1992 (10) TMI 101 - HC - Central Excise

Summary

Issues: Refund claim under Central Excise Act, applicability of limitation under Section 11B, ignorance of exemption notification, authority of law for duty recovery, burden of proof on petitioners.

Analysis:
1. The petitioners, a Public Limited Company, sought a refund of excise duty paid under Tariff Item No. 68 of the Central Excise Act, claiming ignorance of an exemption notification issued by the Government in April 1975. The Assistant Collector rejected the refund claim for the period from May 1975 to July 1982 citing limitation under Section 11B of the Act.

2. The Court acknowledged that while the Assistant Collector is bound by statutory limitation provisions, the Court exercising writ jurisdiction is not similarly bound. It was held that recovery of duty under a mistake of law or ignorance of an exemption notification is unauthorized. The petitioners contended they were unaware of the exemption notification, which the Department failed to refute. The Court found the petitioners' claim of ignorance credible and set aside the Assistant Collector's order, directing a review of the refund claim on its merits without considering limitation.

3. The Court emphasized the heavy burden on the petitioners to prove ignorance of the exemption notification. Despite the Department's failure to challenge the claim or provide evidence against it, the Court accepted the petitioners' assertion of ignorance due to the absence of contradictory material. The order mandated the Assistant Collector to reevaluate the refund claim without limitation constraints and consider the amended provisions of Section 11B if the refund is deemed appropriate.

4. Consequently, the petition succeeded, and the Assistant Collector's decision rejecting the refund claim for the period from May 1975 to July 1982 was overturned. The matter was remanded to the Assistant Collector for a fresh determination without limitation considerations. The Court clarified that costs were not applicable in this instance, emphasizing the importance of establishing ignorance of exemption notifications in excise duty refund claims.