Patna High Court
Incab Industries Ltd. vs Asstt. Collector Of C. Ex. on 21 May, 1998
Equivalent citations: 1998(46)BLJR1048, 1998(102)ELT7(PAT)
Author: R.A. Sharma
Bench: R.A. Sharma
JUDGMENT R.A. Sharma, J.
1. The petitioner has filed this writ application seeking writ of mandamus directing the Assistant Collector, Central Excise, Jamshedpur, (hereinafter referred to as the Assistant Collector), to refund the amount of Rs. 13,09,598.43 which was collected as Excise Duty from it. A prayer for quashing the order of the Assistant Collector dated 5-9-1986 rejecting its claim for refund has also been made.
2. Mr. Pawan Kumar, learned Sr. Counsel for the petitioner, has made two submissions in support of this petition, namely, (1) as the petitioner deposited the excise duty under protest, the period of limitation of six months fixed by Section 11B will not be applicable; and (2) if the excise duty is paid under mistake of law, the claim for its refund can be made within three years of the discovery of such a mistake. As the petitioner discovered the mistake from the Supreme Court decision in Union of India and Ors. v. Bombay Tyre International Ltd. -1983 (14) E.L.T. 1896 (S.C.), the claim for refund of duty made by it was within three years therefrom and, therefore, it could not be rejected on the ground of limitation. Mr. Trivedi, learned Counsel for the respondents, has disputed the above submissions.
3. The petitioner made an application dated 30-4-1986 under Section 11B of the Central Excise Act (hereinafter referred to as the Act) seeking refund of the excise duty paid during the period from October, 1975 to June, 1983. This application has been rejected by the Assistant Collector on the ground that the claim for refund was barred by time. It has been stated that the appeal filed against the said order has also been dismissed.
4. Section 11B of the Act provides for refund of the excise duty. The section has also fixed the period of six months from the relevant date for making the claim for refund. However, the proviso appended to the said section has laid down that the limitation of six months shall not apply where a duty has been paid under protest.
5. In its application dated 30-4-1986 for refund, the contents of which are reproduced below, the petitioner has not stated that it has paid excise duty under protest :-
"Dear Sir, Sub : Claim for refund of duty made to pay on element of freight during the period from October, 1975 to June, 1983.
Please refer to our letter dated 4-1-1984 wherein we stated that we are entitled to refund of duty made to pay on the element of freight in the past in view of the decision of the Supreme Court in the case of Bombay Tyre International Ltd.
We could now ascertain the amount made to pay in excess over the amount due on the element of freight during the said period which is calculated to Rs. 13,09,589.42. The details of break-up (financial year-wise) are as follows :-
Years Amount of duty on
1975-76 freight paid
Rs. P.
(From Oct., 1975 to March, 1976) 21,993.36
1976-77 87,848.90
1977-78 23,280.23
1978-79 1,12,972.19
1979-80 1,55,433.90
1980-81 28,273.18
1981-82 3,74,089.79
1982-83 3,91,538.53
1983-84 1,44,163.25
(From April to June, 1983) 13,39,593.33
We would request you to sanction the said amount forthwith.
Thanking you."
6. After receipt of the above application. the Assistant Collector, vide his letter dated 4-8-1986 asked the petitioner to show cause as to why its application for refund be not rejected as barred by time. The petitioner submitted its reply dated 14-8-1986. In the said reply also it has not been stated that the excise duty was paid under protest. The petitioner only pleaded that the claim for refund has been made within three years from the date of the decision of the Supreme Court in Union of India and Ors. v. Bombay Tyre International Ltd. -1983 (14) E.L.T. 1896 (S.C.), from which it came to know about the correct legal position. The Assistant Collector thereafter, by the impugned order, rejected the petitioner's claim for refund as barred by time. In the absence of any pleadings about the payment of duty under protest, the Assistant Collector was fully justified to reject the petitioner's claim for refund on the ground of limitation.
