1997 (7) TMI 172 - HC - Central Excise

Summary

Issues:
1. Claim for refund of excise duty under Central Excises and Salt Act, 1944.
2. Interpretation of Section 11B regarding the refund of duty.
3. Application of the principle of passing on the incidence of duty to third parties in claiming a refund.

Detailed Analysis:
The petitioner filed a Writ petition seeking a mandamus to direct the respondents to refund an amount mistakenly paid as Excise Duty for Tread Rubber. The petitioner's contention was based on the exemption provided under Notification No. 184 of 1985, as amended by Notification No. 232 of 1985, regarding the payment of duty. The value of clearance of Tread Rubber was within the permissible limits set by the notifications. The refund claim was rejected by the first respondent as time-barred under Section 11(B) of the Central Excises and Salt Act, 1944. An appeal was filed before the Second respondent, the Appellate Authority, who also rejected the appeal on the same grounds. The petitioner then approached the High Court through the Writ petition (para 2-3).

The Court referred to the case law of Mafatlal Industries Ltd. v. Union of India, emphasizing that all claims for refund of Central Excise and Customs Duties must be adjudicated under Section 11B of the Central Excise Act, 1944 or Section 27 of the Customs Act, 1962. It was highlighted that the burden of duty should not have been passed on to a third party for a refund claim to be valid. Section 11B outlines the procedure for claiming a refund of duty, stating that the duty paid may be refunded if it is determined to be so and has not been passed on to another party (para 5).

The Court concluded that the manufacturer is entitled to a refund of Excise Duty only if the burden of duty has not been passed on to another person. Since the petitioner did not claim that the burden was not passed on, the manufacturer had no legal right to a refund in this case. The judgment emphasized the obligation to prove that the duty was not passed on as a pre-condition for a refund claim. It was stated that giving retrospective effect to Section 11B does not take away any vested or substantive rights, as the manufacturer has already collected the duty from the purchaser. Therefore, the Court dismissed the Writ petition for the return of excise duty, stating that the claim had no legal basis. No costs were awarded in the judgment (para 6-7).