2012 (7) TMI 1039 - HC - Central Excise

Refund claim - excise duty paid which was not required to be paid - denial on account of time limitation - Held that - the money belonging to the Kerala State Electricity Board has been unjustly retained by the 2nd respondent I am inclined to grant the reliefs prayed for in this writ petition - petition allowed.

Summary

Issues involved:
Refund of excise duty paid by the 3rd respondent for materials purchased for execution of a contract with the Kerala State Electricity Board, rejection of claim as barred by limitation under Section 11-B of the Central Excise and Salt Act, 1944.

Analysis:

1. Refund of excise duty:
The petitioner, Kerala State Electricity Board, filed a writ petition seeking a refund of excise duty paid by the 3rd respondent for materials purchased for a contract with the Board. The 3rd respondent paid excise duty on the purchased goods, unaware of the exemption provided under the Central Excise and Salt Act, 1944. The petitioner contended that the excise duty paid by the 3rd respondent, although the assessee, is ultimately reimbursed by the Board as per the contract terms. The Board withheld the amount, leading the 3rd respondent to file a suit and obtain a decree for payment. The petitioner argued that the refund application was filed within the three-year limitation period from the date of knowledge of the mistake, citing relevant legal precedents to support their claim. The Court, noting the uncontroverted contention and absence of arguments against the petition, directed the 2nd respondent to refund the excise duty amount to the 3rd respondent, who, in turn, was instructed to reimburse the Board promptly.

2. Limitation under Section 11-B:
The 2nd respondent had rejected the refund claim citing limitation under Section 11-B of the Central Excise and Salt Act, 1944. However, the petitioner argued that the refund application was timely filed within three years from the date of realizing the mistake in paying excise duty. The Court, considering the petitioner's contentions and absence of any counter-arguments, held in favor of the petitioner, emphasizing that the money unjustly retained by the 2nd respondent belonged to the Kerala State Electricity Board. The Court's decision to grant the reliefs sought in the writ petition was influenced by various legal decisions relied upon by the petitioner to support their case.

In conclusion, the Kerala High Court, in the judgment delivered by Justice S. Siri Jagan, allowed the writ petition filed by the Kerala State Electricity Board, directing the refund of excise duty paid by the 3rd respondent for materials purchased for a contract with the Board. The Court emphasized the reimbursement obligation of the 3rd respondent towards the Board and highlighted the importance of timely filing the refund application within the statutory limitation period. The judgment underscored the rightful ownership of the money retained by the 2nd respondent, ultimately ruling in favor of the petitioner based on the legal arguments presented and relevant precedents cited.