2002 (9) TMI 646 - HC - Central Excise

Summary

Issues Involved:
1. Legality of the order dated 18-4-2000 confirming the central excise duty.
2. Rejection of the refund claim as time-barred u/s 11B of the Central Excise Act, 1944.

Summary:

1. Legality of the order dated 18-4-2000 confirming the central excise duty:
The petitioner challenged the order dated 18-4-2000 passed by the Commissioner of Central Excise, Rajkot, which confirmed the central excise duty of Rs. 15,69,046/- u/r 9(2) of Central Excise Rules read with proviso to sub-section (1) of Section 11A of the Central Excise Act. The petitioner had already filed an appeal before the CEGAT, Mumbai, which was pending. The court refrained from deciding the legality and validity of this order due to the pending appeal.

2. Rejection of the refund claim as time-barred u/s 11B of the Central Excise Act, 1944:
The petitioner also challenged the order dated 27-10-2000 rejecting the refund claim of Rs. 5,40,847/- as time-barred u/s 11B of the Central Excise Act. The court found substance in the petitioner's claim and entertained the petition despite the availability of an alternative statutory remedy. The court referred to several judgments, including the Supreme Court's decision in Mafatlal Industries v. Union of India, which clarified that refunds ordered by statutory authorities that have become final are not subject to the limitations of Section 11B.

The court held that the payment of Rs. 21,09,893/- made by the petitioner was not voluntary but under protest due to threats from the respondent authorities. Therefore, the limitation of six months did not apply. The court also noted that the Commissioner of Central Excise had directed the refund of the balance amount after following the usual procedure under the law, and rejecting the refund claim on the ground of limitation would nullify this order.

The court further observed that Rule 233B, which deals with the procedure for payment under protest, was not applicable in this case as the payment was made under threat and compulsion. The substantive right to refund arose from the order passed by the Commissioner of Central Excise.

Conclusion:
The court directed the respondents to grant the refund of Rs. 5,40,847/- along with interest at the rate of 12% from the date of the order of the Commissioner of Central Excise till the date of payment. The respondents were further directed to pay the said amount along with interest on or before 31st October 2002, failing which the interest rate would increase to 15% p.a. for the subsequent period. The petition was allowed to this extent, with no order as to costs.