the facts of the present case. The petitioner, therefore, cannot be said to have been liable to pay Education Cess and Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity of law, in the light of the decision of this court in Swastik Sanitarywares Ltd. v. Union of India (supra) , the question of applying the limitation prescribed under section 11B of the CE Act would not arise. - Even in case where any amount is paid by way of self assessment, in the event any amount has been paid by mistake or through ignorance, it is always open to the assessee to bring it to the notice of the authority concerned and claim refund of the amount wrongly paid. The authority concerned is also duty bound to refund such amount as retention of such amount would be hit by Article 265 of the Constitution of India which mandates that no tax shall be levied or collected except by authority of law. Since the Education Cess and Secondary and Higher Secondary Education Cess collected from the petitioner is not backed by any authority of law, in view of the provisions of Article 265 of the Constitution, the respondents have no authority to retain the same. - If the adjudicating authority was not satisfied with the Chartered Accountant s certificate and the other material produced by the petitioner, he could have called upon the petitioner to produce further docu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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