TMI Blog1981 (7) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... J 177) = AIR 1973 Supreme Court 225, holding that on a true construction of the Central Excises and Salt Act, 1944, the assessable value of manufactured products was to be ascertained on the basis of manufacturing costs, excluding from the sale price all post-manufacturing expenses and profits attributable to post-manufacturing operations. This view was confirmed by the Supreme Court in its later decision delivered in February 1975 in Atic Industries Ltd. v. H.H. Dave, Asstt. Collector, Central Excise - 1978 E.L.T. (J 444) = AIR 1975 Supreme Court 960. In para 8 of the petition, it is averred that after the declaration of law by the Supreme Court the petitioner was advised that it was liable to pay excise duty in respect of its products after excluding the post-manufacturing costs and profits arising from post-manufacturing operations. On 10th May, 1975 the petitioner addressed a letter to the Superintendent, Central Excise and Customs, and referring to the decisions of the Supreme Court in Voltas case and the Atic case, pointed out that excise duty was being collected from the petitioner on post-manufacturing expenses also, which was included in the assessable value of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a similar statement had also been made by Mr. H.H. Advani, the learned Counsel then appearing for the respondents when the petition was before my learned Brother Bharucha on 24th April, 1981) and that the petition having been filed on 1st October, 1976, namely, within 3 years from the period 12th May, 1974 to 11th May, 1975, he could not, in this Court resist the refund to the petitioner of the excess duty amounting to Rs. 16,41,120.46. It was solely on the question of refund of the excess duty amounting to Rs. 7,09,419.69 for the earlier period 1st October, 1973 to 11th May, 1974, that Mr. Dalal confined his arguments, resisting that demand on the ground of limitation. 6. On behalf of the petitioner, it was urged by its learned Counsel Mr. A.H. Desai, that the petitioner was entitled to this refund of Rs. 7,09,419.69 as it was paid under mistake of law and was recovered by the Department from the petitioner without authority of law. In support of this proposition, reliance was placed by Mr. Desai on the decision of the Division Bench of this Court in Associated Bearing Co. v. Union of India, 1980 E.L.T. 415, and the unreported judgment of my learned Brother Pendse in Miscellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment in March 1981 was more than 3 years after knowledge of the petitioner's alleged right to recover the same. 8. I do not think Mr. Dalal is quite correct. To start with, Voltas and Atic cases decided by the Supreme Court were concerned with the question as to which price was to be accepted as the wholesale cash price under Section 4 of the Act. They did not deal with the right of a party to claim a refund of duty collected by the Department without the authority of law. What also is not entirely without its own significance is that if the petitioner had realised its mistake after the decision in Voltas case and Atic case as urged by the respondents, it is inconceivable that the petitioner, a business concern, would act in such an irrational manner as not to claim this large amount running into several lacs of rupees in the petition as initially filed, instead of restricting its claim only to the later period of 12th May, 1974 to 11th May, 1975. No prudent and reasonable person, much less a business concern, would want only make an over payment running into lacs of rupees and thereafter deliberately refrain from taking the earliest possible steps to recover money collected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Department was bound to refund this amount also as the same was recovered by the Department without authority of law, and within 3 years of that realisation the petitioner amended the petition and claimed the amount thus collected by the Department without authority of law. Relying on certain observations in State of M.P. v. Bhailal Bhai, A.I.R. 1964 Supreme Court 1007, at page 1011, Mr. Dalal urged that there was unreasonable delay on the part of the petitioner in claiming refund in respect of the earlier period. The observations relied on by Mr. Dalal are as under :- "........Among the several matters which the High Courts rightly take into consideration in the exercise of that discretion is the delay made by the aggrieved party in seeking this special remedy and what excuse there is for it. Another is the nature of controversy of facts and law that may have to be decided as regards the availability of consequential relief. Thus, where, as in these cases, a person comes to the Court for relief under Article 29G on the allegation that he has been assessed to tax under a void legislation and having paid it under a mistake is entitled to get it back, the Court, if it finds t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... colour of public laws, recover people's money, later discovered to be erroneous levies, the Dharma of the situation admits of no equivocation. There is no law of limitation, especially for public bodies, on the virtue of returning what was wrongly recovered to whom it belongs." (The underlining is mine.) 10. Mr. Dalal next relied on a Notification dated 1st September, 1962 (which was in force till 1st March, 1974), in resisting the petitioner's claim for refund of duty for a part of the earlier period. the relevant excerpts of that Notification relied on by Mr. Dalal are as under :- ".....The Central Government hereby exempts with effect from the 1st September, 1962, plastics, all sorts, falling under Item 15A of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) in respect of which the list fixing the price at which they would be sold to the consumer is available, from so much of the duty of excise leviable thereon as is in excess of 20% of the value calculated after allowing a discount of 12.5% on the price specified in the said list." Mr. Dalal urged that the Notification would be the valid method of assessing duty and that an assessable value havi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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