1984 (4) TMI 59 - HC - Central Excise

Refund - Change law not given retrospective effect - Refund of duty paid under mistake of law - Writ jurisdiction - Statute

Summary

Issues Involved:
1. Refund of excise duty paid by mistake.
2. Applicability of old Rule 11 vs. new Rule 11.
3. Limitation period for claiming refunds.
4. Jurisdiction of High Court under Article 226 of the Constitution of India.

Detailed Analysis:

1. Refund of Excise Duty Paid by Mistake:
The petitioner, a private limited company, claimed refunds for excise duty paid on non-alcoholic aerated waters ('Coca Cola' and 'Fanta') at a higher rate of 20% ad valorem instead of the correct rate of 10% ad valorem. The petitioner realized the mistake upon receiving a letter from Coca Cola Export Corporation on 11-7-1977, which included a court decision indicating that the products did not contain blended flavoring concentrates and were thus not subject to the higher duty.

2. Applicability of Old Rule 11 vs. New Rule 11:
The petitioner argued that old Rule 11, which was in force at the time of payment, should apply to their refund claims, not the new Rule 11. The old Rule 11 required claims to be made within three months of payment. The new Rule 11, effective from 6-8-1977, extended this to six months but was argued to be prospective and not applicable to claims for payments made before its enforcement.

3. Limitation Period for Claiming Refunds:
The court examined whether the limitation period should start from the date of payment or the date of discovery of the mistake. The petitioner claimed that the limitation period should begin on 13-7-1977, the date they received the letter from Coca Cola Export Corporation. The court agreed, stating that the petitioner could not have known about the mistake before this date due to the secret formula used by Coca Cola Export Corporation.

4. Jurisdiction of High Court under Article 226 of the Constitution of India:
The court held that the petitioner could seek relief under Article 226 for the refund of excise duty paid by mistake. The court emphasized that the jurisdiction under Article 226 is discretionary and not barred by the Limitation Act. The court further noted that the claim for refund was genuine and not disputed on merits by the respondents.

Conclusion:
The court directed the respondents to grant refunds to the petitioner for the excess excise duty paid during the specified periods. The refunds amounted to Rs. 16,48,287.13 for the period from August 1974 to August 1976 and Rs. 73,233.74 for the period from 8-9-1976 to 24-2-1977. The payment of refunds was ordered to be made within three months from the date of the judgment. The court made the rule absolute without any order as to costs.