TMI Blog1996 (3) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed period of six months as provided under Section 11B of the Central Excises Salt Act, 1944 (hereinafter referred to as the Act ). Re : Writ Petition No. 1656 of 1987. 2. The petitioners-Pfizer Limited-manufacture pharmaceuticals and bulk drugs liable to excise duty under Item 14E of the First Schedule to the said Act. In the manufacture of the said drugs, the Petitioners use guillotine capsules and rubber plugs, both liable to duty under the erstwhile Item 68 of the First Schedule to the Act. 3. In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 ('Rules', for short), the Central Government had issued a Notification, being Notification No. 201 of 1979 dated 4th June, 1979 (Exhibit A to the Petition) granting exemption to goods in which inputs classified under Item 68 of the First Schedule were used, from so much of the duty of excise as was equivalent to duty of excise on inputs, provided the conditions laid down and the procedure under the said Notification were followed. 4. The contention of the petitioners is that they had paid excise duty amounting to ₹ 1,01,48,300/- during the period from July, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t paid by way of duty to the extent of exemption was paid under a mistake of law thinking that the money paid was due when in fact it was not due. In support of this proposition, reliance has been placed by Mr. Rana on the following authorities :- (i) Shiba Prasad Singh v. Maharaja Srish Chandra Nandi 52 Bom. L.R., 17 . The relevant observations are at pages 20, 21, and 22. (ii) The Sales Tax Officer, Banaras Ors. v. Kanhaiya Lal Makund Lal Saraf, [1959]1 SCR 1350 . The relevant observations are at page 138, paragraph 10, to the effect that Section 72 of the Indian Contract Act does not make any distinction between a mistake of law or a mistake of fact. In paragraph 21 at page 140 of Report it is pointed out that Section of the Indian Contract Act included not only a mistake of fact but also a mistake of law. Reliance was also placed by Mr. Rana on the observations in paragraphs 26 and 27 at pages 142 and 143 of the Report. 9. Contention No. 2 : If the payment has been made under a mistake of law, then the assessee is entitled to the refund thereof irrespective of the internal or respective period of limitation prescribed by the statute under which the tax is pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give rise to another query : Pray, why did the Department collect duty without authority of law and in the teeth of the exemption Notification. Surely the Department was aware of the exemption Notification, and if not, was expected to be. The collection of this duty was manifestly illegal and without authority of law and must be refunded in a matter such as this. 14. Mr. Rele now takes refuge under the bogey of unjust enrichment on the ground that the burden has already been passed on to the consumer. None of this can be of assistance to the appellants. If this had been a case in reverse, and had the respondents been called upon to pay additional duty, could they have recovered it from their consumers after the sales were made ? Even Mr. Rele had to answer in the negative. Hence the dice must lie where they fall. (iv) Parle Beverages Pvt. Ltd. v. Union of India 1991 ECR 139(Bombay) . In this case the Court has observed that by catena of decisions it is settled that Department cannot retain excise duty recovered without any authority of law. For realisation of excise duty paid under mistake of law, the period of limitation set out under Section 11B is not attracted while g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of levy and, therefore, the question of unjust enrichment cannot and does not arise. In support of the above proposition, reliance was placed, firstly, on the Statement of Objects and Reasons relating to Central Excise and Customs Law (Amendment) Act, 1991 and it was contended that the provisions of Section 11B of the Central Excise Act are pari materia to the provisions of the amended Section 27 of the Customs Act. Similarly, it was pointed out that Section 12B of the Central Excise Act raising a presumption of passing on the full incidence of duty to the buyer of the goods is identical with the provisions of Section 28D of the Customs Act. 13. Having laid the above basis of similarity of provisions, reliance was placed on the decision of this Court in Solar Pesticides Pvt. Ltd. v. Union of India 1994 ECR 7 (Bom.) :1992 (27) E.L.T. 201 (Bom.) to contend that in respect of captive consumption, the question of unjust enrichment does not arise. In that case, what was sold was not the same goods as what was imported on which duty was paid. Imported copper scrap was not sold by the petitioners to anybody but was used for the manufacture of chemicals and what was sold was chemic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Hindustan Coco Products v. Union of India reported at 1994 ECR 662(Bombay) , particularly to the observations in paragraph 7 thereof. 17. Finally Mr. Rana placed reliance on the decision in the case of Ion Exchange (India) Ltd. v. Assistant Collector of Central Excise reported at 1993(66) E.L.T. 57(Bom) , to contend that the respondents are bound to refund the amount erroneously collected by them, irrespective of the period of limitation prescribed under Section 11B of the Act. 18. Having carefully considered the submissions of both the ld. Counsels in the light of the various decisions referred to above, we are of the view that the petitioners are not entitled to get refund as prayed for, mainly for the reasons stated below. 