1992 (8) TMI 245 - HC - Central Excise

Summary

Issues Involved:
1. Whether the refund claim was barred by limitation u/s 11B of the Central Excises and Salt Act, 1944.
2. Whether the excess duty collected was without authority of law and thus refundable irrespective of the limitation period.

Summary of Judgment:

Issue 1: Limitation Period for Refund Claim u/s 11B

The primary issue was whether the refund application filed by the respondent was within the prescribed six-month period u/s 11B of the Central Excises and Salt Act, 1944. The Assistant Collector had rejected the refund claim on the grounds that it was time-barred, arguing that the relevant date for computing the six-month period should be the date when the provisional assessments were finalized and the demand raised. However, the Court clarified that the 'relevant date' as per Explanation (B) (f) of Section 11B is the date of payment of duty. Since the excess duty was paid between 15th January 1986 and 14th March 1986, and the refund application was filed on 28th May 1986, it was well within the six-month period.

Issue 2: Authority of Law for Excess Duty Collection

The Court also addressed whether the excess duty collected was without authority of law. It was established that the excess amount of Rs. 5,97,343.98 was neither due nor payable by the respondent as Central Excise Duty. The Court held that the realization of such excess duty was illegal and without jurisdiction. Consequently, the limitation period prescribed u/s 11B(1) did not apply to the refund of this amount. The Court emphasized that if duty has been collected unlawfully, the period of limitation for refund claims does not apply, and the authorities are obligated to refund the amount.

Conclusion:

The appeal by the Central Excise authorities was dismissed. The Court directed the Assistant Commissioner to refund the sum of Rs. 5,97,343.98 within one month from the date of communication of the order, with interest at the rate of 12% per annum from 14th December 1987 until the date of payment. The Court underscored that unauthorized collection of duty necessitates compensation for the use and retention of such money.

Order:

The Court ordered the refund along with interest and dismissed the appeal with no order as to costs.