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1987 (12) TMI 33 - HC - Central Excise
Issues Involved:
Difference of opinion on whether Excise authorities are liable to refund excess excise duty collected without authority of law or claim can be refused on the doctrine of unjust enrichment. Summary: Issue 1: Claim for Refund of Excess Excise Duty The petitioners, a company manufacturing ball and roller bearings and textile machinery components, filed a petition seeking refund of excess excise duty collected under Tariff Item No. 49, contending that the components should be classified under Tariff Item No. 68. The dispute arose from the duty paid under protest between 1972 and 1979. The Central Government's order held the petitioners liable to pay the duty, leading to the petition seeking refund and setting aside of various notices and demands. Issue 2: Doctrine of Unjust Enrichment The Department resisted the refund claim on the grounds of unjust enrichment, arguing that refunding the duty would not benefit the customers as the duty had already been passed on to them. Mr. Justice Shah's judgment rejected the application of unjust enrichment, citing previous decisions that Revenue is liable to refund duty collected without authority of law. However, Mr. Justice Kolse-Patil differed, relying on the doctrine of unjust enrichment and a specific Division Bench decision, dismissing the petition and refusing the refund claim. Resolution: The Court found that the petitioners were entitled to a refund under Section 11B and Rule 11 of the Central Excise Rules, despite the Department's argument of unjust enrichment. Mr. Justice Kolse-Patil's decision was deemed erroneous, as it contradicted numerous previous decisions rejecting the plea of unjust enrichment. The final order granted the refund as per prayers (a)(i) and (a)(iii), with the additional relief of prayer (b) also being granted. The Department was directed to make the refund within three months. The difference in opinions was resolved in favor of granting the refund, emphasizing the statutory entitlement of the petitioners. The matter was referred back to the Division Bench for final orders, with costs to be determined by the Bench.
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