1997 (3) TMI 115 - HC - Central Excise

Summary

Issues:
1. Interpretation of law applicable to a claim for refund under Section 11B of the Central Excises and Salt Act, 1944.
2. Determining the impact of Section 11B(3) of the Act on refund claims made by separate licensed units in different Excise Jurisdictions.

Analysis:

Issue 1:
The case involved a dispute regarding the law applicable to a claim for refund under Section 11B of the Central Excises and Salt Act, 1944. The manufacturers had filed refund claims for a total sum, contending that the duty for which refund was sought had been paid under a mistake of law. The applicant argued that the provisions of Section 11B of the Act, which came into force from 17-11-1980, should not apply to their case as the refund related to earlier periods. They relied on old Rule 11 of the Central Excise Rules, 1944. The applicant also highlighted a previous order by the Central Board of Excise and Customs, which they believed entitled them to a refund without a fresh application. The Tribunal rejected the claim, citing Section 11B. The Court, considering the latest decision in Mafatlal Industries Ltd. v. Union of India, held that all pending claims must adhere to the provisions of Section 11B as amended by Central Act 40 of 1991. The Court emphasized that the applicant needed to satisfy the requirements of the amended Section 11B, including proving that the duty incidence had not been passed on to another person.

Issue 2:
The second issue revolved around whether an order-in-appeal passed under the Act for one licensed unit automatically entitled another licensed unit in a different Excise Jurisdiction to a refund without a separate claim. The Court ruled that there was no automatic entitlement to a refund based on an order of the Board passed in relation to units outside the jurisdiction of the Collector of Central Excise, Madras. The Court emphasized that each unit needed to make a separate claim for a refund in accordance with the relevant provisions of the law. The judgment highlighted the need for compliance with the statutory provisions and the declaration of law by the Supreme Court in Mafatlal Industries Ltd.'s case.

In conclusion, the Court answered the questions by affirming that refund claims must adhere to Section 11B as amended by Central Act 40 of 1991 and that there is no automatic entitlement to a refund based on orders from units outside the jurisdiction. The Tribunal was directed to reconsider the matter in light of the latest legal provisions and the Supreme Court's decision.