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TMI Blog2016 (6) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the alternative remedy suggested by the respondents cannot be said to be an efficacious remedy inasmuch as the amount paid by way of mistake is neither a duty of excise nor is it Crude Oil Cess to which the provisions of the OID Act apply, and consequently, the machinery provisions under the Central Excise Act, 1944 would not apply to refund of such amount. - Refund allowed - Decided in favor of petitioner. Interest on delayed refund - Held that:- Insofar as the claim of interest is concerned, the amount admittedly had been paid by the petitioner by way of a mistake. The position of law in this regard was not clear and hence, no fault can be found in the approach of the revenue authorities in retaining such amounts till the time the Circular dated 07.01.2014 came to be issued, clarifying the issue. It has been held hereinabove, that the amount in question is not in the nature of a duty of excise and hence the provisions of the Central Excise Act for refund would not be applicable. Consequently, the provisions of section 11BB of the Central Excise Act, which provides for interest on delayed refund, would also not be applicable. It is settled legal position that in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Department of Revenue, Ministry of Finance. It is the case of the petitioner that it paid Primary Education Cess (hereinafter referred to as the "Education Cess") and Secondary and Higher Secondary Education Cess on Crude Oil Cess for the aforesaid period amounting to ₹ 73,60,061/-. The Central Board of Direct Taxes issued a circular dated 07.01.2014 clarifying that the Education Cess and Secondary and Higher Secondary Education Cess are not to be calculated on cesses which are levied under the Acts administered by Department/Ministries other than Ministry of Finance (Department of Revenue) in terms of those Acts. In view of the above, the petitioner filed a letter dated 17.07.2014 requesting for refund of the amount of ₹ 73,60,061/- of Education Cess and Secondary and Higher Secondary Education Cess inadvertently paid by it for the aforesaid period in terms of the circular dated 07.01.2014. As per the understanding of the petitioner, its refund claim was sent to the concerned Range Superintendent vide letter dated 22.07.2014, who by letter dated 08.08.2014 and 16.09.2014, submitted his verification report with the recommendation of rejection of refund claim. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est, void and ex-facie erroneous and bad in law. It was submitted that the second respondent has invoked the provisions of section 11B of the CE Act which is not applicable in the facts of the present case. It was submitted that the impugned order passed by the second respondent suffers from a fallacy, inasmuch as, the crude oil cess is not a central excise duty. Elaborating upon the said submission, it was submitted that as per section 15(1) of the OID Act, there shall be levied and collected, as a cess, for the purpose of the OID Act, on every specified item which is produced in India and removed to a refinery or factory or transferred by the person by whom such item is produced to another person, a duty of excise at a specified rate. It was pointed out that the levy of duty of excise as a cess on removal or transfer of crude oil is provided under the OID Act which is administered by the Ministry of Petroleum and Natural Gas, Government of India. Also, the power to levy cess on crude oil is with the Ministry of Petroleum and Natural Gas and not with Ministry of Finance. It was submitted that the cess on crude oil is neither levied under the Central Excise Act, nor by the Ministr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inferred or stated that the sugar cess imposed under the provisions of the Cess Act assume the characteristic of central excise duty so as to warrant calculation of education cess on the amount of cess so collected. The court held that the sugar cess levied and collected cannot be equated with duty of central excise and therefore, cannot be treated to be part and parcel of the amount on which the education cess has to be calculated. It was submitted that the above decision was squarely applicable to the facts of the present case and that the second respondent, in gross violation of the judicial discipline, has ignored the said order. 3.3 It was submitted that the fact that the education cess is not leviable upon the crude oil cess as the same is not the duty of excise, though collected by the Department of Revenue, has also been stated by the CBEC in its circulars dated 10.08.2004 as well as 17.01.2014. It was submitted that the above circulars are binding upon the second respondent and hence, the second respondent has erred in not following the departmental clarifications. It was submitted that when the Department itself considers the crude oil cess as a cess which is different f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the present case, the question of unjust enrichment, limitation etc. shall not apply for the purpose of claiming refund of the Education Cess and Secondary and Higher Secondary Education Cess. 3.5 The attention of the court was invited to paragraph 4.8(vi) of the affidavit-in-reply filed on behalf of the second respondent, wherein, it has been stated thus: "[vi] Further the conference of the all Chief Commissioner was held in Bangalore on 26th and 27th Nov.2014 and the instant issue was discussed whether the Education cess and SHE cess on Oil cess is payable or otherwise. The minutes of the meeting of the said conference has been circulated vide F.No.96/79/2014- CX1(Pt.11) dated 09.02.2015 wherein it is admitted at point No.1-9 of Annexure-A (page.08) that the Oil Cess is administered under Act administered by different ministries, it was further clarified that no cesses are leviable on oil cess. In light of this clarification, the instant issue may be considered as settled and no further demand notices may be required to be issued and decision for pending issues may be decided accordingly." It was submitted that refund claimed under section 11B of the Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., (1998) 9 SCC 708. It was, accordingly, urged that the impugned order being contrary to the statutory provisions and therefore, bad in law, deserves to be quashed and set aside and that the petition deserves to be allowed by directing the respondents to forthwith sanction and grant the petitioner refund of ₹ 73,60,061/- as sought for vide application dated 21.07.2014. 