1984 (3) TMI 64 - SC - Central Excise

Whether the appellants are entitled to claim refund of excess excise duty which had been paid by them prior to February 20, 1976 and if so, whether they are entitled to claim refund of such duty paid between October 1, 1963 and February 20, 1976 or during any shorter period? Held that - We modify the judgment and order passed by the High Court by quashing the assessments of excise duty made in respect of the goods in question other than wired glass viz. figured glass, coloured figured glass, rolled glass and coolex wired glass for the period between September 28, 1973 and February 20, 1976 also and directing the assessing authority to make a fresh assessment in accordance with law in the light of the decision of the High Court. The respondents are further directed to refund after such fresh determination any excess duty that may be found to have been paid by the appellants. The fresh assessments shall be completed within four months from today. The appeal is however, dismissed in so far it relates to the claim for refund of excess duty paid in respect of wired glass during that period. Appeal allowed in part.

Summary

Issues Involved:
1. Entitlement to refund of excess excise duty paid prior to February 20, 1976.
2. Applicability of refund to all goods in question.

Issue-wise Detailed Analysis:

1. Entitlement to Refund of Excess Excise Duty Paid Prior to February 20, 1976:
The appellants, a company engaged in manufacturing various types of glass, contested the excise duty levied on their products under Item 23A(1) of the First Schedule to the Central Excises and Salt Act, 1944. They argued that their products should fall under Tariff Item 68, which was introduced on March 1, 1975. The Assistant Collector of Central Excise rejected their refund claim, but the High Court later ruled in favor of the appellants, classifying the goods under Tariff Item 68 and directing a refund for the period after February 20, 1976. The Supreme Court considered whether the appellants were entitled to a refund for the period between October 1, 1963, and February 20, 1976. The Court noted that the appellants had paid excess duty under a mistaken belief, which could have been challenged within the limitation period prescribed by law. The Court held that refunds for payments made beyond three years from the date of the first writ petition (filed on September 28, 1976) were not warranted due to estoppel and acquiescence. However, the Court allowed refunds for excess payments made between September 28, 1973, and February 20, 1976.

2. Applicability of Refund to All Goods in Question:
The appellants sought refunds for various types of glass, including figured glass, wired glass, colored figured glass, rolled glass, and coolex wired glass. The High Court had ruled that these products did not fall under Item 23A(1) but under Item 68. The Supreme Court differentiated the case of wired glass, where a previous government order had accepted the appellants' classification under Item 23A(1). Consequently, the Court rejected the refund claim for wired glass prior to February 20, 1976, as the appellants had paid duty based on their own earlier stand. For other types of glass, the Court upheld the High Court's decision, directing fresh assessments and refunds for excess payments made between September 28, 1973, and February 20, 1976.

Judgment:
The Supreme Court modified the High Court's judgment, quashing the assessments of excise duty for figured glass, colored figured glass, rolled glass, and coolex wired glass for the period between September 28, 1973, and February 20, 1976. The assessing authority was directed to make fresh assessments and refund any excess duty found. The appeal was dismissed concerning the refund claim for wired glass during the specified period. The appeal was allowed in part, with no costs awarded.