TMI Blog2005 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... consumers/customers. In view of specific finding, in our opinion, the conclusion is inescapable that the appellant-Mandal is not entitled to claim any amount. Allowing exemption or refund of amount would result in 'unjust enrichment' by the appellant which cannot be permitted. In our opinion, therefore, even on that count, orders passed by the authorities and refusal to grant benefit cannot be held arbitrary, unreasonable or inequitable. The said ground also, therefore, has to be rejected. Thus appeals deserve to be dismissed - 6832 and 6833 of 1999 - - - Dated:- 9-3-2005 - Ruma Pal, Arijit Pasayat and C.K. Thakker, JJ. [Judgment per : C.K. Thakker, J.]. - Both these appeals arise out of a common order passed by the Customs, Excise and Gold (Control) Appellate Tribunal, Western Regional Bench at Bombay (hereinafter referred to as 'CEGAT') on 1st June, 1999 by which it confirmed the orders-in-original passed by Assistant Collector, Central Excise, Valsad and affirmed by Collector of Central Excise (Appeals), Ahmedabad. 2.Before dealing with the points raised by the parties in the present appeals, relevant facts of both the cases may be stated in brief. Civil Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sugar Rate per Qtl. Total Rebate 1. 55135.67 65% i.e. 35838.18 Levy 4.20 1,50,520.40 2. 55135.67 35% i.e. 19297.48 Free sale 28.10 5,42,259.19 Rs. 6,92,779.59 6.On going through actual sale by the appellant, however, it was found that out of excess production of 55,135.67 quintals sugar, the Mandal had sold sugar as levy sugar and free sale sugar as under : 42133 Qtl. Levy Sugar x Rs. 4.20 = 1,76,958.60 (Rate of rebate) 13003 Qtl. Free Sale x Rs. 28.10 = 3,65,384.30 Sugar (Rate of rebate) Total Rs. 5,42,342.90 7.The claimant, therefore, according to the Assistant Collector, could not have claimed Rs. 6,92,779.59 ps., but only Rs. 5,42.342.90 ps. The Assistant Collector further observed that the claimant had already charged and collected the duty amount from its customers and as such it was not entitled to claim the said amount. He, therefore, transferred the amount to Consumer Welfare Fund, set up by the Government of India. 8.Being aggrieved by the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit the consumers. But it was observed that with the amendment of Section 11B, the new provision would apply to all claims including those filed before the amendment. The Collector also observed that the Notification No. 257/76 did not use the word "rebate" but provided for exemption from payment of duty on levy sugar and free sale sugar at the rate specified in the table appended thereto. Section 11B provided for refund of excise duty in certain cases to the applicant under sub-section (2) of Section 11B of the Act. Since the case in hand was not covered by the said provision as the Mandal had not paid the said amount, the Mandal could not get such amount. He, therefore, dismissed the appeals. 11. The aggrieved appellant approached the CEGAT. Before the CEGAT, the arguments advanced before the lower Authorities were reiterated. The CEGAT, however, confirmed the order passed by the Assistant Collector as well as by the Collector. According to the CEGAT, the claim was "clearly barred by limitation". The CEGAT also observed that even if the claim was not barred by limitation, it would come within the judgment of this Court in Mafatlal Industries Ltd. and Ors. v. Union of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 11B of the Act, the Mandal could not claim the said amount from the Government. He in the circumstances reduced the claim to Rs. 4,44,111.60 ps. but transferred the amount to Consumer Welfare Fund set up by the Government of India. 17.Being aggrieved by the said order passed by the Assistant Collector, the appellant preferred an appeal but the appeal was dismissed by the Collector of Customs. The aggrieved appellant then approached the CEGAT as already noted earlier. The CEGAT also dismissed the appeal. The common orders passed by the CEGAT in both the matters have been challenged by the Mandal in the present appeals. 18.We have heard learned Counsel for the parties. The learned Counsel for the appellant-Mandal contended that the Authorities below committed an error of law in holding the claim of the appellant as time barred. He also contended that the Authorities were wrong in reducing the claim of the appellant in Civil Appeal No. 6833 of 1999 by improperly interpreting Notification No. 108/78, dated 28th April, 1978 and in calculating the average production as per the said Notification. According to the learned Counsel, production of sugar by the appellant in three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the Counsel submitted that for claiming benefit of exemption of excess production of sugar, sale of sugar must be as per the policy of the Government for levy sugar and free sale sugar. From the record, it is clear and a finding has been recorded by the Authorities that sale of sugar was not in the ratio of 65 : 35 for levy sugar and free sale sugar respectively and, hence, the benefit was calculated on the basis of actual sale of sugar and the action was legal, valid and proper. Regarding the grievance of the appellant of transferring the amount of exemption from octroi duty to Consumer Welfare Fund, it was submitted that admittedly the appellant has not suffered. The octroi