4. Vehemently opposing the petition, Mr. R. J. Oza, Senior Advocate and learned Senior Standing Counsel for the respondents, invited the attention of the court to the reliefs prayed for in the petition, to point out that what is subject matter of challenge before this court is the order-in-original passed by the adjudicating authority. It was submitted that all the contentions advanced before this court have been raised before the adjudicating authority, who has recorded a finding on each contention. It was submitted that since the adjudicating authority has recorded findings on all the points that are raised by the petitioner before this court, this court should not exercise writ jurisdiction and render an opinion on the correctness of the order of the adjudicating authority. It was submitted that against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine can be invoked to deny the benefit to which a person is not otherwise entitled. The court was of the view that section 11B of the Central Excise Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in the absence of a statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the petitioner-appellant to show that he has paid the amount for which relief is sought, he has not passed on the burden on consumers and if such relief is not granted, he would suffer loss. It was submitted that for the purpose of examining whether or not there was unjust enrichment, this court would have to enter into disputed questions of fact, which it would not entertain in exercise of its writ jurisdiction. 4.2 It was further submitted that the claim of the petitioner is barred by limitation, inasmuch as, section 11B of the Central Excise Act provides for a limitation of one year from the date of payment of such amount. It was submitted that in the facts of the present case, the claim relates to the period July 2004 to April 2014 and hence, on the face of it, it is evident that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Accordingly, for claiming any refund for the period from July 2004 to April 2014, on the basis of the CBEC circular dated 07.01.2014, the essential pre-condition is to first finalize the pending assessment, only then the question of any refund would arise. In the facts of the present case, the petitioner had already made self-assessment and paid the duty under rule 6 of the Central Excise Rules, 2002 for the period July 2004 to April 2014, which is deemed to be final assessment. For the purpose of claiming any refund on the basis of CBEC circular dated 07.01.2014, assessment is required to be pending, whereas in the present case, self-assessment is deemed to be final assessment and hence, the second respondent was justified in rejecting the claim made by the petitioner. 4.4 Reliance was also placed upon the decision of the Supreme Court in the case of Suganmal v. State of M. P., AIR 1965 SC 1740, for the proposition that though the High Courts have power to pass any appropriate order in the exercise of the powers conferred under Article 226 of the Constitution, such a petition solely praying for the issue of a writ of mandamus directing the State to refund the money is not ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case are distinguishable from the facts of the said case and that the petitioner does not have any remedy except under Article 226 of the Constitution of India. It was submitted that under section 35 of the Central Excise Act, a decision rendered by the authority has to be under that Act, whereas in the facts of the present case, the dispute does not relate to any decision under the provisions of the CE Act and hence, the remedy under section 35 of the CE Act, cannot be said to be an efficacious alternative remedy. 5.1 On the question of the claim of the petitioner being barred by limitation, the learned counsel placed reliance upon the decision of the Supreme Court in the case of Dehri Rohtas Light Rly. Co. Ltd. v. District Board, Bhojpur, (1992) 2 SCC 598, wherein, the court held that the rule which says that the court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principle on which the relief to the party on the grounds of lach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (221) ELT 336 (Del.), for the proposition that the custom authorities were bound to refund the cess erroneously paid under a mistake of law. The court noted that the appellant therein had paid the cess when in fact no such cess was payable and as such there was no question of processing a claim of refund of such amount in terms of the Customs Act at all because the payment made mistakenly was not under that Act. The court, accordingly, held that the period of limitation under section 27 of the Customs Act would not apply and that the applications for refund having been made well within the period of three years' after discovery of mistake by the appellants therein, were not barred by limitation. It was submitted that the above decision would be squarely applicable to the facts of the present case. 5.5 Reliance was also placed upon the decision of this court in the case of Swastik Sanitarywares Ltd. v. Union of India, 2013 (296) ELT 321 (Guj.), wherein the court found that the second deposit of the same amount on clearance of the same goods did not amount to deposit of excise duty and was a pure mistaken deposit of an amount with the Government which the revenue cannot retain or wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason to doubt the correctness of the aforesaid statement contained in the said affidavit and held that no case was made out for interference with the direction issued by the High Court regarding refund of excise duty paid by the respondent on import of rectified spirit used in the manufacture of copper. 