TMI Blog1985 (6) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 of 1944) and the Rules made thereunder (`the Act' and `the Rules'). 3. For the periods from (1) 17-2-1972 to 31-1-1972, (2) 16-2-1972 to 16-3-1972, (3) 1-9-1970 to 28-5-1971, (4) 29-5-1971 to 15-2-1972 and (5) 1-2-1973 to 22-2-1973, the respondent had paid excise duty on the goods manufactured at its Bangalore factory under Sections 3 and 4 of the Act as interpreted by this Court in AMCO Batteries (P) Ltd. v. Assistant Collector of Central Excise, Bangalore - (A.I.R. 1963 Mysore 216). But the Supreme Court in its decision rendered on 1-12-1982 in A.K. Roy v. Voltas Limited - 1977 E.L.T. (J177) - (A.I.R. 1973 S.C. 225) disagreeing with the enunciation made by this Court in AMCO Batteries' case ruled that excise duty under the Act was leviable on the wholesale cash price at the factory gates or from principal to principal basis and not on the basis of secondary wholesales. 4. On 14th February, 15th February, 27th February and 13th March, 1973, the respondent presented five applications for the aforesaid periods before the Assistant Collector of Central Excise, I.D.O. III Bangalore ('Assistant Collector') claiming refund of the difference of excise duty paid on the basis of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed the same, the correctness of which is challenged by the appellants in W.A. No. 160 of 1981 before us. 8. Srhi U.L. Narayana Rao, learned Advocate has appeared for the appellants in the appeals. Sriyuts Ashok Desai and A. Hidayathulla of Bombay Bar assisted by Srhi C.K. Narayana Rao of Bangalore Bar have appeared for the respondent. 9. Both sides in their full and elaborate arguments have relied on a large number of rulings and we will refer them at the appropriate stages. 10. On the contentions urged before us, the following points arise for determination in the two appeals are : W.A. No. 830 of 1980 (1) Whether a petition under Article 226 of the Constitution claiming for refund of taxes paid was maintainable or not ? (2) Whether the claim of the respondent for refund was governed by Rules 11 and 173 (j) of the Rules or not ? If so, governed by the said Rules, is it open to this Court to order refunds in excess of the periods in those Rules ? (3) Whether the respondent was making an unjust enrichment in seeking for refund of excise duty paid for the periods in dispute ? (4) Whether the direction for refund is justified or not ? W. A. No. 160 of 1981 (5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of the authorities under the Act or by this Court exercising its powers under Article 226 of the Constitution. In support of his contention, Sri Rao strongly relies on a ruling of the Supreme Court in M/s. Madras Rubber Factory Ltd. v. Union of India and others - 1983 E.L.T. 1579 (S.C.) = (AIR 1976 S.C. 638) and the rulings of the High Courts of Calcutta and Delhi in 1979 E.L.T. 236 and 1979 E.L.T. 527 respectively. 18. Shri Desai refuting the contention of Shri Rao contends that the refund claim made by the respondent was founded on the ground that the amounts had been collected without the authority of law or outside the Act to which Rules 11 and 173 (j) had no application. In support of his contention, Shri Desai strongly relies on the ruling of the Supreme Court in Patel India (Pvt.) Limited v. Union of India and others - 1983 E.L.T. 1445 (S.C.) = (AIR 1973 S.C. 1300), Vallabh Glass Work Limited's case, several rulings of various High Courts including those of Bombay and Delhi since reported in ITC Limited v. M.K. Chipkar and others [1985 (19) E.L.T. 373] and I.T.C. Limited v. Superintendent of Central Excise and others (1983 E.L.T. 281) (Delhi) that had occasion to examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the Act or without the authority of law as in Patel India (P) Ltd.'s case. We are, therefore, of the view that the principles enunciated in M.M. Rubber case do not govern the case of the respondent. In Assistant Collector of Customs, Madras and others v. Premraj and Ganapatraj and Co. (P) Limited - 1978 E.L.T. 630 (Madras), Leukoplast (India) Limited v. Union of India and others (1983 E.L.T. 2106) (Bombay), the High Courts of Madras and Bombay have distinguished the M.M. Rubbers case on this very ground. We are in respectful agreement with the views expressed by their Lordships in these cases on this aspect. 24. What follows from the above discussion is that Rule 11 and the period stipulated therein had no application to the case of the respondent and there is no warrant for us to disturb the finding of the learned Judge. We see no merit in the contention of Shri Rao to upset the same and we reject it. 25. Re : Point No. 3 : Shri Rao strenuously contends that the respondent who had collected the difference of excise duty from its customers or passed on the burden to its customers, but seeking refund of the same, was making an unjust enrichment and therefore, this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il shop and that l.T.C. make sales is in large bulk only to wholesale buyers at arms length on principal to principal basis, that I.T.C. do not derive any extra benefit from their wholesale buyers and that the transactions between the letter and l.T.C. are bona fide at arms length and do not have any consideration other than the price of the products, and that during the relevant period I.T.C. followed the self removal procedure laid down by Chapter VII-A of the Rules. In para 4 of the Department's affidavit-in-reply dated 29th March, 1976, these averments are admitted to be substantially correct. Para 4 of the petition goes on to say that during the relevant period I.T.C. mistakenly and bona fide believed that for the purpose of Section 4(a) of the Act, the prices charged by the wholesale dealers to the secondary wholesalers formed the correct basis of assessment whereas according to the true legal position discovered later by reason of the Supreme Court decision in Voltas' case, the correct basis of assessment under Section 4(a) was the price charged by I.T.C. to their wholesale dealers. In para-5 of the Department's affidavit-in-reply dated 29th March, 1976 what is denied is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at not a single of I.T.C's. wholesalers (or for that matter anyone else) has come forward claiming as his the excess duty paid to the Department by I.T.C. In the light of this analysis and the undisputed facts, it is difficult to see how I.T.C. can be accused of unjust enrichment, or how in the teeth of this position the charge of unjust enrichment can be brought home to them as suggested by Mr. Sethna merely from I.T.C.'s failure in filing an affidavit in rejoinder." We are in respectful agreement with these views. 31. On the above discussion, we hold that there is no merit in this contention of Shri Rao and we reject the same. 32. Re : Point No. 4 : On the findings recorded by us on Points 1 to 3, it follows that we cannot interfere with the order of the learned Judge in W.P. No. 11792 of 1978. 33. Even otherwise, the correctness of the claims of the respondent which were all within three years prior to the presentation of its application for refund out of which for one year the appellate authority had accepted its claim, was not even disputed by the appellants before the learned Judge or before us also. When that is so, the claim of the respondent founded on the ruling ..... X X X X Extracts X X X X X X X X Extracts X X X X
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