7. The learned Counsel for the petitioner has further submitted that although the petitioner has not pleaded about the payment of duty under protest before the departmental authorities but now it has specifically pleaded in the Writ Application that payment of duty was made under protest and, therefore, the impugned order of the Excise Commissioner is liable to be set aside and the duty paid is also liable to be refunded to it. This plea has to be rejected for two reasons. Firstly, whether the payment of duty was made under protest by the petitioner is a question of fact which ought to have been raised before the Assistant Collector, but that was not done. Such a plea not having been raised before the departmental authorities cannot be allowed to be raised for the first time in the Writ jurisdiction; and secondly it is true that in Paragraph Nos. 7, 8, 9,10 & 11 of the Writ Application, it has been stated that the petitioner paid the duty under protest but the documents filed in support thereof (Annexures 2,3 and 4) do not support them. The petitioner has claimed the refund of duty for the period from October, 1975 to June, 1983. Annexure-2 is the letter dated 26-9-1975 in which it has been mentioned that the payment of duty has been made under protest. This letter relates to the period prior to October, 1975 and, therefore, is not very much relevant for considering the claim of refund from October, 1975 onwards. The other letter is dated 29-3-1976 which has been filed as Annexure-3, in which payment of excise duty under protest from 1-10-1975 has been mentioned. The claim for payment of excise duty under protest, is, therefore, only for the period from 1-10-1975 to 29-3-1976 which is the date of that letter. The other letter is dated 21-3-1983 in which the petitioner has explained the legal position regarding the liability of the goods manufactured by the petitioner to excise duty. In that letter, it was mentioned that the petitioner will apply for refund of excise duty. In the last line of the said letter, it has further been stated that meanwhile we are clearing the goods under protest from 1-4-1983. Even in paragraph 11 of the Writ Application, only this much has been stated that the petitioner has cleared the goods from 1st April, 1983 to June, 1983, under protest. There is hardly any material in support of the pleadings made by the petitioner in the writ application about the payment of excise duty under protest. In view of the facts and circumstances of the case, it is not proper to allow the petitioner to raise such a question of fact for the first time in the writ jurisdiction, even if the respondents, for the reasons best known to them, have not denied the said claim of the petitioner. The first submission of the petitioner is rejected.
8. The second submission of the learned Counsel for the petitioner is that if the duty is paid under mistake of law, its refund can be sought within three years of discovery of such a mistake from the decision of the Court. The case of the petitioner before the departmental authorities was that it raised the claim for refund of duty within three years after it came to know the correct legal position from the decision of the Supreme Court in Union of India and Ors. v. Bombay Tyre International Ltd. (supra). Presuming that the said decision has any relevance about the petitioner's liability to excise duty it was a case filed by another person and not by the petitioner. Therefore, this submission is also devoid of merit.
9. The controversy involved in this case is squarely covered by the majority decision of the Nine Judge Bench of the Apex Court in Mafatlal Industries Ltd. and Ors. v. Union of India and Ors. -(1997) 5 SCC 536, wherein the paragraph No. 79 of the judgment it was laid down as under :-
"...We are, therefore, of the clear and considered opinion that the theory of mistake of law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee taking advantage of the decision in another assessee's case. All claims for refund ought to be, and ought to have been, filed only under and in accordance with Rule 11/Section 11B and under no other provision and in no other forum...."
The same rule was reiterated in paragraph No. 108(iv). It was declared as follows :-
"(iv) It is not open to any person to make a refund claim on the basis of a decision of a Court or Tribunal rendered in the case of another person. He cannot also claim that the decision of the Court/Tribunal in another/person's case has led him to discover the mistake of law under which he has paid the tax nor can be claim that he is entitled to prefer a writ petition or to institute a suit within three years of such alleged discovered? mistake of law. A person whether a manufacturer or importer, must fight his own battle and must succeed or fail in such proceedings. Once the assessment of levy has become final in his case, he cannot seek to reopen nor can he claim refund without reopening such assessment/order on the ground of a decision in another persons case. Any proposition to the contrary not only results in substantial prejudice to public interest but is offensive to several well-established principles of law. It also leads to grave public mischief. Section 72 of the Contract Act, or for that matter Section 17(1)(c) of the Limitation Act, 1963, has no application to such a claim for refund."
10. This application is dismissed. No costs.