1992 (3) TMI 70 - HC - Central Excise

Summary

Issues:
1. Claim of refund of excess excise duty paid by mistake of law due to ignorance of exemption.
2. Constitutionality of provisions of the Central Excise Laws (Amendment and Validation) Act, 1982.

Analysis:
1. The petitioners, a Public Limited Company engaged in processing partially oriented yarn, claimed a refund of Rs. 68,69,215.04. They contended that they were unaware of an exemption under Notification No. 28/75, leading to the incorrect calculation of excise duty. The petitioners argued that they overpaid Rs. 42,76,729.51 due to additional excise duty and special duty of excise, and Rs. 25,92,485.53 concerning the basic duty based on denier counts. The court acknowledged the mistake and held that the petitioners were entitled to a refund of the amount paid in excess.

2. The petitioners also sought a declaration that the provisions of the Central Excise Laws (Amendment and Validation) Act, 1982 were unconstitutional. However, their counsel conceded that this claim was no longer valid based on previous court decisions. The court noted that the claim for refund due to ignorance of the exemption under Notification No. 28/75 was justified. The petitioners had erroneously paid duty at a higher rate, and the court directed the Department to refund the excess amount after verifying the calculations.

3. The Department argued that the enactment of Central Act No. 40/91 affected the petitioners' entitlement to seek actual payment of the refund. The court decided not to delve into the applicability of the Act in the current case. It limited the relief to declaring the petitioners' right to a refund and left it to the Department to determine the impact of Act No. 40/91 on the refund process. The court directed the Department to verify the accuracy of the claimed refund amount and decide on the actual refund after proper notice to the petitioners.

4. The court partially upheld the petition, granting the refund of excise duty overpaid by the petitioners. The Department was instructed to verify the refund amount and decide on the actual payment considering the provisions of Central Act No. 40/91. The claim for refund of Rs. 42,76,729.51 was rejected, and no costs were awarded in the case.