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TMI Blog2014 (5) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... would not bring forth the challenge to its constitutional validity. 3. Before we examine the rival contentions of the parties it would be necessary for us to set out some facts. The petitioner, Hindalco Industries Ltd. (hereinafter referred to as " Hindalco ") manufactures aluminium . The sale price of aluminium was subject to an Aluminium Control Order. In order to manufacture aluminium the petitioner drew electricity from two sources - UPSEB and Renusagar Power Company. It may be pertinent to note that Renusgar Power Company and Hindalco are sister concerns. Initially excise duty was sought to be collected from Renusagar Power Company in respect of electricity supplied by it to Hindalco for the manufacture of aluminium . That was the subject matter of challenge in a writ petition being CW No.1008/1978. That dispute was resolved by a decision of this court on 09.07.1993 whereby it was held that if the corporate veil was lifted, it would appear that the electricity produced by Renusagar was actually captively consumed by Hindalco . On captive consumption of electricity there is no excise duty liability on account of exemption. Therefore, the sum and substance of the decision of 09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas the price charged by M/s Hindalco from the buyers clearly included the element of duty on electricity consumed by them in the manufacture of aluminium amongst above. 6. Whereas Section 11-D was inserted in the Central Excise and Salt Act, 1944 by virtue of the Central Excises and Customs Laws (Amendment) Act 1991 (40 of 1991) w.e.f . 20.9.91 vide Notf . No.30/91-CE-(NT) dated 19.9.91 with retrospective effect and whereas a sequal to the provision of Section 11D every person who has collected any amount from the buyers of any goods in any manner representing duty of Excise implicit or explicit in the provision was required to forthwith pay an amount so collected to the credit of Central Government notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any court or in any other provisions of this Act or the Rule made thereunder. 7. Whereas M/s Hindalco collected the sale price of the said goods from the buyers which included inter alia the element of duty amounting to Rs.1459.37 lacs leviable on electricity purchased from M/s Renusagar Power Co. and consumed during the relevant period and whereas they ought to have suo-moto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portunity given by the Department to the petitioner to explain its case. Therefore, it was contended that it was a clear violation of the principles of natural justice. Apart from this, it was pointed out that these principles of natural justice were inbuilt in Section 11D by virtue of sub-Section (2) and sub-Section (3). Although, these sub-Sections (2) and (3) were inserted in the year 2000, they were to operate with retrospective effect from 20.09.1991, which is the date on which Section 11D was inserted into the said Act. In other words sub-Sections (2) and (3) would have to be taken as having been incorporated in Section 11D from the very inception, i.e., with effect from 20.09.1991. 7. Insofar as this submission is concerned we are in entire agreement with Mr Tripathi that the demand notice, without the issuance of a show cause notice, would be bad in law even de hors sub-Sections (2) and (3) of Section 11D as that would be in clear violation of the principles of natural justice as has been well settled by several decisions including Union of India v. Madhumilan Syntex Pvt. Ltd.: 1988 (3) SCC 348 (Para 5 and 6). Thus, on this ground alone, the impugned demand dated 16.02.199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise, Pune: (2003) 3 SCC 559 wherein the Supreme Court observed as under:- "6. Admittedly, refund of the excise duty paid in excess was granted in 1989. Thereafter, sub-section (2) of Section 11-B which incorporates the principle of "unjust enrichment" had come into force w.e.f . 20-9-1991, which inter alia provides that duty of excise paid in excess would be refunded if the manufacturer had not passed on the incidence of such duty to any other person. This provision is not at all attracted. There is basic error in approach by the authorities below as the assessee has not filed any application under Section 11-B of the Act for refund of the excise duty paid by him. There is no question of application of principle of unjust enrichment as incorporated in Section 11-B. Other relevant provision would be Section 11-D which also came into force from 20-9-1991. It inter alia provides that every person who is liable to pay duty under the Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under the Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (3) The Central Excise officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (2), determine the amount due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. (4) The amount paid to the credit of the Central Government under sub-section (1) or sub-section (1A) or sub-section (3), as the case may be shall be adjusted against the duty of excise, payable by the person on finalisation of assessment or any other proceeding for determination of the duty of excise relating to the excisable good referred to in sub-section (1) and sub-section (1A). (5) Where any surplus is left after the adjustment under sub-section (4), the amount of such surplus shall either be credited to the Fund or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of section 11B and such person may make an applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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