1990 (12) TMI 88 - HC - Central Excise

Summary

Issues:
1. Claim for refund of duty under Central Excises and Salt Act, 1944.
2. Barred by limitation under Rule 11 read with Section 11B.
3. Legality of duty collection and subsequent exemption clarification.
4. Judicial precedents on illegal tax collection and refund.
5. Unjust enrichment and passing on of duty burden.
6. Jurisdiction of High Court under Article 226 for refund claims.

Analysis:

1. The petitioner, a public limited company manufacturing steel ingots, sought a refund of duty amounting to Rs. 65,868.11 under the Central Excises and Salt Act, 1944. The duty was imposed by Notification No. 156/79 at the rate of Rs. 100/- per metric ton on steel ingots produced in mini plants like the petitioner's after 9-4-1979.

2. The claim for refund was rejected by the first respondent citing limitation under Rule 11 read with Section 11B of the Act. The petitioner's subsequent appeals to the Appellate Collector and the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) were also dismissed, leading to the present petition before the High Court.

3. The petitioner argued that although the claim for refund was time-barred, the duty collection was illegal as clarified by the Government's subsequent exemption for steel ingots manufactured before 9-4-1979. Citing Supreme Court judgments, the petitioner contended that illegal tax collection should be refunded, especially after the Government's clarification in October 1980.

4. The respondents relied on the Division Bench judgment in Madras Aluminium Co. Ltd. v. Union of India, emphasizing that directing a refund may result in unjust enrichment if the duty burden was passed on to consumers. They also highlighted a recent judgment where parties were directed to seek remedy in a Civil Court for refund claims based on contractual principles.

5. The Court acknowledged the petitioner's claim but found that ordering a refund might lead to unjust enrichment as the duty burden could have been passed on to consumers. Considering the factual questions and principles of unjust enrichment, the Court rejected the petition under Article 226 of the Constitution of India.

6. The Court dismissed the writ petition, allowing the petitioner to pursue its claim before the Assistant Collector based on a judgment of the Karnataka High Court. No costs were awarded in the matter.