2010 (1) TMI 692 - HC - Central Excise

Refund - Exports of garments on payment of a premium - public notice bearing No. 28-ETC(PN)/87 dated 15th October, 1987 - if the demand of premium is itself unconstitutional as held by the Division Bench and in any case contrary to the Import and Export Control Act, 1947 and Export (Control) Order, 1988, the Appellant could not have, in the first place, even taken the amount from the Respondents - ordinarily even a suit for recovery would not have been entertained after a gap of three years - Respondents were entitled to a refund of the amount of premium collected from them along with interest @ 10% per annum with effect from 22nd February, 1989 till the date of payment.

Summary

Issues:
Challenging a public notice on export policy and premium payment legality, entitlement to refund of premium, unjust enrichment, delay in seeking refund.

Analysis:
In a batch of four appeals, the Union of India challenged a common judgment regarding a public notice issued in 1987 setting up a quota distribution scheme for garment exports. The Respondents challenged the requirement of paying a premium under this scheme. A Division Bench previously held that the premium charged was impermissible under relevant laws and violated fundamental rights. The Supreme Court later dismissed the Union's appeal, leaving questions open for future consideration. The Respondents sought a refund of the premium paid, and the Single Judge ordered the refund with interest, following the Division Bench's decision.

The Union contended that refunding the premium would unjustly enrich the Respondents, but the Single Judge rejected this argument due to lack of evidence of benefits received by the Respondents. The High Court noted that the Division Bench's decision was final and declined to reopen the matter. Refunding the premium was deemed necessary as it was unlawfully collected and not supported by law. The High Court cited a Supreme Court ruling that refunds are applicable for amounts collected under a mistake of law. The Union was directed to refund the premium with simple interest.

In a separate appeal, the High Court considered a delay in seeking a refund. The Respondents claimed they were unaware of the legal developments until 1999, justifying the delay in filing a writ petition in 2000. However, the Court found the delay unreasonable, especially considering the common cause taken up by garment exporters and the long gap between legal decisions and the refund request. Consequently, the Court set aside the Single Judge's decision in this specific appeal.

In conclusion, the High Court upheld the refund of the premium to the Respondents in three appeals, emphasizing the unlawfulness of the premium collection. However, in the appeal involving a significant delay in seeking a refund, the Court ruled against the Respondents due to the unreasonable delay in approaching the Court. All appeals were disposed of accordingly.