5.7 On the question of existence of an alternative remedy, the learned counsel placed reliance upon the decision of the Kerala High Court in the case of Geojit BNP Paribas Financial Services Ltd. v. C.C.E., Customs & Sales Tax, Kochi, 2015 (39) STR 706 (Ker), wherein the court held that the question of alternative remedy would arise if service tax is otherwise leviable under the Central Excise Act. The court found that in the facts of that case, there was no dispute with regard to the fact that no service tax was leviable for the services extended by the petitioner to the Muskat Bank. The court held that the writ petition is maintainable when the amount is arbitrarily withheld without any justification in law as the refund claimed by the petitioner was not relatable to section 11B of the C.E. Act. 5.8 It was, accordingly, urged that there being no efficacious alternative remedy a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the mistake, the petitioner moved the application for refund of the amount paid under mistake. 7.2 Insofar as the case of the petitioner that it had paid the amount under a mistake of law is concerned, the say of the petitioner appears to be credible inasmuch as no assessee would continue paying a tax for years together if it had any reason to believe that it was not liable to pay the same. On a plain reading of the circular dated 7th January, 2014, it is evident that the issue was not free from doubt and, therefore, representations were made by the trade as well as field formations, pursuant to which such doubt was cleared. Since Oil Cess is not administered by the Department of Revenue, the petitioner came to know that it was not required to pay Education Cess and Secondary and Higher Secondary Education Cess only when the position was clarified by the above circular and upon realising its mistake made the application for refund. 8. Since the adjudicating authority has held that the circular dated 07.01.2014 would not apply to the petitioner as the same relates to the cesses levied and administered by different departments such as Sugar Cess levied under Sugar Cess Act, 1982, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not applicable to the facts of the present case. 8.3 Insofar as the finding that the Oil Cess is nothing but excise duty is concerned, it may be germane to refer to the decision of this court in the case of Commissioner v. Sahakari Khand Udyog Mandli Ltd. (supra) wherein the court in the context of the Sugar Cess Act, 1982, which contains provisions similar to the provisions of the OID Act has held thus: "5. Sections 3 and 4 of the Cess Act read as under: "SECTION 3 : Imposition of cess : - There shall be levied and collected as a cess, for the purposes of the Sugar Development Fund Act, 1982, a duty of excise on all sugar produced by any sugar factory in India, at such rate not exceeding [twenty five rupees] per quintal of sugar, as the Central Government may, by notification in the Official Gazette, specify from time to time. (2) The duty of excise levied under sub-section (1) shall be in addition to the duty of excise leviable on sugar under the Central Excise Act, 1944 (1 of 1944), or any other law for the time being in force. (3) The duty of excise levied under sub-section (1) shall be payable by the occupier of the sugar factory in which sugar is produced. (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct assume the characteristic of central excise duty so as to warrant calculation of education cess on the amount of cess so collected. 8. Section 4 of the Cess Act is again an inherent indicator when it provides that the proceeds of the duty of excise levied under Section 3 (sugar cess) shall be credited to the Consolidated Fund of India. For the purposes of utilization of the said fund, one has to consider provisions of Sugar Development Fund Act, 1982 simultaneously to ascertain as to whether the sugar cess is in fact and in law only a cess or is a duty of central excise. 9. Under the Sugar Development Fund Act, 1982, `fund' means sugar development fund formed under Section 3 of the said Act, Under sub-section (2) of Section 3 of the Sugar Development Fund Act, 1982, it is provided that an amount equivalent to the cess collected under the Cess Act, reduced by the cost of collection, together with any moneys received by the Central Government for the purposes of the Sugar Development Fund Act, shall, after due appropriation made by parliament by law be credited to the sugar development fund. To put it differently, amount which was collected by way of sugar cess under the Cess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on those items under any other law for the time being in force. (4) The provisions of the Central Excises and Salt Act, 1944 (1 of 1944), and the rules made thereunder, including those relating to refunds and exemptions from duties shall, as far as may be, apply in relation to the levy and collection of duties of excise leviable under this section and for this purpose the provisions of that Act shall have effect if that Act provided for the levy of duties of excise on all items specified in the Schedule. 16. Crediting of proceeds of duty to Consolidated Fund of India.