1991 (7) TMI 91 - HC - Central Excise

Summary

Issues:
1. Refund of excise duty paid under protest for the years 1978-79 to 1990-91.
2. Delay in refund despite Tribunal's order in favor of the petitioner.
3. Dispute over the classification of manufactured bars as flats for excise duty.
4. Lack of justification by the respondents for not refunding the amount.
5. Argument by respondents that duty may have been passed on to consumers.
6. Legal obligation of authorities to refund illegally recovered excise duty.

Analysis:

1. The petitioner, engaged in manufacturing iron and steel products, paid excise duty under protest amounting to Rs. 77,98,212.89 for the years 1978-79 to 1990-91. The petitioner sought a refund of this amount along with interest at 15% through a writ petition.

2. Despite the Tribunal's acceptance of the petitioner's revision petition and the subsequent order in favor of the petitioner dated July 14, 1986, the respondents failed to refund the excise duty paid. The petitioner pursued legal remedies promptly, and the respondents did not obtain a stay order against the refund.

3. The dispute arose from the classification of bars manufactured by the petitioner, which were considered as flats for excise duty purposes. The Tribunal's order clarified the classification, supporting the petitioner's claim that the bars should be assessed under a specific tariff item.

4. The respondents, in their reply, failed to provide a valid justification for not refunding the excise duty to the petitioner. The petitioner's claim was substantiated by legal proceedings and the Tribunal's decision, indicating the illegality of the recoveries made by the department.

5. The respondents argued that the petitioner might have passed on the burden of excise duty to consumers. However, this argument was not supported by evidence or mentioned in the written statement, making it inappropriate to consider without proper pleading.

6. The judgment highlighted the legal obligation of authorities to refund illegally recovered excise duty promptly and without causing undue harassment to the petitioner. The court directed the respondents to refund the excise duty paid by the petitioner within two months, failing which interest at 12% would be applicable.

This detailed analysis of the judgment emphasizes the issues involved, the legal arguments presented by both parties, and the court's decision based on the facts and legal principles outlined in the case.