9911796707
TMI Blog1994 (1) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1 before the trial Court) is the manufacturer of Phthalate Plasticizers and for the manufacture of the said Plasticizers the respondent company required as raw materials, inter alia, certain industrial alcohol known as ₹ 2 Ethyl Hesanol, ISO Butanol and ISO-Octanol (referred to as the said goods). During the period from March, 1979 to February, 1985 the respondent company imported a number of consignments of the said goods through the Calcutta Port. The respondent Company duly paid the necessary basic or auxiliary duties of Customs payable in respect of the said consignments before obtaining clearance thereof from the appellant authorities, and in addition, paid the additional or countervailing duty under Section 3 of the Customs Tariff Act to the tune of Rs. 23,34,965.03 as levied and demanded by the Customs Authorities. 4.The respondents' case is that they were unaware that the Alcohol of all kinds at the material times were excluded from the purview of levy of duty under the Central Excise Tariff including Item No. 68 thereof, and being unaware of the relevant provisions of law, the respondents paid in respect of the said goods, additional duty or countervailing duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Judge that the impugned levy was under a common mistake, and, therefore, the Customs Authorities could not deny the writ petitioners refund of duty on the plea of limitation under Section 27 of the Customs Act, 1962. The learned Judge held that where the initial levy was without jurisdiction, and realisation illegal, the period of limitation under the Customs Act was not applicable. In such a situation the general law of limitation would be applicable. The learned Judge found that the writ petitioners came to know only in January, 1985 by the said circular dated 1st October, 1984 that the duty as levied was without any authority of law. The writ petitioners immediately thereafter made applications for refund between April and May 1985. 9.Referring to various decisions of the Supreme Court and several High Courts, the learned Judge held that if the duty was collected without the authority of law, the department could not retain the excess duty and the petitioners had the corresponding legal right to recover it. The learned Judge further held that the Writ Court had jurisdiction to grant relief notwithstanding the procedure prescribed by the Act. The learned Judge finally ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the applications for refund on the ground of limitation as prescribed by the Act. Mr. Roy submits that the court in a proceeding under Article 226 of the Constitution should not grant any relief as to refund of duty by lifting the bar of `limitation provided under Section 27(1) of the Act. He has relied on a decision of the Supreme Court in CCE v. Doaba Cooperative Sugar Mills - 1988 (37) E.L.T. 478 and also a decision of this Court in Incheck Tyres v. Assistant Collector of Customs - 1987 (27) E.L.T. 614. 12.Mr. Roy Chowdhury has also argued that Excise Duty or Customs levy is an indirect tax and generally the manufacturer or seller paying the duty passes it on to the buyers. He submits that it is true that if the collection of duty is found to be illegal and without jurisdiction, the concerned authority realising such duties cannot hold on it and is bound to refund the same. But when the assessee passed it on to the buyer, he cannot claim refund just because he has paid the duty and the department collected the same illegally. The learned counsel refers to a decision of this court in Assistant Collector v. Madura Coats reported in 1987 (33) E.L.T. 29, and also a decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a mistake of law with corresponding obligation of the State to repay has been consistently upheld by the Supreme Court as also various High Courts. Mr. Gupta has also argued that the sovereign power to levy tax or duty by the Government is subject to constitutional restrictions under Article 265 of the Constitution which provides that no tax shall be levied or collected except by authority of law. Mr. Gupta also submits if the tax or duty is levied and collected illegally, the same is liable to be refunded and for which direction can be issued under Article 226 of the Constitution even if the claim is found to be barred by rule of limitation under the relevant statute. Mr. Gupta in support of the above submissions has referred to several decisions of the Supreme Court and the High Courts to some of which we will refer presently. 16.The Supreme Court in Salonah Tea Co. Ltd v. Superintendent of Taxes and Ors., 1988 (33) E.L.T. 349 has held, inter alia, that in case of refund of tax collected without authority of law, the State is liable to refund the said amount and the statutory provision under any Special Law providing for refund is inapplicable and the High Court in its writ ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incidence to others does not arise. Mr. Gupta has referred to several decisions on the question of unjust enrichment and they are 1990 (46) Excise Law Times 23 (Bombay), 1988 (35) Excise Law Times 292 (Calcutta), 1987 (30) Excise Law Times 87 (Calcutta) and 1988 (36) Excise Law Times 537 (Andhra Pradesh). 19.Regarding the application of Central Excises and Customs Laws (Amendment) Act, 1991, the submission of Mr. Gupta is that this Act has no application to the instant case since the Act came into force in October, 1991. Further, as submitted by Mr. Gupta, this Act contemplates transfer of the burden of duty along with the sale of the same goods which were imported, Mr. Gupta submits that in the instant case the said goods were imported for the purpose of manufacture of the said Phthalate Plasticizers. It is submitted by Mr. Gupta that the doctrine of unjust enrichment being the genesis of the said Amendment Act has no application to the cases where the imported goods either consumed by the importer or are used by him in the manufacture of other products. In this connection Mr. Gupta refers to a Bombay decision in Solar Pesticides (P) Ltd. v. Union of India, 1992 (57) Excise Law T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame is liable to be refunded, and the courts in a proceeding under Article 226 of the Constitution can direct the authority concerned to refund the amount of duty levied and collected without any authority of law. It has also been consistently held by the Supreme Court that when the tax was levied and collected without authority of law the High Court under Article 226 of the Constitution can grant relief in the order of refund even though the claim is barred by the Special Law of limitation under Section 27(1) of the Customs Act, 1962. In Salonah Tea Co. (supra) the Supreme Court observed that in case of refund of tax collected without authority of law, the State is liable to order for refund and statutory provision under any special law providing for refund is inapplicable. In Shree Vallabh Glass Works Ltd. (supra) it is held by Supreme Court that the court under Article 226 has power to enforce fundamental and statutory rights to make consequential order for refund of money realised without authority of law, and this is an alternative remedy provided by the Constitution in addition and not in supersession of ordinary remedy of suit for recovery of money paid under a mistake of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for refund was in respect of goods imported long prior to the commencement of this Act. Further, there is no evidence of shifting the incidence of duty to other persons. The Bombay High Court in Solar Pesticides case 1992 (57) Excise Law Times 201 (supra) has held that the scheme of the said Amendment Act envisages a direct transfer of the burden of duty along with the sale of the same goods which were imported. But this has no application to the cases where the imported goods are either consumed by the importers or are used by him in the manufacture of other products. In the case of the imported products customs duty paid on it becomes a part of the cost of manufacture of the new item in which the imported component is an ingredient. We respectfully agree with this view of the Bombay High Court. 26.It appears from the judgment under appeal that the learned trial Judge held that the respondent writ petitioners were also entitled to interest @ 10% on the amount to be refunded. Mr. Roy Chowdhury for the appellant also assails this part of the finding of the learned trial Judge. The appellant, not being entitled to recover from the respondent company the duty covered by the 131 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
