2002 (11) TMI 126 - HC - Central Excise

Issues Involved:
1. Refund of Excise Duty
2. Application of Section 11B of the Central Excises and Salt Act, 1944
3. Question of Unjust Enrichment
4. Interest on Refund
5. Availability of Alternative Remedy

Detailed Analysis:

1. Refund of Excise Duty:
The petitioner sought a writ to quash the orders dated 27-1-1999 and 19-11-1999, which denied the refund of Rs. 4,74,330 paid as excise duty. The petitioner, a manufacturer of Rice Mill Plant, claimed exemption from excise duty but had paid it under a mistake. Upon discovering the mistake, the petitioner applied for a refund under Section 11B of the Central Excises and Salt Act, 1944. The refund application was initially rejected by the Assistant Collector and the Collector (Appeals), leading to a writ petition that was allowed by the High Court in 1987. However, the refund was not processed, and subsequent applications for refund were also rejected, leading to the current petition.

2. Application of Section 11B of the Central Excises and Salt Act, 1944:
The primary legal contention was whether the amended Section 11B, introduced by the Central Excise and Customs Laws (Amendment) Act, 1991, applied to the refund claim. The petitioner argued that since the refund was ordered by the High Court in 1987 and the Government's appeal was dismissed in 1995, the amended Section 11B should not apply. However, the court found that the refund proceedings had not been finalized as the refund was never actually made. Therefore, the amended Section 11B, which requires proof that the duty incidence was not passed on to another person, was applicable.

3. Question of Unjust Enrichment:
The respondents contended that the petitioner had not provided satisfactory evidence that the excise duty burden was not passed on to the consumer, as required under Section 11B(2). The court upheld this contention, stating that the petitioner failed to meet the burden of proof, and thus, the refund amount was rightly credited to the Consumer Welfare Fund. The court referenced the Supreme Court's decision in Mafatlal Industries Limited, which clarified that Section 11B applies to all pending proceedings and that refunds must be processed under the amended provisions.

4. Interest on Refund:
The petitioner also sought interest on the refund amount from the date of the High Court's decision in 1987. The court did not grant this request, noting that the refund process was not completed, and the petitioner had not complied with the requirements of the amended Section 11B. The court emphasized that the refund provisions must be followed as per the amended law, regardless of the previous court order.

5. Availability of Alternative Remedy:
The respondents argued that the petitioner should have appealed to the Customs, Excise, and Gold Control (Appellate) Tribunal instead of filing a writ petition. The court, however, decided to hear the writ petition, citing the Supreme Court's decision in Dr. Bal Krishna Agarwal, which allows for direct court intervention in cases involving pure questions of law. The court concluded that directing the petitioner to an alternative remedy would not be appropriate given the legal questions involved.

Conclusion:
The court dismissed the writ petition, upholding the orders that denied the refund and directed the amount to be credited to the Consumer Welfare Fund. The court found no illegality in the impugned orders, emphasizing the applicability of the amended Section 11B and the requirement to prove that the duty incidence was not passed on to another person. The petitioner's request for interest on the refund was also denied, and the court ruled that the alternative remedy argument did not preclude the hearing of the writ petition. The parties were ordered to bear their own costs.

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