Bombay High Court
Weikfield Products Company (India) ... vs Union Of India on 10 September, 1990
Equivalent citations: 1991(51)ELT323(BOM)
JUDGMENT Pendse, J.
1. Petitioner No. 1 is a private limited company registered under the Companies Act, 1956 and manufacturing drinking chocolate powder which is liable to payment of excise duty under T.I. No. 1A of the First Schedule to the Central Excises & Salt Act, 1944 (hereinafter referred to as the 'Act'). The Government of India published notification dated April 30, 1968 exempting drinking chocolate powder from whole of excise duty for the first 20 metric tons clearance, provided the total clearance during the financial year did not exceed 40 metric tons. For the financial year March 1, 1973 to March 31, 1974, the company cleared the goods and paid excise duty at the full rate. At the end of the financial year, the company had not cleared goods in excess of 40 metric tons and was, therefore, entitled to the advantage of exemption notification. Accordingly, the company filed refund application dated 30-11-1974 before the Asstt. Collector of Central Excise, Pune, demanding refund of Rs. 27,038.32.
2. The Asstt. Collector by order dated February 28, 1975 granted refund only for the sum of Rs. 13,090.94 on the ground that the balance claim of refund was not admissible in view of the provisions of Rule 11 read with Rule 173-J of the Central Excise Rules, 1944. The Asstt. Collector held that the refund application was filed on November 30, 1974 and, therefore, the claim is admissible only for period from December 1, 1973 to March 31, 1974. The rest of the claim is barred. The order passed by the Asstt. Collector was confirmed in appeal by the Collector of Central Excises (Appeals), Bombay, by order dated February 13, 1976. The petitioners carried revision before the Government of India, Ministry of Finance, Department of Revenue, but the revision ended in dismissal by order dated January 25, 1980. The orders passed by the three authorities below rejecting a part of the claim for refund on the ground of limitation is under challenge in this petition filed under Article 226 of the Constitution.
3. Mr. Parikh, learned counsel appearing for the petitioners, submitted that all the three authorities below are in error in declining to grant the reliefs sough by the petitioners by reference to Rule 11 of the Central Excise Rules. The learned counsel urged that the view taken by the authorities would deprive the advantage of exemption notification to the manufacturer. It was also contended that even assuming that Rule 11 is applicable, the bar of limitation is not available to the department in a proceeding under Article 226 of the Constitution. The submission is correct and deserves acceptance. As mentioned hereinabove, the exemption is available to the manufacturer provided the clearance of the goods during the financial year did not exceed 40 metric tons. The manufacturer can avail of the exemption only at the end of the financial year on realisation that the clearance has not exceeded 40 metric tons. In other words, the right to claim exemption accrues only at the end of the financial year and in the present case on April 1, 1974. It is not in dispute that the refund application was filed on November 30, 1974 and, therefore, the application could not have been partly rejected on the ground of limitation. Mr. Desai, learned counsel appearing for the respondents, submitted that the petitioner should have paid the duty during the financial year under protest. It is impossible to accede to the submission. The question of payment of duty under protest did not arise because the manufacturer was not disputing the rate of duty or liability to pay. The manufacturer could claim exemption only at the end of the financial year and, therefore, there was no question of paying duty under protest.
Mr. Desai submitted that the claim of refund by the petitioners amounts to unjust enrichment as the petitioners have already passed on the duty to the customers and the petitioners are not going to return the duty back to the customers after obtaining refund. Mr. Desai very fairly stated that the requisite data for examining this claim as laid down by the Full Bench of this Court in New India Industries Ltd. v. Union of India [1990 (46) E.L.T. 23] is not produced by the department by filing proper return. In absence of data, it is not possible to examine the submission of the learned counsel. In our judgment, the orders passed by the three authorities below declining refund as claimed by the petitioners cannot be sustained and the petition must succeed.
4. Accordingly, order dated February 28, 1975 passed by the Asstt. Collector of Central Excise, Pune, declining to refunds the duty collected between March 1, 1973 and December 31, 1973 and the order passed by the Collector of Central Excise (Appeals), Bombay, on February 13, 1976 confirming the order of the Asstt. Collector and the order dated January 25, 1980 passed by the Additional Secretary to the Government of India in revision are set aside and the Asstt. Collector is directed to grant refund to the petitioners for the period commencing from March 1, 1973 and ending with December 31, 1973 in respect of payment of excise duty on clearance of drinking chocolate powder. The Asstt. Collector shall refund the duty on or before December 31, 1990. In case the Asstt. Collector fails to do so, then the duty shall be paid along with interest at the rate of 15 per cent. per annum payable from today till the date of actual refund. In the circumstances of the case, there will be no order as to costs.