-The proceeds of the duties of excise levied under Section 15 shall first be credited to the Consolidated Fund of India and the Central Government may, if Parliament by appropriation made by law in this behalf, so provides, pay to the Board from time to time, from out of such proceeds, after deducting the expenses of collection, such sums of money as it may think fit for being utilised exclusively for the purposes of this Act." 8.5 Thus, under sub-section (1) of section 15 of the OID Act, what is levied is a cess for the purpose of the OID Act. The provision further provides as to what should be the rate at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order passed by the adjudicating authority rejecting the application made by the petitioner seeking refund of the Education Cess Secondary and Higher Secondary Education Cess erroneously paid by it, and hence, the next question that arises for consideration is as to whether the petitioner was liable to pay Education Cess and Secondary and Higher Secondary Education Cess. Education Cess has been levied under section 93 of the Finance Act 2004 and Secondary and Higher Secondary Education Cess has been levied under section 138 of the Finance Act, 2007. It would, therefore, be germane to refer to the said provisions, which read as under: "93. Education Cess on excisable goods.-(1) The Education Cess levied under Section 91, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Education Cess on excisable goods), at the rate of two per cent, calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but [excluding Education Cess, and Secondary and Higher Education Cess levied unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall, as far as may be, apply in relation to the levy and collection of the Secondary and Higher Education Cess on excisable goods as they apply in relation to the levy and collection of the duties of excise on such goods under the Central Excise Act, 1944 or the rules made thereunder, as the case may be." 10.1 On a plain reading of section 93, it is clear that the Education Cess levied under the Finance Act, 2004 is a duty of excise levied at the rate of two percent, calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess, and Secondary and Higher Secondary Education Cess levied under section 136 of the Finance Act, 2007 on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 or under any other law for the time being in force. Thus, Education Cess is levied on the aggregate of all duties of excise (except to the extent indicated hereinabove) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue) under the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication is made to an authority under the Central Excise Act, the same would not lead to an inference that the application has been made under the provisions of the Central Excise Act, 1944 so as to make the provisions of appeal, etc. applicable. In the present case, there was no liability to pay Education Cess or Secondary and Higher Secondary Education Cess on the part of the petitioner. Under section 93 of the Finance Act, 2004 and section 138 of the Finance Act, 2007, Education Cess and Secondary and Higher Secondary Education Cess levied thereunder are treated as duties of excise. The petitioner having paid Education Cess and Secondary and Higher Secondary Education Cess under a mistake of law without there being any liability on the part of the petitioner to pay such amount, the amount paid by the petitioner would not take the colour of a duty of excise and would merely be an amount deposited by the petitioner under a mistake of law. Under the circumstances, the provisions of the CE Act would not be applicable when the petitioner seeks refund of such amount. 11.1 At this juncture, it may be apposite to refer to the decision of the Supreme Court in U.P. Pollution Control Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... denced by the provisions of the said Act and the writ petition, if any, would be considered and disposed of in the light of and in accordance with the provisions of Section 11-B of the Central Excises and Salt Act, 1944 stating that power under Article 226 has to be exercised to effectuate the rule of law and not to abrogate it. In the present cases there is no corresponding section to Section 11-B of the Central Excises and Salt Act, 1944 for making claim for refund of money and, therefore, the respondents could maintain the writ petitions under Article 226 of the Constitution. Further in para 108( i i ) of the judgment it is held that where, however, a refund is claimed on the ground that the provisions of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview of the enactment, can be made either by way of suit or by way of writ petition. 6. In support of the submission that a writ petition seeking mandamus for mere refund of money was not maintainable, the decision in Suganmal v. State of M.P., AIR 1965 SC 1740, was cited. In AIR para 6 of the said judgment, it is stated that - "we are of the opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of a given case." [Emphasis supplied] 11.2 Reference may also be made to the decision of the Delhi High Court in Hind Agro Industries Limited v. Commissioner of Customs, 2008 (221) ELT 336 Del, wherein it has been held thus: "10. There can be no doubt that the above provision applies to a claim for refund of 'any duty' within the meaning of that Act. A word 'duty' has been defined under Section 2(15) of the Act means, 'a duty of customs leviable under this Act.' The entire Section 27 of the Act can, therefore, obviously apply if and only if, the refund that is being sought is of customs duty otherwise leviable under the Act." "13. It is clear that in Mafatlal Industries the Hon'ble Supreme Court had only talked of refund of duty payable within the meaning of either the Central Excises and Salt Act, 1944 ('Excise Act') or the Customs Act, 1962, as the case may be. In other words when the Hon'ble Supreme Court said that all claims for refund ought to be filed only in accordance with the Customs Act or Excise Act, it obviously did not include payment made under some enactment, which for some reason, had erroneously been made to the Customs authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition before this court against the order passed by the adjudicating authority rejecting its claim for refund of the amount paid under a mistake. 