1997 (6) TMI 31 - HC - Central Excise

Refund - Reversal of - Writ jurisdiction - Appeal - Alternative remedy - Interpretation of statute

Summary

Issues:
- Classification under Central Excise Tariff
- Refund claim and appellate review
- Interpretation of Section 11A and 11B of the Central Excise Act
- Authority's power to direct recredit of refunded amount

Classification under Central Excise Tariff:
The Writ Petitioners sought reclassification under T.I. 26A(IV) of the Central Excise Tariff, which was approved by the Superintendent. However, the 3rd respondent later set aside the order of refund issued by the 2nd respondent, directing the petitioners to recredit the refunded amount. The impugned order was based on the premise that the duty was paid based on an approved classification list, and thus, the period of limitation under Section 11B of the Act should have been strictly applied.

Refund claim and appellate review:
The appellant filed a Writ Petition seeking to quash the order of the 3rd respondent that set aside the refund order issued by the 2nd respondent. The Single Judge found the 3rd respondent's order justified and legal, rejecting the petitioner's contention that Section 11A of the Central Excise Act should be read into the power of review under Section 35E. The appeal against this decision was based on the argument that the appellate authority cannot direct recrediting of the refunded amount without invoking Section 11A.

Interpretation of Section 11A and 11B of the Central Excise Act:
The appellant's argument centered on Section 11A(1) for recovery of duties and Section 11B for refund of duty, emphasizing that once a classification is approved, the assessee is entitled to pay duty based on that classification unless a review is undertaken under Section 35E. The appellant contended that the appellate authority's reclassification does not automatically enable the original authority to demand payment without issuing a show cause notice under Section 11A. However, the Court did not delve into this argument, stating it was not relevant to the case at hand.

Authority's power to direct recredit of refunded amount:
The Court upheld the 3rd respondent's decision to set aside the refund order and direct recrediting of the amount, emphasizing that the law must be interpreted to serve justice. The Court rejected the appellant's argument that recrediting required the original authority to invoke Section 11A, stating that when one legal remedy is chosen, it does not render it illegal as long as it is permitted by law. The Court concluded that the direction to recredit the amount was a natural consequence of the appellate authority's decision, dismissing the writ appeal and the associated application.