1987 (11) TMI 81 - HC - Central Excise

Issues Involved:
1. Validity of the rejection of the refund application by the Assistant Collector of Central Excise.
2. Effective date of the withdrawal of the exemption notification.
3. Requirement of publication for the notification to be effective.
4. Exhaustion of statutory remedies before approaching the court.
5. Entitlement of the petitioners to a refund for the period before the notification was made available to the public.

Detailed Analysis:

1. Validity of the rejection of the refund application by the Assistant Collector of Central Excise:
The petitioners challenged the order passed by the Assistant Collector of Central Excise, which rejected their application for a refund of Rs. 54,40,642.71. The Assistant Collector's rationale was based on a judgment by the High Court of Judicature at Madras, which had been stayed by a Division Bench, rendering it inoperative for the petitioners' claim. Additionally, the Assistant Collector noted that there was no evidence that the notification was not published in the Gazette on 30th November 1982, and according to Section 38 of the Central Excises and Salt Act, 1944, and Rule 8 of the Central Excise Rules, 1944, the notification was effective from the date of publication in the Official Gazette.

2. Effective date of the withdrawal of the exemption notification:
The petitioners argued that the exemption withdrawal should take effect from the date the notification was made available to the public, which was 8th December 1982, as per the letter from the Controller of Publications. The respondents contended that the notification was effective from 30th November 1982, the date it was published in the Official Gazette, irrespective of when it was made available to the public.

3. Requirement of publication for the notification to be effective:
The court examined the requirement of publication under Section 38 of the Central Excises and Salt Act and Rule 8 of the Rules. The court referenced several judgments, including Johnson v. Sargant and Sons and B.K. Srinivasan v. State of Karnataka, to establish that mere printing of the notification does not equate to publication. For a law to be effective, it must be made known to those governed by it. The court concluded that the notification was effectively published when it was made available for sale to the public on 8th December 1982.

4. Exhaustion of statutory remedies before approaching the court:
The respondents argued that the petitioners should have exhausted the statutory remedy of filing an appeal before approaching the court. The court dismissed this contention, stating that the petition raised a pure question of law, and given the time elapsed since the filing of the petition, it was not appropriate to direct the petitioners to pursue statutory remedies.

5. Entitlement of the petitioners to a refund for the period before the notification was made available to the public:
The court held that the petitioners could not be penalized for the period between 30th November 1982 and 7th December 1982, as the notification was not available to the public until 8th December 1982. The court cited the case of G. Narayana Reddy v. State of Andhra Pradesh, which supported the view that a notification could not be enforced before it was made available to the public. Consequently, the court directed the respondents to refund the excess amount collected for this period, amounting to Rs. 35,57,094.74, along with interest at the rate of 6% per annum from the date of the judgment until payment.

Conclusion:
The court partially allowed the petition, directing the respondents to refund the excess amount collected from the petitioners for the period from 30th November 1982 to 7th December 1982, along with interest. The rule was made absolute in these terms, and the respondents were ordered to complete the refund within four months from the date of the judgment.

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