12. Since it has been contended on behalf of the revenue that the application for refund ought to have been made under section 11B of the Central Excise Act, 1944, reference may be made to the said section which reads thus: "11-B. Claim for refund of duty.-(1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12-A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person: Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner was therefore, wholly justified in making the application for refund under a mistake of law and not under section 11B of the Central Excise Act, 1944. 13. The next question that needs to be addressed is the aspect of limitation. The refund application has been made in July 2014 seeking refund of the amount paid for the period July, 2004 to April 2014. On behalf of the revenue it has been contended that in view of the provisions of section 11B of the CE Act, the limitation for filing the refund claim would be before the expiry of one year from the relevant date. The expression "relevant date" is defined under clause (B) of the Explanation to section 11B of CE Act and insofar as the present case is concerned would be the date of payment of duty. However, as discussed hereinabove, the provisions of section 11B of the Act would not apply to the claim of refund made by the petitioner. Consequently, the limitation prescribed under the said provision would also not be applicable. 14. It has been further contended on behalf of the revenue, that in case the limitation prescribed under section 11B of the CE Act is not applicable, the general principles of limitation would apply and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right and the remedy claimed are and how delay arose. The principle on which the relief to the party on the grounds of laches or delay is denied is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the writ court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not as to physical running of time. Where the circumstances justifying the conduct exist, the illegality which is manifest cannot be sustained on the sole ground of laches. The decision in Tilokchand case1 relied on is distinguishable on the facts of the present case. The levy if based on the net profits of the railway undertaking was beyond the authority and the illegal nature of the same has been questioned though belatedly in the pending proceedings after the pronouncement of the High Court in the matter relating to the subsequent years. That being the case, the claim of the appellant cannot be turned down on the sole ground of delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government service tax though not collected from the service recipient was 75 days from the end of the month when such service was provided. This is in contrast to the duty to be deposited by a service provider upon actual collection by the 15th of the month following the end of the month when such duty is collected. Sub-section (3) of section 68 thus provided for an outer limit of 75 days, but never provided that the same cannot be paid by the 15th of the month following the end of the month when such service was provided. Thus, if the petitioner deposited such duty with the Government during a particular quarter on the basis of billing without actual collection, he had discharged his liability under sub-section (3) of section 68. Thereafter, on an artificial basis, the Assessing Officer could not have held that he ought to have deposited same amount once all over again in the following quarter. This is fundamentally flawed logic on the part of the Assessing Officer. (13) Further, to accept such formula adopted by the Assessing Officer would amount to collecting the tax from the petitioner twice. The petitioner having already paid up the service tax even before collection i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect the refund unless there have been avoidable laches on the part of the petitioner which indicate either the abandonment of his claims or which is of such nature for which there is no probable explanation or which will cause any injury either to respondent or any third party. It is true that in some cases the period of three years is normally taken as a period beyond which the court should not grant relief but that is not an inflexible rule. It depends upon the facts of each case. In this case, however, the High Court refused to grant the relief on the ground that when the section was declared ultra vires originally that was the time when refund should have been claimed. But it appears to us, it is only when the Loong Soong case was decided by the High Court in 1973 that the appellant became aware of his crystal right of having the assessment declared ultra vires and in that view of the matter in October 1973 when the judgment was delivered in July 1973 the appellant came to know that there is mistake in paying the tax and the appellant was entitled to refund of the amount paid. That was the time when the appellant came to know of it. Within a month in November 1973 the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the saving provisions of Article 304(a) of the Constitution. It was reiterated that the tax which had already been paid was so paid under a mistake of law under Section 72 of the Indian Contract Act. The High Courts had power for the purpose of enforcement of fundamental rights and statutory rights to grant consequential reliefs by ordering repayment of money realised by the government without the authority of law. It was reiterated that as a general rule if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by the extraordinary remedy of mandamus. Even if there is no such delay, in cases where the opposite party raises a prima facie issue as regards the availability of such relief on the merits on grounds like limitation the court should ordinarily refuse to issue the writ of mandamus. Though the provisions of the Limitation Act did not as such, it was further held, apply to the granting of relief under