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Issues:
1. Recovery of excise duty refunded based on a High Court judgment later overturned by the Supreme Court. 2. Interpretation of Section 11A of the Central Excise Act regarding the recovery of refunded duty. 3. Applicability of the doctrine of restitution in the context of refunded excise duty. 4. Claim of passing on the refunded amount to dealers/distributors as a defense against repayment. Issue 1: Recovery of refunded excise duty: The case involves a scenario where excise duty was refunded to a company based on a High Court judgment, which was later reversed by the Supreme Court. The Excise Department sought to recover the refunded amount, leading to a legal challenge by the company through a writ petition. Issue 2: Interpretation of Section 11A of the Central Excise Act: The petitioners argued that the recovery of the refunded duty should be governed by Section 11A of the Central Excise Act, which imposes a six-month time limit for such recovery. They contended that the recovery attempt by the Excise Department was time-barred under this provision. Issue 3: Applicability of the doctrine of restitution: The court rejected the argument that recovery should be based solely on the Act's provisions, emphasizing that the obligation to repay the refunded amount arises from the Supreme Court's judgment overturning the High Court's refund order. The court highlighted that the company had a duty to voluntarily repay the refunded amount without necessitating specific directions from the Supreme Court. Issue 4: Passing on the refunded amount to dealers/distributors: The company claimed that it had passed on the refunded amount to its dealers/distributors, arguing against the repayment to the Union of India based on the principle of unjust enrichment. However, the court found this defense unconvincing, stating that the company should have raised this issue before the Supreme Court and that the passing on of the refund did not absolve the company of its obligation to repay the refunded amount. In conclusion, the court dismissed the writ petition, emphasizing that the company had a legal and moral obligation to repay the refunded excise duty following the Supreme Court's judgment, and that the company's attempts to avoid repayment through technical arguments were not justified.
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