1991 (3) TMI 158 - HC - Central Excise

Summary

Issues Involved:
1. Constitutionality of sub-sections (4) and (5) of Section 11B of the Central Excises and Salt Act, 1944 under Article 14 and Article 265 of the Constitution of India.

Detailed Analysis:

Issue 1: Constitutionality under Article 14

1. Unreasonably Short Period for Filing Application:
- The petitioners argued that the six-month period prescribed under Section 11B(1) for filing a refund application is unreasonably short compared to the three-year period under Article 113 of the Limitation Act.
- The court held that the objective of the Law of Limitation is to extinguish stale demands and that equitable considerations are out of place while interpreting such provisions. Therefore, the six-month period is not unreasonably short and does not violate Article 14.

2. No Provision for Condoning Delay:
- The petitioners contended that the absence of a provision for condoning delays even on genuine grounds is arbitrary.
- The court found that merely because the provision of Section 5 of the Limitation Act, which allows for condoning delays, is not applicable, it does not make the six-month period arbitrary or violative of Article 14.

3. Arbitrary Definition of "Relevant Date":
- The petitioners argued that the definition of "relevant date" is arbitrary as it does not consider the date of knowledge of the right to a refund.
- The court held that the definition of "relevant date" is not unreasonable merely because it does not include the date of knowledge.

4. Discrimination Between Payments Made Under Protest and Without Protest:
- The petitioners claimed that the classification between those who pay duty under protest and those who do not is discriminatory.
- The court found this classification reasonable, as those who pay under protest are vigilant and pursue their remedies diligently, unlike those who do not.

Issue 2: Constitutionality under Article 265

1. Bar on Filing Civil Suits for Refund:
- The petitioners argued that sub-section (5) of Section 11B, which bars civil suits for refund, is ultra vires Article 265.
- The court held that it is not a constitutional requirement that civil suits be the only remedy for grievances. The Central Excise Act provides an exhaustive remedy, and the bar on civil suits is not ultra vires Article 265.

2. Retention of Unauthorized and Illegal Collection of Duty:
- The petitioners contended that sub-sections (4) and (5) allow the retention of unauthorized and illegal collections.
- The court found that the Act provides adequate machinery for challenging wrongful acts, including appeals and revisions. Therefore, the provisions are not ultra vires.

Conclusion:
The court concluded that sub-sections (4) and (5) of Section 11B of the Central Excises and Salt Act, 1944, are not ultra vires Articles 14 and 265 of the Constitution of India. The petitions were rejected, and the rules issued in various Special Civil Applications were discharged with no order as to costs.