9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 1208 - HC - Central ExciseRefund of duty paid under mistake of law - applicability of section 11B of CEA, 1944 - time limitation - Held that - The assessees paid up the tax and later realised that they are entitled to exemption. The limitation, in the relevant period, being one year, there could be no refund application maintained after that period. Petition dismissed - decided in favour of the Revenue and against the assessees.
Issues Involved:
1. Whether duty paid under a mistake of law must be refunded per Section 11B of the Central Excise Act, 1944. 2. Preliminary objection regarding the withdrawal of an appeal by the Revenue. 3. Classification of refund claims under different legal categories. 4. Applicability of Section 11B of the Central Excise Act for refund claims based on mistake of law. Detailed Analysis: Issue 1: Refund of Duty Paid Under Mistake of Law The central issue in these writ petitions is whether duty paid under a mistake of law must be refunded according to Section 11B of the Central Excise Act, 1944. The court examined whether the refund claims are subject to the limitation period specified in Section 11B. The court referred to the precedent set in the case of Mafatlal Industries Limited, which categorizes refund claims into unconstitutional levy, illegal levy, and mistake of law. The court concluded that payments made under a mistaken understanding of the law fall under the category of "mistake of law" and must adhere to the statutory remedy and limitation period provided under Section 11B. Issue 2: Preliminary Objection on Appeal Withdrawal The petitioners raised a preliminary objection that the Revenue had withdrawn an appeal from a previous judgment, implying acceptance of the view taken by a learned Single Judge. The court rejected this objection, stating that the withdrawal was due to the Litigation Policy's monetary limits and did not resolve the legal question. The court emphasized its duty to lay down the correct law despite the Revenue's acceptance of the earlier decision. Issue 3: Classification of Refund Claims The court referred to the classifications made in Mafatlal Industries Limited: - Class I: Unconstitutional Levy - Claims based on the unconstitutionality of the tax provision. - Class II: Illegal Levy - Claims based on misinterpretation or erroneous application of the law. - Class III: Mistake of Law - Claims initiated based on favorable decisions in other cases, holding the levy to be unconstitutional or without jurisdiction. The court noted that the learned Single Judge in the present case had incorrectly categorized the payment as a "mistake of fact in understanding the law." The court clarified that such payments are indeed a "mistake of law," and refund claims must follow the statutory provisions under Section 11B. Issue 4: Applicability of Section 11B for Mistake of Law The court extensively discussed the majority judgment in Mafatlal Industries Limited, which held that any claim for refund of excise duty must be made under and in accordance with Section 11B. The court emphasized that the Central Excise Act is a self-contained enactment with specific provisions for refund, which include a limitation period. The court rejected the notion that Section 72 of the Contract Act could be invoked independently for refund claims, reiterating that the statutory remedy under Section 11B must be followed. The court concluded that the refund claims in the present cases were subject to the one-year limitation period specified in Section 11B. Since the applications for refund were made beyond this period, the claims were not maintainable. The court dismissed the writ petitions, holding that the judgment in WP(C) No. 18126/2015 was not good law in light of the binding precedent in Mafatlal Industries Limited. Conclusion The court dismissed the writ petitions, affirming that refund claims based on a mistake of law must adhere to the limitation period specified in Section 11B of the Central Excise Act. The judgment in WP(C) No. 18126/2015 was overruled, and the reference was answered in favor of the Revenue.
|
