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TMI Blog1986 (1) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... for Rs. 25,000/- towards security deposit. The petitioners have paid an excise duty of Rs. 1,27,560 to the Excise Department, under protest on various dates. 3. The petitioners' product is called Crane Nut Powder. It is commonly known in Telugu as Crane Wakkapudi, and in Tamil as Kokku Pakku. 4. Under Tariff No. 68 supari item was exempt from the whole of the duty of excise. This exemption came to be granted under Circular No. 17/75, dated 27-5-1985. Claiming the product of the petitioners as Pan Masala, excise duty is sought to be levied by the respondents. The said Pan Masala is defined as Tariff item 3-A. It contains three parts. The first part gives the contents and its description; and second part talks of the mode of sale, i.e., in unit containers, while the third part clearly states that it should be commonly known as Pan Masala. The petitioners claim that having regard to the price variations and further having regard to the fact that Pan Masala is different from scented supari in shape and in preparation also by the commonly known name, the writ petition has come to be preferred stating that the product of the petitioners would not fall under Tariff Item 3-A. 5. On 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -A, it should be so declared, and any amount paid therein has to be refunded. There cannot be any objection for such a refund. 7. The learned Counsel for the Excise Department Mr. T. Somasundaram, urges that it is still Pan Masala, and that though the scented betel-nut powder cannot be equated to Pan Masala, still having regard to the gredients contained therein, it should fall under Tariff Item 3-A. Whatever it may be, a petition for a mere refund under Article 226 of the Constitution is not maintainable, in view of the decision in Sugnamal v. State of Madhya Pradesh (AIR 1965 SC 1740) since the remedy of suit is still available. Then again, it is not open to the petitioners to claim refund without establishing the fact that they had not passed on the excise duty to the customers. If such a course is permissible, it will amount to the petitioners unjustly enriching themselves. This is precisely the reason a Division Bench of this Court in the decision in Madras Aluminum Co. Ltd. and Another v. Union of India [1981 E.L.T. 478 (Madras) at page 492] held that for claiming refund, it is essential on the part of that person claiming refund to prove that he had not passed on the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould be COMMONLY KNOWN AS PAN MASALA. In my considered view, the difference between scented betel-nut powder and Pan Masala is so telling that there is absolutely no scope for mistake at all. The Supreme Court has pointed out in more than one instance that in matters of classification of this character, the meaning attributed in a common parlance has to be borne in mind. In the decision in Union of India v. G.W.F. Mills [AIR 1977 SC 1548 = 1977 E.L.T. (J 24) (S.C.)], Head-note B reads thus: "The well-known rule in interpreting items in statutes like the Central Excises and Salt Act, 1944 is that resort should be had, not to the scientific or the technical meaning of such terms, but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense." The above decision also related to a case arising under the Central Excises and Salt Act, 1944. The same principle came to be reiterated in the decision in Dunlop India Ltd. v. Union of India [AIR 1977 SC 597 = 1983 E.L.T. 1566 (SC)] and Head-note A reads thus: "Meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Tariff Item 3-A. If it is sought to be classified under Tariff Item 3-A, certainly the court should come to the rescue of the petitioners under Article 226 of the Constitution, because notwithstanding the amendment to the Central Excises and Salt Act, 1944, incorporating Sections 35-B, 35-C and 35-N, still the remedy under the Constitution cannot be taken away by the amendment, more so when it is admitted that the product manufactured by the petitioners, viz., scented betel-nut powder is not known as Pan Masala in common parlance. That is enough for the petitioners to succeed under Article 226 of the Constitution. 12. With regard to the prayer for mandamus, the proper remedy is as laid down by the decision in D. Cawasji Co. v. State of Mysore (AIR 1975 SC 813 at page 816). Paragraphs 16 and 17 read thus: "Be that as it may, the High Court deduced the conclusion from the decision in Tilokchand Motichand's case (1970) 25 STC 289 = (AIR 1970 SC 898) that the question whether a declaration by a court that a law is unconstitutional and therefore void would not always furnish the starting point of limitation for a suit for recovery of the amount paid under that law and that the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty paid in respect of the articles purchased and consumed by him and not the petitioners who produced the articles and who have recouped themselves to the extent of the excise duty paid to the State." After referring to number of cases on this aspect, in paragraph 35, the court concluded as under: "It is well established that the right of the petitioners to get a refund of the excise duty is subject to questions of estoppel, limitation and the like. If peculiar circumstances existed and they showed that the amount the State has to refund really belongs not to the petitioners but to the consumers, then the Court will be justified in refusing to direct refund. In this case, any direction to refund the excise duty to the petitioners will result in their retention of the duty collected by them from the consumers and the court will be siding as unjust enrichment by the petitioners by such a direction. Admittedly the petitioners have passed on the excise duty to the consumers and this was done on the basis that they have paid excise duty to the State. But for the payment of excise duty to the State the petitioners will not be entitled to or enabled to pass on the duty to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected by the assessees and was paid over to the State. Under Section 9-B, clause (3) of the Act, as it stood at the material times, the amount realised by any person as tax on sale of any goods shall, "notwithstanding anything contained in any other provision of the Act, be deposited by him in a Government treasury within such period as may be prescribed if the amount so realised exceeded the amount payable as tax in respect of that sale or if no tax is payable in respect thereof. As the tax collected by the assessee was not exigible in respect of the sales from the purchaser, a statutory obligation arose to deposit it with the State and by paying that tax under the assessment, the assessee must be deemed to have complied with this requirement. But the amount of tax remained under Section 9-B of the Act, with the Government of Orissa as a deposit. If with a view to prevent the assessee who had no beneficial interest in these amounts from making a profit out of the tax collected, the Legislature enacted that the amount so deposited shall be claimable only by the person who has paid the amounts to the dealer and not by the dealer, it must be held that the restrictions on the right of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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