Customs, Excise and Gold Tribunal - Delhi
Britannia Industries Limited vs Collector Of Central Excise on 18 November, 1988
Equivalent citations: 1989(21)ECR185(TRI.-DELHI), 1989(40)ELT170(TRI-DEL)
ORDER Harish Chander, Member (J)
1. The Britannia Biscuit Co. Ltd., had filed a revision application to the Joint Secretary, Government of India, Department of Revenue and Banking, New Delhi being aggrieved from order-in-appeal Nos. 1976/76 and 1977/76 dated 17th December, 1976 passed by the Appellate Collector of Customs and Central Excise, Bombay. The said revision application stands transferred to the Tribunal in terms of the provisions of Section 35 of the Central Excises and Salt Act, 1944 to be disposed of as an appeal. The Appellate Collector of Central Excise had disposed of two appeals by a consolidated order but the appellants had filed only one revision application. Subsequently another supplementary appeal was filed and presented in the registry on 18th January, 1985. In the supplementary appeal there was also a request from the appellants for the condonation of delay in the filing of the supplementary appeal. Another Misc. application was moved by the appellants requesting the Tribunal for the substitution of name M/s. Britannia Industries Ltd. in place of the "Britannia Biscuit Co. Ltd.". Vide order dated 6th January, 1986 the Tribunal had allowed the appellants request for the substitution of the name. Shri A. Hidayatullah, the learned advocate who has appeared on behalf of the appellants has requested for the condonation of delay and argued that since the original revision application was filed well within the statutory period prescribed for the filing of the appeal the delay in the filing of the supplementary appeal may be condoned as the appellants were prevented by sufficient cause in the late filing of the appeal.
2. Shri V.M. Doiphode, the learned S.D.R. left it to the Bench.
3. After hearing both the sides the delay for the filing of the supplementary appeal is condoned.
4. Briefly the facts of both the appeals are that the appellants had filed two claims for refund vide their letters dated 16th Oct., 75 and 20th Feb., 76 requesting for the refund of the amounts at Rs. 11,78,263.21 and 2,50,618.86 for the periods 1-1-74 to 31-3-75 and 1-4-75 to 30-9-75 respectively. The learned Assistant Collector, Central Excise, Bombay vide his two separate orders dated 20th July, 1976 had rejected the appellant's claim for refunds on the ground that assessment of biscuits for the above mentioned parties were correctly finalised on the basis of the prices declared by them and approved by the Excise authorities. It was further mentioned in the order that the assessment and prices approved were not disputed by the appellants. Being aggrieved from the aforesaid order the appellants' had filed appeals before the learned Appellate Collector of Central Excise. The learned Appellate Collector of Central Excise had rejected the appellants' appeal by a consolidated order and had observed that as per Section 4 only discount and Central Excise duty are to be deducted when wholesale market existed and the goods were sold to wholesale dealers as per price lists approved by the Department. He had confirmed the findings of the Assistant Collector and had rejected both the appeals. Being aggrieved from the aforesaid order the appellant has come in appeal before the Tribunal.
5. Shri A. Hidayatullah, the learned advocate has reiterated the facts. He has referred to the provisions of Old Section 4 and old Rule 11. He has also referred to old proforma price lists and has argued that the appellant had paid the duty without claiming any deductions. He has referred to the GP.I pertaining to that period and has argued that on every GP-I there was an endorsement to the effect that "Excise duty is paid subject to our claim for refund pursuant to the decision of the Supreme Court of India in the case of Voltas Ltd". The appellants have filed the refund claim on 16th October, 1975 and the same was rejected by the Assistant Collector vide letter dated 20th July, 76 which appears on page 90 of the Paper Book. Being aggrieved from the aforesaid order an appeal was filed to the Appellate Collector of Central Excise. The same was rejected vide order dated 17th December, 76 which appears on page 80 of the paper book. Being aggrieved from the aforesaid order the revision application was filed on 7th June, 77 which is now being treated as an appeal. Shri Hidayatullah has argued that on 24th January, 84 a letter was addressed to the Assistant Collector in respect of 20 refund claims and the total amount of refund was Rs. 25,74,740/- on the basis of the decision of the Supreme Court dated 14th Nov., 83 and a judgment of the Bombay High Court dated 15th Dec, 83. The appellants had filed the refund claim vide their letter dated 16th October, 75 before the