Article 226, the maximum period fixed by the legislature as the time within which relief by a suit in a civil court must be claimed may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Article 226 coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill the above circular came to be issued by the CBEC, it also cannot be said that the petitioner could with reasonable diligence have discovered the mistake. It appears that it is only sometime after the Education Cess and Secondary and Higher Secondary Education Cess came to be paid for the month of April 2014 that the petitioner came to know about its mistake and in July 2014, it filed the application for refund before the second respondent. Since the period of limitation begins to run only from the time when the applicant comes to know of the mistake, the application made by the petitioner was well within the prescribed period of limitation. Moreover, as discussed hereinabove, the retention of the Education Cess and Secondary and Higher Secondary Education Cess by the respondents is without authority of law and hence, in the light of the decision of this court in Swastik Sanitarywares Ltd. v. Union of India (supra), the question of applying the limitation prescribed under section 11B of the CE Act would not arise. 15. One of the contentions advanced before this court, which is also a ground for rejecting the refund application, is that the petitioner has paid Education Cess and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication of records, it is observed that the claimant has already self-assessed and paid the duty under rule 6 of the CER 2002 for the period July 2004 to April 2014 which is deemed to be final assessment. Hence the question of finalisation of the same does not arise. For the purpose of claiming any refund on the basis of CBEC circular the assessment is supposed to be pending whereas in the present case the self assessment is deemed to be final assessment and hence the claim even on merits is not admissible." 15.2 Essentially, therefore, the case of the respondents is that self assessment amounts to assessment and in the absence of any challenge thereto, it has become final and, therefore, unless such assessment is set aside, refund cannot be claimed. In this regard it may be germane to refer to the decision of the Supreme Court in CIT v. Shelly Products, (2003) 5 SCC 461, on which reliance has been placed by the learned counsel for the petitioner, wherein the court has held thus: "35. What then is the effect of the failure to make an order of assessment after the earlier assessment made is set aside or nullified in appropriate proceedings? If the Assessing Authority cannot make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is cast upon the Revenue to refund the amount to the assessee without his having to make any claim in that behalf. In appropriate cases therefore, it is open to the assessee to bring facts to the notice of the authority concerned on the basis of the return furnished, which may have a bearing on the quantum of the refund, such as those the assessee could have urged under Section 237 of the Act. The authority concerned, for the limited purpose of calculating the amount to be refunded under Section 240 of the Act, may take all such facts into consideration and calculate the amount to be refunded. So viewed, an assessee will not be placed in a more disadvantageous position than what he would have been, had an assessment been made in accordance with law." 15.3 Though the above decision has been rendered in the context of the Income Tax Act, 1961, two principles can be culled out therefrom insofar as the present case is concerned. Firstly, retention of any amount paid in excess of the liability may offend Article 265 of the Constitution of India. Secondly, even in case of self assessment, if any amount has been paid by way of mistake or inadvertence or on account of ignorance, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said State authority to demand tax, and if such a citizen succeeds, the Court can, in an appropriate case, direct refund of the amount which had been collected by the state authority having no jurisdiction. There are instances where after payment of tax by an assessee, on his prayer, the provisions of imposition of tax has been held ultra vires the Constitution of India and in such a case, the subsequent proceedings for annulment of the proceedings under which the tax was collected cannot be dismissed on the sole ground of payment of tax by the petitioner inasmuch as there cannot be a waiver of constitutional rights of mandatory character or fundamental rights. The only exception to this principle is where the assessee has passed on the burden of tax to the third parties i.e. the consumers. [See Mafatlal Industries Ltd. and Others v. Union of India and Others reported in (1997) 5 SCC 536 = 1997 (89) E.L.T . 247 (S.C.)]. Thus, if the Constitution does not permit an authority to collect tax by enactment of appropriate law vesting such power, merely because such authority has recovered the amount by virtue of ultra vires adjudication, cannot be a factor standing in the way of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificate has been issued on the request of JTI for onward submission to the concerned Central Excise Authorities, in support of refund claim of Primary Education Cess and Secondary & Higher Education Cess on OID Cess. This certificate should not be used other than the intended purpose, without obtaining written permission from them". This certificate has been issued by the customer (M/s IOCL), on the request of the claimant and it has been mentioned that it should not be used anywhere else, without their prior written permission. Hence, this certificate is merely statement without being backed by any supporting documents on the basis of which the veracity of the content could be verified. Hence, this certificate is not having any evidential value. On verification of contents of the said certificates, it is also observed that these are mere statements, without giving the specific details of the relevant financial record i.e. balance sheet, from which the veracity of the said statement could be verified. The above said certificates itself does not have any evidential value, unless the contents of them are supported by documentary evidence." 