1982 (4) TMI 69 - HC - Central Excise

Valuation - Determination of assessable value - Writ jurisdiction - Illegal levy is refundable - Duty wrongly collected - Illegal Levy

Summary

Issues:
- Claim for refund of excess excise duty paid due to misconstruction of law.
- Interpretation of Section 4 of the Central Excises and Salt Act, 1944.
- Application of Rule 11 of the Central Excise Rules.
- Consideration of time limitation for filing refund applications.
- Legal right to claim refund of excess duty paid without authority of law.

Detailed Analysis:

1. Claim for Refund of Excess Excise Duty:
The petitioners sought a writ of certiorari to quash an order dismissing their appeals for refund of excess excise duty paid due to a misconstruction of Section 4 of the Central Excises and Salt Act, 1944. The Appellate Collector allowed some refund applications but disallowed others, citing the duty was paid based on a wrong understanding of the law before the Supreme Court's ruling in "Voltas case."

2. Interpretation of Section 4 of the Act:
The petitioners contended that their assessment under Section 4(a) should have been based on the prices charged to wholesale buyers, not to secondary wholesalers. The Appellate Collector acknowledged the previous misconstruction by various High Courts and ruled in line with the Supreme Court's interpretation in the "Voltas case," stating that the correct basis of assessment is the price charged by the manufacturer to wholesale buyers.

3. Application of Rule 11 of the Central Excise Rules:
The Appellate Collector invoked Rule 11, stating that the duty payment was made through misconstruction under the rule due to a wrong understanding of Section 4 of the Act. This led to the disallowance of refund applications for the earlier period, deeming them time-barred under the limitation provision.

4. Consideration of Time Limitation for Refund Applications:
The judgment considered the time limitation for filing refund applications in light of the Appellate Collector's ruling. It was argued that the petitioners' right to claim a refund of excess duty paid without authority of law should not be defeated by a mere limitation in the Act or the Rules, especially when the duty was collected outside the provisions of the law.

5. Legal Right to Claim Refund of Excess Duty Paid Without Authority of Law:
Citing precedents like "Premraj and Ganpatraj & Company (P) Ltd. v. Assistant Collector of Customs" and "Patel India (Private) Ltd. v. Union of India," the judgment emphasized the legal right of parties to claim a refund of excess duty paid without authority of law. The court issued a mandamus directing the respondents to refund the excess excise duty paid by the petitioners within a specified period.

In conclusion, the High Court allowed the writ petition, directing the refund of the excess excise duty paid by the petitioners due to a misconstruction of the law, emphasizing the correct interpretation of Section 4 of the Act and the legal right to claim a refund of duty paid without authority of law.