1987 (5) TMI 34 - HC - Central Excise

Issues Involved:
1. Legality and validity of orders declining refund of Excise Duty.
2. Classification of Hydrogenated Rice Bran Oil (H.R.B.O.) under Central Excise Tariff.
3. Application of Section 11B of the Central Excises and Salt Act, 1944.
4. Doctrine of unjust enrichment in the context of refund claims.
5. Timeliness of the refund claim under Section 11B.
6. Simultaneous pursuit of multiple legal remedies.

Detailed Analysis:

1. Legality and Validity of Orders Declining Refund of Excise Duty:
The petitioner challenged the orders dated May 10, 1985, and April 29, 1986, which declined the refund of Excise Duty paid. The Assistant Collector and the Collector (Appeals) rejected the refund claim on grounds deemed "wholly untenable illegal and extraneous." The High Court quashed these orders, directing the Revenue authorities to refund the excise duty to the petitioner.

2. Classification of Hydrogenated Rice Bran Oil (H.R.B.O.) under Central Excise Tariff:
The classification of H.R.B.O. was contested. Initially, the Assistant Collector classified it under Tariff Item No. 68, attracting a higher duty rate. However, the Collector (Appeals) and CEGAT later classified it under Tariff Item No. 12, which attracted a lower duty rate. The High Court upheld this classification under Tariff Item No. 12, affirming that the duty was incorrectly levied under Tariff Item No. 68.

3. Application of Section 11B of the Central Excises and Salt Act, 1944:
Section 11B governs the refund of excise duty. The High Court emphasized that the provisions of Section 11B are clear and unambiguous, mandating the refund of excise duty paid under protest without considering equitable defenses like unjust enrichment. The court held that the Assistant Collector must refund the duty if it is determined to be non-leviable by appellate or revisional authorities.

4. Doctrine of Unjust Enrichment in the Context of Refund Claims:
The respondents argued that refunding the duty would result in unjust enrichment as the petitioner had already passed the duty burden to its customers. The High Court rejected this argument, stating that Section 11B does not allow for the consideration of unjust enrichment. The court cited numerous precedents affirming that equitable considerations cannot override clear statutory provisions.

5. Timeliness of the Refund Claim under Section 11B:
The respondents contended that the refund claim was time-barred. However, the High Court clarified that the six-month limitation under Section 11B(1) does not apply if the duty was paid under protest. Furthermore, Sub-section (3) of Section 11B, which deals with refunds following appellate or revisional orders, does not prescribe any limitation period. Thus, the refund claim was deemed timely.

6. Simultaneous Pursuit of Multiple Legal Remedies:
The respondents argued that the petitioner could not pursue both an appeal before the Tribunal and a writ petition simultaneously. The petitioner agreed to withdraw the appeal, rendering this objection moot. The High Court found no merit in this argument, allowing the writ petition to proceed.

Conclusion:
The High Court directed the Revenue authorities to refund the excise duty amounting to Rs. 1,31,04,811.89 to the petitioner by June 20, 1987, and awarded costs of Rs. 1,000/- to the petitioner. The judgment emphasized the clear and unambiguous language of Section 11B, ruling out the application of the doctrine of unjust enrichment in the context of statutory refunds.

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