amount has been passed on to customers and has already been recovered by the appellant. Hence, under sub-section (2) of Section 11B of the Act, the Mandal cannot claim such amount. But even if it is assumed that Section 11B has no application, on general principle also, the appellant has no right to claim such amount as it would result in 'unjust enrichment' by the appellant. Hence, by not extending the said benefit, the Authorities have committed no error of law. He, therefore, submitted that the appeals d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.It was then contended that the authorities were not right in reducing the amount of rebate on the basis of sale of levy sugar and free sale sugar. According to the appellant-Mandal, sugar was sold by the Mandal, the authorities were made aware of that fact, and nothing was suppressed. When the authorities were aware and yet no objection was taken by them at any time, it was not open to them to reduce the amount on the ground that sale of sugar by the appellant-Mandal was not as per so called policy of the Government of 65 per cent levy sugar and 35 per cent free sale sugar. Reduction of amount on that ground was illegal and unlawful. 24.We are unable to uphold the argument. In our opinion, both the notifications are abundantly clear. The benefit under the said notifications can be claimed only if sugar is sold in the proportion of 65 : 35 levy sugar and free sale sugar respectively. Since the appellant was claiming the benefit of exemption from excise duty, it was obligatory on the appellant-Mandal to sell sugar in the ratio of 65 : 35 as specified in the notifications and unless that condition is fulfilled, the benefit of exemption from duty could not be claimed by it. On t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case is totally different. The amount has been passed on to consumers and the claim is made by the Mandal to refund the amount. The ratio laid down in Hindustan Metal Pressing Works, therefore, does not help the appellant. 29.Finally, it was submitted that the doctrine of 'unjust enrichment' has no application. The said doctrine, therefore, could not have been invoked by the authorities for denying the benefit of exemption from payment of excise duty and in refusing to pay the amount to which the appellant was held entitled by diverting it to Consumers Welfare Fund set up by the Government. 30.We are not impressed by that argument also. In our view, the submission is not well founded and cannot be accepted. 31.Stated simply, 'Unjust enrichment' means retention of a benefit by a person that is unjust or inequitable. 'Unjust enrichment' occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else. 32.The doctrine of 'unjust enrichment', therefore, is that no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of 'unjust enrichment' arises where retention of a be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the contract was void. The plaintiff claimed refund of Rs. 10,000/-. 39.Applying the provision of Section 70 of the Contract Act, 1872 and referring to Fibrosa and Nelson, this Court said : "...It is well established that a person who seeks restitution has a duty to account to the defendant for what he has received in the accounting by the plaintiff is a condition of restitution from the defendant". 40.In M/s. Amar Nath Om Prakash Others v. State of Punjab Others, (1985) 1 SCC 345 : (1985) 2 SCR 72, Section 23A of the Punjab Agricultural Produce Markets Act, 1961 enabled the market committees to retain the fee levied and collected by them from licensees in excess of the leviable amount if the burden of such fee was passed on by the licensees to purchasers. The validity of the said provision was challenged and refund was claimed. The Court, however, relying on Orient Paper Mills held that consumer public who had borne the ultimate burden were the persons really entitled to refund and since the market committees represented their interests, they were entitled to retain the amount and the licensees who had levied and collected the amount from consumers could not claim t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund of amounts to those from whom illegal collections had been made by traders. 45.In Mafatlal Industries Ltd. also, this Court held that refund of tax/duty wrongfully paid can be claimed on the basis of doctrine of equity and a person demanding such restitution must plead and prove that he had paid such tax/duty and had suffered loss/injury. The burden is on the petitioner to prove that the tax/duty paid by him is not passed on to customers or third party and that he is entitled to restitution. 46.A reference may also be made to a recent decision of the Constitution Bench in Godfrey Phillips India Ltd. Another v. State of U.P. Ors., Writ Petition (c) No. 567 of 1994, dated January 20, 2005. In that case, constitutional validity of Uttar Pradesh Tax on Luxuries Act, 1995 as also other State Acts was challenged inter alia on the ground of legislative competence of the State Legislatures. The Court allowed the petition and held that the State Legislatures were not competent to impose luxury tax on tobacco and tobacco products and the Acts were declared ultra vires and unconstitutional. In the intervening period, however, tax was collected by the appellants from consumers a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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