2002 (2) TMI 127 - HC - Central Excise

Summary

Issues Involved:
1. Legality of including refunded excise duty in the assessable value for excise duty calculation.
2. Validity of show cause notice issued u/s 11A/11D of the Excise Act for recovery of refunded excise duty based on the principle of unjust enrichment.

Summary:

Issue 1: Legality of Including Refunded Excise Duty in Assessable Value
- Facts: The Petitioners challenged the inclusion of refunded excise duty in the assessable value by the Respondents. The Petitioners argued that the refund should not be treated as part of the price realization.
- Findings: The Court dismissed the Petitioners' challenge, citing the Apex Court's decision in Pravara Pulp Paper Mills v. Collector of Central Excise, which upheld the inclusion of the refunded amount in the assessable value. The Court ruled that the issue is squarely covered against the Petitioners and thus, the petition was dismissed.

Issue 2: Validity of Show Cause Notice Issued u/s 11A/11D for Recovery of Refunded Excise Duty
- Facts: The Petitioners contested the show cause notice dated 2-9-1992 issued u/s 11A/11D of the Excise Act for recovery of the refunded amount, arguing that the refund was final and unconditional as per the prevailing provisions before the amendment in 1991.
- Submissions: The Petitioners argued that the amended Section 11B, which introduced the principle of unjust enrichment, was not applicable retrospectively to their case. They contended that the refund granted in 1988 was final and could not be reopened based on the amended provisions. The Respondents, on the other hand, argued that the amended provisions applied retrospectively and that the refund resulted in unjust enrichment.
- Findings: The Court held that the refund granted on 23-5-1988 was final and unconditional and could not be reopened based on the amended provisions. The Court emphasized that the Respondents' failure to issue a notice u/s 11A within the stipulated six months was fatal to their case. The Court also ruled that Section 11D, which deals with duty collected from buyers but not paid to the government, was not applicable as the amount had already been paid to the government. Consequently, the show cause notice dated 2-9-1992 was quashed.

Conclusion:
- Writ Petition No. 3679 of 1989: Dismissed.
- Writ Petition No. 199 of 1993: Allowed. The order dated 9-6-1992 and the show cause notice dated 2-9-1992 were quashed. No order as to costs.