16.1 At this juncture it may be germane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure not having been adopted by the 3rd respondent, I am of the view that Ext. P10 order passed by him cannot be legally sustained. Resultantly, I quash Ext. P10 order of the 3rd respondent and direct him to consider the matter afresh after affording the petitioner an opportunity of being heard. It will be open to the petitioner to produce supporting materials to substantiate his claim for refund and in particular to establish that by the grant of refund to him, he will not be unjustly enriched. The 3rd respondent shall pass fresh orders in the matter within a period of three months from the date of receipt of a copy of this judgment, after hearing the petitioner, for which due notice shall be given to the petitioner." 16.2 Adverting to the facts of the present case, it is the specific case of the petitioner as averred in paragraphs 5.12 and 5.13 of the memorandum of petition that during the course of personal hearing the petitioner was given to understand that the documents submitted by the petitioner for unjust enrichment are sufficient. It is the case of the petitioner that IOCL is its sole customer, and that the petitioner had furnished a Chartered Accountant's certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the IOCL. Hence reference to clause 15 thereof by the adjudicating authority is misconceived. Insofar as IOCL is concerned there is a Crude Offtake and Sales Agreement and the price at which crude oil is sold is in terms of Article 13 thereof, which is the price clause. For the sake of convenience Article 13 is reproduced hereunder. "ARTICLE 13 - PRICE: [13.1] Initially the contractor shall be paid by IOC a provisional price based on calendar month average FOB selling price for Dubai crude oil per barrel as published in Platt Oil Gram (Article 18.4 .a of PSC). [13.2] Price per barrel of Dholka Crude delivered in any month during the period of agreement shall be calculated using the following formula: [a] Price of deliveries made upto December 1998: A/B less US $ 1.00/bbl. [b] Price of deliveries made from January 1999: A/B less US $ 0.96/BBI. Where A = the sum of the daily mean values of the low and high quotations of "Brent (DTD)" in US $/bbi under the heading "spot Crude Assessment" in Platts Crude Oil Marketwire for each day of the month during which the delivery was made to Buyer. B = the number of day's during the relevant month given in A on which Brent (DTD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It is further stated therein that since, price paid for crude purchased by them from the petitioner is fixed solely on the basis of the international price of crude as traded in the international market and the burden of cess and royalty payable to Government of India is on the seller, they confirm that they have neither paid any cess, royalty over and above the price, nor paid any Education Cess and/or Secondary and Higher Education Cess on such OID Cess to the petitioner. It is further stated that their statement that the certificate dated 20th November, 2014, was issued by them at the request of the petitioner is factually correct. It has been stated that IOCL would never had an occasion to issue such a certificate on its own, unless called for by another party which seeks such certificate. Hence, their obligation to issue such a certificate arises only if such a request is made to them. Reference in this regard may be made to the decision of the Supreme Court in State of Rajasthan v. Hindustan Copper Ltd. (supra), wherein it has been held as follows: "2. On the question of refund, an affidavit of Shri Prashant Swarup, authorised representative of the respondent, has been fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has rightly been stated in the above letter dated 29.07.2015, in the ordinary course, the petitioner would not be required to obtain such a certificate and it is only in the peculiar facts of the present case, where it is called upon to prove that it has not passed the incidence of the Education Cess and Secondary and Higher Secondary Education Cess paid by it to the buyer, that the petitioner was required to obtain such a certificate. Under the circumstances, the adjudicating authority was not justified in not giving due weightage to the letter dated 20.11.2014 issued by the IOCL. In the opinion of this court, the material on record clearly establishes that the incidence of Education Cess and Secondary and Higher Secondary Education Cess has not been passed on to the buyer and hence, the question of any unjust enrichment on the part of the petitioner does not arise. 17.4 On behalf of the respondents, reliance has been placed on the decision of the Supreme Court in Sahakari Khand Udyog Mandal Ltd. v. CCE & Customs (supra), wherein it has been held as follows: "25. It was also argued that the authorities below could not have invoked the provisions of Section 11-B of the Act for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as placed upon the decision of the Supreme Court in CIT v. Chhabil Dass Agarwal, (supra): "11. Before discussing the fact proposition, we would notice the principle of law as laid down by this Court. It is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy. However, the High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226. 12. The Constitution Benches of this Court in K.S. Rashid and Son v. Income Tax Investigation Commission, AIR 1954 SC 207, Sangram Singh v. Election Tribunal, AIR 1955 SC 425 Union of India v. T.R. Varma, AIR 1957 SC 882, Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om "Caesar to Caesar's wife" the existence of alternative remedy would be a mirage and an exercise in futility." 