Assistant Collector requesting for the grant of refund for Rs. 11,78,263.21 for the period 1st January, 74 to 31st March, 75. Thereafter another refund claim vide letter dated 20th Feb., 76 for the period 1st April, 75 to 30th Sep., 75 for Rs. 2,50,618.86 was made to the Assistant Collector. For this period the excise duty was paid under protest and on every gate pass there was a mention to this effect. Shri Hidayatullah had argued that Rule 233-B came into force w.e.f. 1st June, 1981. He has argued that the present appeals are governed by Old Rule 11 which was in force upto 5th Aug., 77. The new Rule 11 came into force w.e.f. 6th August, 77 and the old Rule 11 has to be read with Rule 173-C of the Central Excise Rules. In old Rule 11 there was no limitation for cases of mistake of law and at that time old Section 4 of the Central Excise Act was applicable. The first refund application of the appellants is dated 16th October, 75 and the second application is dated 20th Feb., 76. The price lists of the appellants dated 23rd November, 73 were approved by the Supdt. Central Excise under Rule 173 C of the Central Excise Rules. He has again referred to the gate passes and has stated that the appellants have put a stamp on the gate pass to the effect that the duty was paid under protest. The same appears on pages 54 and 56 of the paper book. He has also referred to Col. No. 11 of the RT-12 return. Shri Hidayatullah has argued that the tax which has been collected by mistake of law has to be refunded. In support of his arguments he has referred to the following judgments :-
1983 ELT 1495 (S.C.), AIR 1973 SC 1300 - Patel (India) 1985 (19) ELT 373 - ITC v. Chipkar 1986 (23) ELT 227 - Western India Plywood 1983 ELT 2238 - Golden Tobacco 1982 ELT 237 (Bom.), - The Svadeshi Mills Co. Ltd.
1984 ECR 1559 - Coll. v. Stewarts & Lloyds Shri Hidayatullah has argued that in view of the judgments cited by him the refund claim should be allowed. He stated that the Miles India case is not applicable in the appellants case. The judgment applicable in the appellants case is of Patel (India). Shri Hidayatullah stated that the language of old Rule 11 was different. In the appellants' case old Rule 11 is applicable and the Supreme Court's judgment in the case of Patel (India) deals with old Rule 11. In terms of the provisions of Article 265 of the Constitution of India no tax can be collected without authority of Law. He has laid emphasis dn para Nos. 14 and 15 of the Patel (India) case. He has also argued that Section 40 of the Sea Customs Act is applicable in three circumstances.
(i) Inadvertence
(ii) Error
(iii) Misconstruction He has argued that in view of the principles laid down in Patel (India) case the appellants' appeal has to be accepted. He has also referred to the following judgments
(i) 1985 (22) ELT 552 (Tribunal) - Star Textile Engg. Works Ltd.
(ii) 1972 (TLR) 1833 - Bata Shoe Co.
(iii) 1982 ELT 237 (Bom)- The Svadeshi Mills Co. Ltd.
On the issue of the use of Cardboard boxes he has argued that these were only used for the upcountry sales. He has relied upon a judgment in the case of Godrej and Boyce reported in 1984 (18) ELT 172 and has laid emphasis on para No. 24 of the said judgment. He has pleaded for the acceptance of the appeals.
6. Shri V.M. Doiphode, the learned S.D.R. who has appeared on behalf of the respondents has argued that the appellants had filed the price lists regularly and had paid the Central Excise duty all along and the period in dispute is after the Voltas judgment. The appellants had filed the RT-12 Returns. The same were duly assessed. Shri Doiphode has argued that if the appellants' plea was that the payment was under a mistake of Law there are other remedies which the appellants should follow. Shri Doiphode has argued that the quasi judicial authorities are bound by the provisions of the Statute. Section 27 is also covered. Once it is pleaded as a case of mistake of Law under the Limitation the remedy is Act somewhere else. He has argued that the learned Counsel had laid great emphasis on Patel (India) case decided by the Hon'ble Supreme Court and the issue of mistake of Law was not before the Hon'ble Supreme Court and the facts of Patel (India) case are different from the facts of Miles India. The appellants had filed 34 price lists from 1st January, 74 to 31st March, 75 and nine price lists from 1st April, 1975 to 30th Sep., 75. The appellants have not claimed any exclusion of post manufacturing expenses. RT-12 returns were duly finalised and the appellants have accepted the same. The Voltas case was of 1973 and the ITC Industries case was in 1975 and the first judgment was in the case of ITC which is dated 15th December, 1975. In support of his arguments he has referred to the following judgments :-
AIR 1966 SC 905 1978 ELT J-643 1972 (30) STC 120 (AP) - Gurram Sreeramulu, Garlapati Anjaneyulu & Co. and Ors.
