1991 (8) TMI 90 - HC - Central Excise

Summary

Issues Involved: Validity of the order dated 9-12-1975, refund of excess excise duty, limitation period, mistake of law, unjust enrichment.

Issue-wise Detailed Analysis:

1) Whether the petitioners are entitled to challenge the impugned order of the 2nd respondent after the statutory appeal against the said order was dismissed as not pressed:

Admittedly, the petitioners requested the assessment of cigarettes to Central Excise duty on the price they charged, which was approved on 7-8-1973. They claimed a refund based on the Supreme Court's judgment in the Voltas case, asserting the duty was paid under a mistake of law. However, the 1st respondent rejected the refund claim on merits, stating the company had requested and accepted the distributor's price as the assessable value and had collected the duty from consumers. The 2nd respondent also dismissed the appeal on merits, stating the price fixed did not include post-manufacturing expenditure. The petitioners' revision was transferred to CEGAT, where it was dismissed as not pressed. The impugned order of the 2nd respondent merged into the CEGAT's order, thus the petitioners cannot question it in this writ petition.

2) Whether the claim of the petitioners for refund of the excise duty for the period 1-10-1972 to 30-9-1973 is barred by limitation and whether the writ petition is also liable to be dismissed on the ground of laches:

The petitioners argued that the excise duty was paid under a mistake of law and relied on the Supreme Court's judgment in D. Cawasji and Co. v. State of Mysore, which stated that the limitation period for recovering money paid under a mistake of law is three years from the date the mistake was known. However, the petitioners discovered the mistake after the Voltas judgment on 1-12-1972 and filed the writ petition on 17-4-1985, which is beyond the limitation period. The writ petition is barred by laches as it was filed after about 12 years of discovering the mistake of law. The subsequent Supreme Court judgment in the Bombay Tyres case does not alter this fact. Therefore, the writ petition is barred by laches.

3) Whether the claim of refund would result in unjust enrichment of the petitioners; if so, is it liable to be rejected:

The petitioners did not clearly state that the burden of excise duty was not passed to consumers. The 1st respondent found that the company collected the excise duty from consumers and did not suffer any loss. The question of unjust enrichment arises, but given the findings on the first two issues, it is unnecessary to decide this question in this writ petition.

Conclusion:

The writ petition is dismissed with costs, as the petitioners cannot challenge the impugned order after the statutory appeal was dismissed as not pressed, the claim for refund is barred by limitation and laches, and the question of unjust enrichment is not addressed due to the findings on the first two issues. The application for leave to appeal to the Supreme Court is refused as the matter does not involve any substantial question of law of general importance.