18.1 Reliance was also placed upon the decision of the Supreme Court in Suganmal v. State of M.P., AIR 1965 SC 1740, wherein the court held thus: "6. On the first point, we are of opinion that though the High Courts have power to pass any appropriate order in the exercise of the powers conferred under Article 226 of the Constitution, such a petition solely praying for the issue of a writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax. We have been referred to cases in which orders had been issued directing the State to refund taxes illegally collected, but all such cases had been those in which the petitions challenged the validity of the assessment and for consequential relief for the return of the tax illegally collected. We have not been referred to any case in which the Courts were moved by a petition under Article 226 simply for the purpose of obtaining refund of money due from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of this court in Panoli Intermediate India Pvt. Ltd. v. Union of India, 2015 (326) ELT 532 (Guj), wherein it has been held thus: "(A) The petition under Article 226 of the Constitution can be preferred for challenging the order passed by the original adjudicating authority in following circumstances that - (A.1) The authority has passed the order without jurisdiction and by assuming jurisdiction which there exist none, or (A.2) Has exercised the power in excess of the jurisdiction and by overstepping or crossing the limits of jurisdiction, or (A.3) Has acted in flagrant disregard to law or rules or procedure or acted in violation of principles of natural justice where no procedure is specified. (B) Resultantly, there is failure of justice or it has resulted into gross injustice. We may also sum up by saying that the power is there even in aforesaid circumstances, but the exercise is discretionary which will be governed solely by the dictates of the judicial conscience enriched by judicial experience and practical wisdom of the judge." 18.3 In the earlier part of the order, this court has held that Crude Oil Cess is not in the nature of excise duty and consequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. Insofar as the claim of interest is concerned, the amount admittedly had been paid by the petitioner by way of a mistake. The position of law in this regard was not clear and hence, no fault can be found in the approach of the revenue authorities in retaining such amounts till the time the Circular dated 07.01.2014 came to be issued, clarifying the issue. It has been held hereinabove, that the amount in question is not in the nature of a duty of excise and hence the provisions of the Central Excise Act for refund would not be applicable. Consequently, the provisions of section 11BB of the Central Excise Act, which provides for interest on delayed refund, would also not be applicable. It is settled legal position that in the absence of a statutory provision entitling the assessee to interest, a mandamus cannot be issued to the revenue to pay interest. Though the petitioner has claimed interest at the rate of 18%, the same is not backed by any statutory provision and hence, the relief prayed for in the petition to that extent cannot be granted. TO SUMMARISE:- - Merely because the provisions of the Central Excise Act, 1944 and the rules framed thereunder for collection and refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 93 of the Finance Act, 2004 and section 138 of the Finance Act, 2007 are not satisfied in the present case, and consequently, the said provisions have no applicability to the facts of the present case. The petitioner, therefore, cannot be said to have been liable to pay Education Cess and Secondary and Higher Secondary Education Cess under the above provisions. - In the facts of the present case, the refund is claimed on the ground that the amount was paid under a mistake of law and such claim being outside the purview of the enactment, can be made either by way of a suit or by way of a writ petition. The petitioner was, therefore, justified in filing the present petition before this court against the order passed by the adjudicating authority rejecting its claim for refund of the amount paid under a mistake. - Since Oil Cess is not a duty of excise, the amount paid by the petitioner by way of Education Cess and Secondary and Higher Secondary Education Cess, cannot in any manner be said to be a duty of excise inasmuch as what was paid by the petitioner was not a duty of excise calculated on the aggregate of all the duties of excise as envisaged under the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstitution, the respondents have no authority to retain the same. - If the adjudicating authority was not satisfied with the Chartered Accountant's certificate and the other material produced by the petitioner, he could have called upon the petitioner to produce further documentary evidence in support of its claim that it had not passed on the incidence of duty to the purchaser. However, without affording a reasonable opportunity to the petitioner to produce documentary evidence in support of its claim that there was no unjust enrichment, the adjudicating authority was not justified in holding that there was unjust enrichment. Therefore, the finding that the petitioner's claim is hit by unjust enrichment cannot be legally sustained. - The material on record clearly establishes that the incidence of Education Cess and Secondary and Higher Secondary Education Cess has not been passed on to the buyer and hence, the question of any unjust enrichment on the part of the petitioner does not arise. In the aforesaid premises, there is no need to remit the matter back to the adjudicating authority for examining the aspect of unjust enrichment. - Crude Oil Cess is not in the nature of exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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