AIR 1970 SC 898 - Tilokchand Motichand v. H.B. Munshi 1985 (19) ELT 614 (Tri.) 1985 ECR 437 (CEGAT) - Metal Saws Products v. CCE Ahmedabad.
Shri Doiphode has laid emphasis on para No. 7 of above judgment. He has pleaded for the dismissal of the appeals. Alternatively he has pleaded that if the respondent's prayer for dismissal is not accepted the matter may be remanded for fresh decision on merits.
7. Shri A. Hidayatulla, the learned advocate in reply states that the appellants had paid the duty under mistake of Law and the duty was paid under protest and the same cannot be treated as voluntary payment. He has argued that the judgment in the case of State of Madhya Pradesh v. Haji Hasan Dada reported in AIR 1966 SC 905 is not applicable in the case of the appellants. If the tax is paid by mistake of Law the same has to be refunded. He has relied on a seven judges decision of the Supreme Court in the case of State of Kerala v. Aluminium Industries reported in 1965 (16) STC 689. He has argued that the other judgments cited by the learned S.D.R. are not applicable in the appellants' case. In para 17 of the judgment in the case of Patel (India) reported in AIR 1973 (SC) 1300 the Supreme Court had laid down that excess amount of tax paid by mistake of law by an assessee, the authorities are bound to return the same. He has also referred to the following judgments :-
1985 (22) ELT 306 - Union v. Godfrey Phillips 1983 ELT 2238 - Golden Tobacco He has laid special emphasis on para 18 of the said judgment. He has opposed the remand and has pleaded for the acceptance of the appeals.
8. We have heard both the sides and have gone through the facts and circumstances of the case. The particulars of the appellants' refund claims are as under :
Date of filing the refund Period Amount
application
1. 20th February, 1976 1st April, 1975 to 30th Sep- 2,50,618.86
tember, 1975
2. 16th October, 1975 1st January, 1974 to 31st 11,78,263.21
March, 1975
The appellants had filed price lists and had paid duties on the basis of price lists approved by the Superintendent and the appellant did not file any appeals before the Appellate Collector and as such the same became final since the Assistant Collector had no power to revise the Superintendent's price lists approval orders and allow the consequential refund claim made by the appellants. We have perused the GP-I's, RT-12 returns and price lists. On GP-I there is a stamp to the effect "Excise duty is paid subject to our claim for refund pursuant to the decision of the Supreme Court of India in the case of Voltas Ltd." In the paper book No. 1 two RT-12's for November, 74 and May, 75 have been filed. In RT-12 it is mentioned that "Excise duty is paid 'Under Protest' and the RT-12's have also got stamp "Excise duty is paid subject to our claim for refund pursuant to the decision of the Supreme Court of India in the case of Voltas Ltd." We have also perused the price lists. Price lists filed by the appellants have been approved and accepted without any modification. Shri A. Hidayatullah, the learned advocate for the appellants had placed great reliance on the judgment of the Hon'ble Supreme Court in the case of Patel (India) reported in AIR 1973 SC 1300. In para Nos. 13 and 14 of the said judgment the Supreme Court had held that "The fact that no application had been made for refund of that excess levy in respect of the rest of the items under Section 40 was irrelevant to the point that the excess duty was assessed and recovered without the authority of Law."
The case of the appellants before us is two-fold :-
(i) Rule 11 of the Central Excise Rules, 1944 relating to refund of Central Excise duty applied to the refund claims of the Appellants but the time-bar laid down in the said Rule did not apply to them because they had paid duty 'Under Protest'.
(ii) Alternatively, it was a case of payment of duty under mistake of Law and since Rule 11 as then in force did not cover cases of mistake of law, the said Rule did not apply to their refund claims.
