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TMI Blog1991 (8) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... upport of the writ petition as also a supplementary affidavit. The facts disclosed therein are as follows :- Between 1st October, 1972 and 30th September, 1973 the sales of cigarettes were affected by the company on principal to principal basis to main dealers. The petitioner declared the assessable value of the goods under Section 4 of the Central Excises and Salt Act, 1944 (for short "the Act") showing the prices charged by it to its main dealers. That was approved by the Central Excise authorities. On 1-12-1972 in A.K Roy and Others v. Voltas Limited [viii] (hereinafter referred to as "Voltas case") the Supreme Court rendered judgment holding that on a true and proper construction of Section 4 of the Act, excise duty should be levied only on the amount representing the manufacturing cost and manufacturing profit excluding post-manufacturing cost and selling profit, on the basis of which the petitioners claimed that Excise duty should have been charged on them after deducting post-manufacturing expenses like advertising expenses, selling expenses and equalised freight. They filed a claim on 29-11-1974 for refund of a sum of Rs. 63,22,319.34 ps. being the differential amount of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim filed for refund by the petitioners on 29-11-1974 for the period 1-10-1972 to 30-9-1973 is within limitation prescribed under Section 17(2) read with Section 29(2) of the Limitation Act. 3. Having explained the mechanics of price fixation of cigarettes the petitioners state that as the pricing considerations to the ultimate smoker are very critical, whenever the manufacturer puts up the prices to recover increase in duty it has to subject itself to losses due to drop in volume levels. It is further stated that the duty increases could never be fully passed on to the customer though the industry generally adopts the 'cum-duty price' for invoicing in respect of sales effected in the distribution structure. In these circumstances the petitioners pray for the relief indicated above. 4. The respondents filed counter-affidavit and additional counter-affidavit. The averments therein disclose that the marketing pattern of the petitioners' business activities which are not disputed, include sale at the factory gate to the main dealers. This factor is sufficient for purposes of Section 4 of the Act. It is stated that by their letter dated 26-4-1973 the petitioners asked the Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise duty was paid and received under mistake of law the petitioners are entitled to refund of the same. It is further submitted that the reasons in the judgment of the Supreme Court in Bombay Tyres case were given on 7-10-1983 and the writ petition was filed on 17-4-1985 which is within three years from the date of the discovery of the mistake of law, therefore, the petitioners are entitled to refund of the Excise duty. 6. Sri I. Koti Reddy, the learned standing counsel for the respondents, on the other hand, contends that respondents 1 and 2 decided the claim of the petitioners for refund of the excise duty on merits and not on the ground of limitation, therefore, having not pressed the appeal before CEGAT the petitioners cannot claim refund for the same amount in this writ petition. He further submits that the claim relates to the period 1972-73 and the writ petition filed after 12 years has to be dismissed both on'the ground of limitation as well as laches. The petitioners have passed on the burden of the excise duty to the ultimate customers, therefore the claim of refund would result in unjust enrichment of the petitioners. For this reason also, submits the learned counsel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (i) that there is no assessable value which the licensee got approved other than the Distributor's price; (ii) that the licensee at no time, protested for approval of this distributor's price as assessable value. On the other hand they have requested for final approval of 'Distributor's price' as the basis for assessment to Central Excise duty; and (iii) that the Central Excise duty paid by the Company on the above price was collected from the consumer and the party did not suffer any loss. As such it is seen that the refund claim is not in order and liable for rejection. ORDER I, therefore, reject the refund claim of Rs. 63,22,319-34 preferred by M/s. Vazir Sultan Tobacco Co., Ltd., Hyderabad." From a perusal of the order extracted above, it is clear that the claim of refund was rejected on merits, but not on the ground of limitation. This order was questioned before the 2nd respondent in appeal. On 9-12-1975 the 2nd respondent dismissed the appeal. Paras 2 and 3 of the said order read as follows :- "2. I have examined the appeal carefully. I have also heard the appellants' counsel. 3. The appellants claim that they are to pay the excise duty on manufacturing cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CEGAT that the case was covered by the decision of the Tribunal in Miles India Ltd. v. Appellate Collector of Customs, Bombay supra and therefore he did not want to press the appeal and in view of that statement it was dismissed as not pressed. It can be seen from the orders of respondents 1 and 2 extracted above, that the Original Authority as well as the appellate authority rejected the claim of the petitioners on merits without reference to the ground of limitation. The impugned order of the 2nd respondent which was the subject matter of the appeal before the CEGAT merged into the said order of the CEGAT dated 31-7-1985 and for this reason the petitioners cannot question the order of the second respondent dated 9-12-1975 in this writ petition. The first point is answered accordingly. 9. Question No. 2 : The contention of Sri K. Srinivasa Murthy is that once the amount is paid under mistake of law the authorities are not entitled to retain the same and the refund of the same can be claimed at any time. He relies on the judgment of the Supreme Court in D. Cawasji and Co. v. State of Mysore [xii]. In that case the appellants filed writ petition before the High Court of Mysore for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue that any unexplained delay in the filing of the writ petition after the expiry of the period of limitation prescribed for filing a suit as unreasonable. This rule, however, cannot be a rigid formula. There may be cases where even a delay of a shorter period may be considered to be sufficient to refuse relief in a petition under Art. 226. There may also be cases where there may be circumstances which may persuade the Court to grant relief even though the petition may have been filed beyond the period of limitation prescribed for a suit. Each case has to be judged on its own facts and circumstances touching the conduct of the parties, change in the situation, the prejudice which is likely to be caused to the opposite party or to the general public." It was further held that having regard to Section 17(1)(c) of the Limitation Act, where in the case or any suit or application for which a period of limitation is prescribed under that Act, the suit or application is for relief from the consequences of a mistake, the period of limitation would begin to run from the date when the plaintiff or the petitioner discovered the mistake, or could have discovered with reasonable diligence. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition filed within six months might be held as barred by laches and there may also be cases where a writ petition filed beyond six months but within the period prescribed by the Limitation Act for a suit for the same relief or even beyond that period might not be treated as barred by laches; each case has to be decided on its own facts taking into consideration the conduct of the parties and the prejudice that would be caused to the opposite party or the general public. 12. In the instant case the petitioners themselves gave the price for approval of the respondents by letter dated 26-4-1973 which was later approved by the department on 7-8-1973. Therefore, they will not be entitled for refund of the duty for the period in question because during that period they did not dispute the correctness of the price given by them and their conduct would disentitle them for refund. 13. Further, the petitioners made a claim for refund of the differential excise duty on 29-11-1974 before the authorities on the basis of the judgment of the Supreme Court in Voltas case which was delivered on 1-12-1972. The present writ petition was filed on 17-4-1985. A suit for recovery of the excise du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted is that the whole of the burden could not be passed on to the consumer having regard to the pricing of the product and the factors that go into the fixation of the price. There is also no categorical averment in the counter-affidavit that the burden of excise duty was passed on to the consumer. However, the 1st respondent in his order dated 11-4-1975, as a fact, held that the Central Excise duty paid by the company on the price fixed by the authority was collected from the consumer and the party did not suffer any loss, therefore, the refund claim was not in order and was liable to be rejected. The question, in a case where granting of refund claim results in unjust enrichment of a person, is the claim liable to be rejected?, is a vexed question. However, in view of our finding on questions 1 and 2, we do not consider it necessary to decide this question in this writ petition. 15. For the above reasons, we do not find any merit in the writ petition. It is accordingly dismissed with costs. Advocate's fee Rs. 250/-. Soon after the judgment has been delivered the learned counsel for the petitioners moved an oral application for leave to appeal to the Supreme Court. In our view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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