19. Re : Contention No. 1. With regard to Proposition No. 1 raised by the ld. Counsel for the petitioners that the amount paid by way of duty to the extent of exemption was paid under a mistake of law thinking that the money paid was due when in fact it was not due, in our view, this contention and the authorities upon which he has relied in support thereof are not required to be considered in the facts of the present case. As discussed above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturer of the said goods shall - (a) give prior notice to the proper officer before the excise duty paid inputs are received in his factory to enable the proper officer to be present at the time of the receipt of the inputs; (b) bring to the factory the inputs in original packing under the cover of gate pass or such other documents as may be approved in this behalf by the Central Board of Excise and Customs evidencing the payment of excise duty; (c) produce the inputs when brought to the factory before the proper officer to enable him to identify the inputs and verify the actual quantity thereof; and to maintain an account in the Forms mentioned therein. Various other conditions are also prescribed therein. 22. In our view, an assessee cannot say that even though he has not complied with the aforesaid conditions, still, however, because he came to known about the exemption Notification in the year 1986 he is entitled to get benefit of the said exemption Notification and the Respondents or their Officers should verify from the record which the petitioners have maintained in their office and grant refund of the amount of duty which is paid without any protest. In our v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on the ground that in some other case a different view was taken, even if the payment is made under mistake of law. As long as the order which became final stands, the authority cannot grant refund. The Court further held that if the application is under Section 27 of the Customs Act, then the authority, being a creation of the statute, must act within the ambit of that provision and if the application is delayed he has no alternative but to reject it as barred by limitation. 27. However, it is pointed out by the ld. Counsel for the petitioners that in the case of Miles India Ltd. v. Assistant Collector of Customs 1985 ECR 289 (SC) : ECR 750 SC : ECR 1094 SC :1987 (30) E.L.T. 641, the Supreme Court has observed that We accord them leave to withdraw the appeal but make it clear that the order of the Customs, Excise Gold (Control) Appellate Tribunal suffers from no infirmity. If really the payment of the duty was under a mistake of law, the appellant may seek recourse to such alternative remedy as it may be advised . Hence the petitioners submit that they have sought the remedy of filing this Petition. This aspect is clarified by the Supreme Court in the case of Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 11B, after its amendment, provides that any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date in a prescribed form supported by documentary and other evidence intended to establish that the amount of duty of excise in relation to which such refund is claimed was collected from or paid by him and the incidence of such duty has not been passed on by him to any other person. The first proviso to the sub-section lays down that where an application for refund has been made before the commencement of Act No. 40 of 1991 such application shall be deemed to have been made under the amended provisions and shall be dealt with in accordance with the provisions of sub-section (2) as amended. In the second proviso, it is stated that the limitation of six months shall not apply where such duty has been paid under protest. Sub-section (2) of Section 11B inter alia provides that the Assistant Collector of Central Excise while entertaining the claim for refund of duty may order the refund of the amount of duty paid by the claimant provided he had not passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Notification are complied with, but that he has followed the other procedural aspects of removing the goods under the supervision of the authority. After a lapse of five or ten years it is not possible for the authorities to verify whether the petitioners are entitled to get the benefit of the exemption Notification. Further, as stated above, issuance of an exemption Notification would not mean that excise duty is not leviable on the goods. It only means that if the assessee satisfies the conditions mentioned in the exemption Notification then he would be entitled to get the benefit thereof to the extent provided therein. In any case, this question is finally concluded by the Supreme Court in the case of Indian Aluminium Company Limited v. Thane Municipal Corpn. 1991 (55) E.L.T. 464 (SC), wherein the Supreme Court has held that a concession can be granted only if the raw-material is used in the industrial undertaking seeking such concession. For that a verification was necessary and that is why in the rule itself it is mentioned that a declaration has to be filed in Form 14 facilitating verification. Failure to file the same would automatically disentitle the assessee from cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Supreme Court in the case of Paros Electronics (P) Ltd. v. Union of India Anr. 1996(83) E.L.T. 261(SC) in the proceedings which emanated for levy of duty, the order became final and without having that order set aside by a competent Court there would be no question of grant of refund merely on the ground that in some other case a different view was taken, even if the payment is made under mistake of law. Further, as stated above, it cannot be said that the Respondents have recovered excise duty without any authority of law or without jurisdiction. 34. However, reliance is placed on the decision in the case of Indian Plastics Ltd. v. Union of India 1993(68) E.L.T. 308(Bom) , rendered by the Division Bench of this Court. In that case the Court has held that it is only the Excise authorities who had jurisdiction to decide whether a certain process amounts to manufacture and liable to payment of excise duty and the mere fact that the authorities constituted under the Act take an erroneous decision or the exercise of jurisdiction is irregular, that cannot lead to the conclusion that the orders passed were without jurisdiction and the recovery of duty was in breach of const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of 1984. 