We find no substance in either of these pleas. There could be no question of any protest at the material time because there was no dispute going on between the Appellants and the Department regarding valuation of their biscuits. Whatever price lists had been filed by the appellants, had been approved, without any modification whatsoever, by the Superintendent of Central Excise. The Appellants had evidently accepted these price approvals because firstly the price lists were filed without any reservation whatsoever on the question of post-manufacturing expenses and secondly even after the price approvals the appellants had not agitated the question of post-manufacturing expenses either with the Superintendent or with the Assistant Collector or with the Appellate Collector within the time limit and in accordance with the manner as prescribed. In the circumstances, there could be no question of payment of duty 'Under Protest' on the score of post-manufacturing expenses. The mechanical act of stamping the Gate Passes and RT-12 assessment returns, without telling the Competent Authority as to what this protest was for, was a meaningless exercise. Decisions on disputes regarding rate of duty or value of the goods were arrived at on the price list or classification list and not on Gate Passes and RT-12 returns. The Gate Passes and RT-12 returns had only to follow the decisions taken on the price list and classification list. We hold, therefore, that the mechanical and unilateral stamping of protest on Gate Passes and RT-12 returns could not amount to payment of duty 'Under Protest' in the facts of this case.
We do not agree with the Appellants that payment of duty by them was under mistake of law. The judgment of the Hon'ble Supreme Court in the Voltas case, with which the controversy regarding post-manufacturing expenses started in the Country, was pronounced in December, 1972 and it was available in print in January, 1973. The appellants admitted before us that they were aware of this judgment from the very beginning. There could, therefore, be no question of any mistake of law. As a matter of fact, the same appellants had made a claim for deduction of post-manufacturing expenses in price lists relating to another biscuit factory of theirs but they did not do so in respect of the present factory whose two cases are now before us. The omission or lapse on their part was plainly a case of inadvertence or error which was specifically covered by Rule 11. It was not a case of mistake of law. Both the refund claims were timebarred under Rule 11.
What the Hon'ble Supreme Court held in the Customs case of Miles India Limited, 1987 (30) ELT 641 (SC), has been reiterated in the Central Excise case of Doaba Co-operative Suger Mills [1988 (37) ELT 478 (SC)], namely, "The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the Department, the provisions of limitation prescribed in the Act will prevail.....If really payment of duty was under a mistake of law, the party might seek recourse to such alternative remedy as it might be advised". Rule 11 was therefore, the only authority available to the Assistant Collector for proceeding with the refund claims and since the refund claims were filed clearly beyond the prescribed time limit of one year, the Assistant Collector had no option but to reject them as time-barred.
During the relevant period old Rule 11 was in force upto 6th August, 1977. A simple perusal of the old Rule 11 will show that the repayment of the duty was permissible in three cases :-
(i) Inadvertence
(ii) Error
(iii) Misconstruction and the application for refund had to be filed within three months. Rule 11 had to be read with old Rule 173J whereby the period of three months was extended to one year. In the matters before us the appellants had made a vague mention of the payments of duty under protest without the claim of any specific deductions from the assessable value especially when the appellant had filed the price lists and the same were approved and there was no claim of any deduction in the price lists filed by the appellants. Shri V.M. Doiphode, the learned S.D.R. had placed strong reliance on the judgment of the Supreme Court in the case of Tilokchand Motichand and Ors. reported in AIR 1970 SC 898 where the Supreme Court by majority decision had held that the petitioner cannot take advantage of the Supreme Court decision in the Gujarat case reported in AIR 1968 SC 445 after a lapse of a number of years. His contention that the ground on which the statute was struck down was not within his knowledge and therefore he could not pursue it in this court, would not stand, since the law will presume that he knew that exact ground of unconstitutionality. It was his duty to have brought the matter before the Supreme Court for consideration. In any event having set the machinery of law in motion he could not abandon it to resume after a number of years. There was no question here of a mistake of law entitling the petitioner to invoke analogy of the article in the Limitation Act. In the present matter the appellants were very well aware of the judgment of the Supreme Court in the case of Voltas. If at all they had the intention of claiming refund he should have made specific claim of deductions from the assessable value in the price lists, GP-I and RT-12. The mere fact that a vague mention is made of the payment of duty under protest will not entitle him to claim refund. Whatever pricelists were filed by the appellants the same were approved and the appellants did not challenge the approval. In the matters before us the appellants cannot say that they had paid the excess duty under a mistake of Law. Since the appellants had accepted the pricelists approved by the Superintendent the same cannot be treated as payment of duty under protest. The judgments cited by the learned advocate do not help him as the facts are different. Accordingly we do not find any merit in the appeals. Both the refund claims were time-barred. The appeals are rejected.