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Issues Involved:
1. Applicability of Rule 11 of the Central Excise Rules 2. Period of Limitation for Refund Claims 3. Doctrine of Unjust Enrichment 4. Role of Writ Court in Granting Relief Detailed Analysis: 1. Applicability of Rule 11 of the Central Excise Rules The petitioner, a manufacturer of Vanaspati and Soap, claimed a refund of excise duty paid by mistake under Rule 11 of the Central Excise Rules. The rule, as it stood, required that any claim for refund due to inadvertence, error, or misconstruction must be filed within three months from the date of payment. The petitioner argued that Rule 11 should not apply as the payment was not made due to error or inadvertence but rather due to ignorance of the exemption notification. The court, however, found that the payment was indeed made under a mistake arising from ignorance, making Rule 11 applicable. 2. Period of Limitation for Refund Claims The court examined whether the three-month limitation period under Rule 11 should apply or whether the general three-year period under the Limitation Act should govern the refund claim. The petitioner contended that the claim should be governed by Section 72 of the Contract Act, which allows for a three-year limitation period from the date of knowledge of the mistake. The court noted that Rule 11 provided a specific remedy with a specific limitation period, which was three months from the date of payment. However, the court also acknowledged that the petitioner only became aware of the right to a refund upon receiving a letter from the Accountant General, and thus filed the claim beyond the prescribed period. 3. Doctrine of Unjust Enrichment The respondents argued that the petitioner had already passed on the burden of the excess duty to its customers, invoking the doctrine of unjust enrichment. The court reviewed various precedents, noting that different High Courts in India have taken inconsistent views on this issue. The Bombay High Court had generally held that a refund claim cannot be defeated on the ground of unjust enrichment, while other courts like the Madras, Delhi, and Gujarat High Courts had taken a contrary view. The court ultimately found that the doctrine of unjust enrichment should not bar the refund claim in this case. 4. Role of Writ Court in Granting Relief The court discussed the role of the High Court under Article 226 of the Constitution in granting relief in cases where statutory remedies are time-barred. It referred to several Supreme Court decisions, noting that while the High Court should respect statutory limitations, it should also act as a court of equity to prevent genuine claims from being defeated due to technicalities. The court concluded that in this case, the petitioner did not intentionally allow the claim to become time-barred and that the writ court should intervene to grant relief. Conclusion: The court allowed the writ petitions, directing the respondents to refund the excess excise duties to the petitioner within sixty days. The judgment emphasized that while statutory limitations should generally be respected, the writ court has the discretion to grant relief in appropriate cases to prevent genuine claims from being unjustly barred. The decision also clarified that the doctrine of unjust enrichment should not automatically defeat a refund claim when the duty was collected without legal authority.
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