1995 (3) TMI 106 - HC - Central Excise

Summary

Issues:
1. Refund of excise duty paid by the petitioner.
2. Interpretation of Section 11B of the Central Excises & Salt Act, 1944 regarding refund procedures.
3. Application of the amended Section 11B(2) of the Act to pending refund claims.
4. Legal implications of previous orders for refund in light of the amended provision.

Analysis:
The petitioner sought a refund of excise duty paid, claiming that the Department had directed the refund on a previous date, which was not disputed by the Department. The petitioner's customer had reversed the Modvat credit and recovered the amount from the petitioner, supporting the refund claim. The Revenue argued that refunds must strictly adhere to Section 11B(2) of the Act post-amendment, requiring the Assistant Commissioner to reassess the claim based on the new criteria.

The Revenue relied on the amended Section 11B of the Act, emphasizing that refunds should align with the revised provisions. Citing a Supreme Court decision, it was argued that the amended Section 11B applies retrospectively to all pending refund applications and earlier refund orders, necessitating compliance with the new regulations.

Conversely, the petitioner contended that the refund order had become final before the amendment came into force, citing a Calcutta High Court judgment to support their argument. They also referenced a Supreme Court case to highlight the impact of finality on refund claims under amended provisions. The petitioner sought implementation of the existing order rather than a reassessment under the amended Section 11B(2).

The Court, guided by the Supreme Court's precedent, clarified that post-amendment, refunds must adhere to the amended Section 11B(2) without exception. The objective of the amendment was to ensure refunds were made in line with the revised provisions, superseding any previous orders or directions. Therefore, the Assistant Commissioner was directed to evaluate the petitioner's refund claim based on the criteria in Section 11B(2) despite prior orders affirming the refund.

The Court ordered the Assistant Commissioner to review and decide on the refund claim within eight weeks, emphasizing the need for compliance with the amended provisions. If found eligible, the respondent was directed to process the refund promptly. The writ petition was granted in favor of the petitioner, emphasizing the importance of adhering to the amended refund procedures under Section 11B(2) of the Act.