Bombay High Court
Kusum Engineering Works vs Union Of India on 13 August, 1991
Equivalent citations: 1991ECR181(BOMBAY), 1992(58)ELT3(BOM)
JUDGMENT Pendse, J.
1. Rule returnable forthwith. Shri Mehta waives service on behalf of the respondents. Heard counsel.
2. The short question which falls for determination in this petition filed under Article 226 of the Constitution of India is whether there is any justification for the respondents not to implement the order passed by the Collector (Appeals) on October 4, 1988. Only few facts are required to be stated to appreciate the grievance of the petitioners.
3. The petitioners are the manufacturers of switches and fuse units, D.B. Board, spare parts, etc. The petitioners have filed refund claim for an amount of Rs. 1,51,273.40 in respect of excess duty paid for the period commencing from June 11, 1987 and ending with November 11, 1987. The petitioners claimed that excess duty was paid without taking into consideration the value of the export clearance. The refund claim was submitted on January 21, 1988. The Assistant Collector, Central Excise, directed refund of an amount of Rs. 1,22,699.75 and rejected the rest of the amount on certain grounds. The petitioners did not file appeal in respect of the claim turned down but the Department filed an appeal before the Collector (Appeals). The contention urged by the Department was that the grant of refund would result into unjust enrichment and in view of the decision of this Court in the case of M/s. Roplas (India) Limited, 1988 (38) E.L.T. 27 (Bom.), the petitioners are not entitled to any refund. The petitioners resisted the appeal by pointing out that the decision in the case of M/s. Roplas (India) Limited is no longer a good law and a catena of decisions have been delivered by this Court pointing out that the claim for refund cannot be turned down on the doctrine of unjust enrichment. This Court has held that the doctrine is not available for the authorities constituted under the Central Excise Act and the authorities are bound to refund the amount under Section 11A and 11B of the Central Excise Act. The Collector (Appeals) upheld the contention urged on behalf of the petitioners and dismissed the appeal filed by the Department by order dated October 4, 1988.
4. After the date of the decision of the Collector (Appeals), the petitioners addressed several letters to the Department demanding refund of duty. None of the letters received any response and the Department merrily declined to refund the amount. The inaction of the department gave rise to the filing of the present petition and the petitioners seek relief of implementation of the order passed by the Assistant Collector. In answer to the petition, return has been filed by Shri V. S. Bhosale, Assistant Collector of Central Excise and the only plea raised is the application of principle of unjust enrichment. There is no merit whatsoever in this plea. It has been repeatedly pointed out that the defence of unjust enrichment is not available when the duty is paid under protest. The Full Bench of this Court has held that the burden to establish that the duty was passed over to the customer is upon the Department. We enquired from Shri Mehta, learned counsel appearing on behalf of the Department, as to whether there is any material to indicate that the duty was, in fact, passed to the customer and Shri Mehta very fairly stated that there is none. In these circumstances, we are unable to find any justification for not refunding the amount to the petitioners. Shri Mehta submitted that the petitioners are entitled to the refund only of the amount which has been found due by the Assistant Collector and the petitioners cannot demand the amount which was negatived by the Assistant Collector. This submission is correct.
5. Accordingly, rule is made partly absolute and the respondents are directed to refund the amount of Rs. 1,22,699.75 to the petitioners within two weeks from today. In case, the Department fails to do so, then the amount shall be refunded with interest at the rate of 15% per annum from today till the date of repayment. The respondents shall pay the costs of the petition.