TMI Blog1980 (10) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... realisation whether their liability to refund is barred by limitation prescribed by Rule 11 of the Central Excise Rules, 1944. To appreciate and decide the point at issue it would be necessary to refer to certain facts which are set out briefly as follows. 2. The petitioner company manufactures D.W. Tarpaulin and D.W. Jute canvas in their jute mills. On and from the midnight of April 23, 1962, Central Excise duty was imposed on the jute manufactures when Item 22A of the First Schedule to the Central Excises and Salt Act, 1944 came into effect. The said item reads as follows : "22A. Jute Manufactures (including the manufactures of Bimlipatam jute) or mesta (fibre), all sorts, not elsewhere specified in which jute (including Bimlipatam jute or mesta fibre) pre-dominates in weight— (1) Hessians ............ Rs. 250 per M.T. (2) All other descriptions of jute manufactures not otherwise specified (including cloth bags, twist, yarn, rope and twine) Rs. 125 per M.T." 3. The petitioner before us who was manufacturing D.W. Tarpaulin and D.W. Jute canvas thereupon submitted applications in Form A.R. I for passing their products, namely D.W. Tarpaulin on payment of excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraph 4 of this officer letter of even number 7321B dated 15-4-1969 and to say that the matter of classification of (1) jute canvas and (2) D.W. Tarpaulin has been examined and it has been decided to classify the said products as "all other descriptions of jute manufactures not otherwise specified" under sub-item (2) of Item 22A of the Central Excise Tariff. Necessary instructions have been issued to the Assistant Collector of Central Excise, Calcutta III Division in the matter." 7. The Association in its turn having informed the petitioner of the aforesaid decision of the Central Government with regard to the disputed classification of their products, the petitioner on June 4, 1965, and on July 25, 1965, lodged their claim of refund of excise duty paid in excess by them between the period May 1962 and February 1964 of their products D.W. Tarpaulin and D.W. Jute canvas. Such claims being lodged the petitioner was called upon to show cause why the claim should not be rejected under Rule 11 of the Rules framed under the said Act as time-barred. In showing cause the petitioner pointed out that they originally classified their products as falling within the category specified in ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see no justification for interfering with the order in appeal. The revisional application is accordingly rejected." 11. Feeling aggrieved by the aforesaid orders dated November 24, 1965, April 16, 1966 and February 28, 1967, the petitioner has moved the present application on the alternative prayers referred to hereinbefore for setting aside the said orders and for an order directing refund of the excess excise duty paid by them on their products between May 1962 and February 1964. 12. The present application is being contested by the respondents who have filed an affidavit in opposition. According to the respondents, the petitioner having paid the excise duty on an assessment which was not disputed in accordance with law and on the other hand they themselves having classified their products as those coming under entry 22A(1) in their application in Form A.R. I filed by them, later cannot claim any refund except in terms of Rule 11 of the Rules. It is further claimed that had the petitioner disputed the classification at the material time they could have asked for provisional assessment under Rule 9(b) or could have paid the assessed duty under protest but they did not do anyth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in entry 22A(1) so that their claim for refund would squarely come under Rule 11. It has been pointed out by Mr. Banerjee that they themselves were quite aware of the said position when they prayed for waiver of the limitation prescribed by the said Rule. Such being the position, according to Mr. Banerjee it had been rightly held in the orders under challenge that the claim for refund is barred by the provision of Rule 11 of the Rules. 15. We have carefully considered the rival contentions put forward before us. On the undisputed facts it is now well-established that the petitioner initially got their products passed by the excise authorities on the basis that such products answer the description of the goods specified in entry 22A(1). This was at the time when the said entry was brought into effect for the first time. Later, however, the assessing authorities changed their views as to the classification. The thought that such products must be considered to be hessian coming under entry 22A(1) and not entry (2) thereof. The petitioner did accept for the time being such a claim on the part of the assessing authorities when they paid the balance demanded for the goods alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jee that the claim of refund as made in the present case really comes within Rule 11 of the Rules and consequently we are unable to support any of the impugned orders all of which are based on the said view. As we have indicated hereinbefore the respondents are not in a position to dispute their liability on merits to refund because on the Government decision dated April 29, 1964, they had realised an excess excise duty to the extent of Rs. 125 per M.T. from the petitioner for the goods cleared between May 1962 and April 1964. Notwithstanding the said position such a claim had been refused only on the application of the special limitation prescribed by Rule 11 of the Rules which in our view, however, can have no application. It is also a settled principle now that if the claim of refund of any amount realised without any authority of law is not barred by any specific statutory provision, is enforceable in law. 17. Mr. Gupta in our view rightly relied on the decision of the Supreme Court in the case of Patel India Private Limited v. Union of India, A.I.R. 1973 S.C. 1300 = 1983 E.L.T. 1495. In this case, the appellant who was an importer of certain goods claimed that the import dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is higher than the one chargeable under the aforesaid Item No. 39. Having paid such excess duty, the appellant claimed refund under Section 27(1) of the Customs Act, 1962. Unlike Rule 11 now under consideration, Section 27(1) thereunder consideration is wide in its terms as it refers to all claims for refund of any duty paid in excess under whatever account. Such a claim under Section 27(1) was rejected on the ground of limitation prescribed by Section 27(1) and that was upheld by the Supreme Court notwithstanding a decision of the Supreme Court in the meantime deciding V.P. Latex to be chargeable under Item 39 and not Item 87 of the Indian Tariff Act. As we have indicated here the claim of refund was made under Section 27(1) and Section 27(1) itself was wide enough to cover such a case. Secondly in this case unlike the one now before us the assessing authorities were not in doubt as to proper classification and the assessment was not being made pending classification being determined by the government itself. The classification itself was impugned in making the application for refund and a decision of the Supreme Court intervened to support the claim for classification as made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration." 20. Again in a very recent decision in the case of Shiv Sankar Dal Mills v. State of Haryana, A.I.R. 1980 S.C. 1037, the Supreme Court was considering a similar question where it was observed : "Where public bodies, under colour of public laws, recover people's moneys, 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 wrongfully recovered to whom it belongs. Nor is it palatable to our jurisprudence to turn down the prayer for high prerogative writs, on the negative plea of alternative remedy, since the root principle of law married to justice is ubi jus ibi remedium." This decision, in our view gives complete answer to the first point raised before us by Mr. Banerjee appearing on behalf of the respondents in support of orders impugned before us. 21. Before we conclude we have to dispose of an incidental objection to the claim of refund realised by Mr. Banerjee. According to Mr. Banerjee the petitioners having passed on the incidence of enhanced assessment of the excise duty to their customers the refund, if ordered, would on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on by the Bombay High Court in its later decision, which though obiter appear to enunciate the true legal principle which follows from their earlier decisions referred to hereinbefore. 23. However, it appears to be the consistent view of all courts that all realisations made by the Government without authority of law must be re-imbursed. Supreme Court has recognised the position that High Courts exercising their writ jurisdiction have power for the purpose of enforcement of fundamental as well as statutory rights to give consequential relief by ordering repayment of money so realised without any authority of law; though at the same time it has been made clear that the special remedy under Article 226 is not intended to supersede completely the other normal remedies or to deny defences legitimately open in such an action. In the present case it should be noted that the petitioners had moved the authorities under the statute for the refund and the order refusing such a prayer as made by those authorities have been challenged under Article 227 and alternatively under Article 226 of the Constitution. No order for refund having been sought for from this Court in exercise of its w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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