39. It is the contention of the petitioners, United Phosphorus Pvt. Ltd., that pursuant to the order dated 25th February, 1983, Shroff Industrial Chemicals Pvt. Ltd., was amalgamated with the Petitioner-Company. In this petition the petitioners seek refund of excise duty paid under mistake of law by contending that the petitioners' goods were wrongly classified under Tariff Item 14D and hence the petitioners were paying duty accordingly. By two Trade Notices dated 5th March, 1981 and 14th March, 1981 the Department has clarified that the goods manufactured by the petitioners were correctly classifiable under Tariff Item 68. Therefore, the petitioners wrote to the Department on 5th September, 1981 claiming a refund of ₹ 4,48,630.45 for the period from 25th November, 1977 to 8th September, 1980, being the excessive excise duty paid under Tariff Item 14D. Their application was rejected by the Assistant Collector of Central Excise by his order dated 31st December, 1981 on the ground that it was filed beyond the period of six months. The petitioners' appeal to the Collector of Central Excise (Appeals) was also dismissed on 21st June, 1984. Hence the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly allowed by order dated 12th December, 1986 by holding that the petitioners were entitled to have refund for a period of six months immediately preceding the date on which the claim was filed. The said orders are challenged in this Petition. 44. In our view, for the reasons recorded above in Writ Petition No. 1656 of 1987, this Petition is also required to be dismissed. An order classifying the goods manufactured by the petitioners under a particular Tariff Item would not be a ground for holding that the said order is without jurisdiction. If the petitioners were aggrieved by the said order of classification it was open to them to challenge the same by following the procedure prescribed under the Act. On the contrary, the petitioners have accepted it and paid duty accordingly. [Re : Paros Electronics (P) Ltd. (supra)]. 45. Hence, this Petition is dismissed. Rule is discharged with costs. Writ Petition No. 3841 of 1987. 46. This petition is filed by the Bombay Miscellanies Pvt. Ltd. challenging orders dated 10th October, 1984 and 22nd December, 1984 passed by the Assistant Collector of Central Excise and orders dated 20th March, 1987 and 24th August, 1987 passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1987. The petitioners contended that an amount of ₹ 9,14,704/- is wrongly recovered by the Respondents. It is to be noted that in the Petition itself nowhere it is stated as to when the petitioners came to know about the judgment in Raman Kantilal Bhandari's case (supra). 51. When this Petition came up for admission, objection was raised that the purchasers' Petition for refund was not maintainable. So, at that time, on behalf of original Respondent No. 4-assessee (present Petitioner No. 3), it was stated that Respondent No. 4 has no objection to the amount being paid to the 1st petitioner. By an Order dated 1st October, 1987 this Court directed that Respondent No. 4 be transposed as Petitioner No. 3 in the Petition. The Court also directed that Respondent Nos. 1 and 2 shall treat the Petition as an application filed by the 4th Respondent for refund within the meaning of the Act and shall dispose of the application within a period of three weeks from the date of that order. 52. Subsequently, on 20th October, 1987 the Assistant Collector of Central Excise, by order dated 20th October, 1987, rejected the application holding that no protest was lodged at any time b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Union of India (supra) has held that Tariff Item 68 excludes payment of duty on every kind of alcohol and the item imported being one of alcohol the recovery of duty is without authority of law and, therefore, the entire amount of duty recovered by the Respondents from 7th July, 1980 to 7th February, 1984 should be refunded. 57. In our view, this Petition also is required to be rejected on the same grounds which we have recorded above. The classification list submitted by petitioner No. 3 was previously approved. On that basis petitioner No. 3 went on paying excise duty. Subsequently Petitioner No. 3 submitted fresh classification list in the month of March, 1983. That was adjudicated and approved only in February, 1984. Hence from that date petitioner No. 3 was not required to pay any excise duty. If Petitioner No. 3 was aggrieved by the previous order of classification they ought to have challenged the same either by filing an appeal or a Writ Petition. Hence the petitioners are not entitled to get refund of any amount which they have paid on the basis of the classification order which remained in force till February, 1984. 58. In this petition, by an order dated 29th Oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund of an amount of ₹ 5,43,106/-. 63. As in the case of Writ Petition No. 3056 of 1987, in this case also on the basis of an order dated 29th October, 1987, the Respondents have deposited in this Court an amount of ₹ 5,43,106/- and Petitioner No. 1 has withdrawn an amount of ₹ 4,67,940/- on furnishing a Bank Guarantee. 64. For the reasons recorded in Writ Petition No. 3056 of 1987, this petition is also required to be dismissed. 65. Hence, Petitioner No. 1 is directed to deposit in this Court on or before 1st May, 1996 the amount withdrawn by it with interest thereon at 12% per annum from the date of its withdrawal from this Court. If Petitioner No. 1 fails to deposit the said amount within the stipulated time, the Prothonotary and Senior Master is directed to encash the Bank Guarantee and pay the said amount to the Respondents. It is also directed that with regard to the interest, further orders will be passed if Petitioner No. 1 fails to deposit the said amount within the stipulated time. It is also ordered that on such deposit being made by Petitioner No. 1, it would be open to the Respondents to withdraw the said amount along with any other amount ly ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
