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TMI Blog1991 (8) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... cost of packing in respect of special cement should be excluded from the assessable value under Section 4 of the Central Excises and Salt Act, 1944 (hereinafter referred to as the "Act"). The Assistant Collector, Central Excise Customs (opp. party No. 2), rejected the petitioner's contention and included the cost of packing in the assessable value and approved the price list. Against the said order of opp. party No. 2, the petitioner carried appeals to the Collector (Appeals), who is the appellate authority under the Act. The said appellate authority (opp. party No. 1) upheld the contention of the petitioner and held that the cost of packing in respect of special cement was not includible in the assessable value of the cement. In coming to the aforesaid conclusion, the appellate authority took into consideration the Tariff Advice No. 46/79 dated 28-9-1979 and the Government of India's decision in the case of Birla Cement Works. Against this decision of the appellate authority, opp. party No. 1, the Assistant Collector preferred second appeals before the Customs, Excise Gold (Control) Appellate Tribunal (for short, C.E.G.A.T.). The said second appeals were dismissed and the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een passed on to the consumer, an assessee cannot claim refund even if the levy is illegally collected and, therefore, the Assistant Collector would be within his jurisdiction to refuse the prayer for refund on applying the principle of unjust enrichment. Quite a number of authorities were cited by counsel for both sides which we shall discuss later, but we find sufficient force in Mr. Rath's contention that the theory of unjust enrichment has no place in dealing with a claim for refund of duty under Section 11B of the Act and the Assistant Collector is not authorised to exercise that power which a High Court or the Supreme Court exercises under Article 226 or Article 32 of the Constitution. 5.The Bombay High Court in the case of Bombay Burmah Trading Corpn. Ltd. v. Union of India, 1991 (52) E.L.T. 195, considered this question in relation to an application for refund filed under Section 11B of the Central Excises and Salt Act, 1944, and held that in view of the Full Bench decision of the said High Court in the case of New India Industries Ltd. v. Union of India, 1990 (46) E.L.T. 23 overruling the case of Roplas (India) Ltd. v. Union of India, 1988 (38) E.L.T. 27 (Bombay), the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Excises and Salt Act, 1944, as in the present case and directed refund of the duty paid. In the case of Orient Paper Industries Ltd. v. Union of India and Others, 1987 (30) E.L.T. 87 (Cal.), the Calcutta High Court considered a similar question and held that the Assistant Collector had no jurisdiction to restrict the operative part of the order passed by the Appellate Collector and refuse to grant consequential relief on the ground that the appellant had in turn realised the entire amount of duty from its consumers. It was further held that if the excise authority refuses to refund the amount which was unlawfully realised by the petitioner, it would be unlawful enrichment on the part of the Government which cannot be permitted. The Supreme Court in the case of Salonah Tea Company Ltd. etc. v. Superintendent of Taxes, Nowgong Others etc., 1988 (33) E.L.T. 249 (S.C.), considered a similar question and held :- "..... Normally speaking in a society governed by rule of law taxes should be paid by citizens as soon as they are due in accordance with law. Equally, as a corollary of the said statement of law it follows that taxes collected without the authority of law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , subject to the condition of the mill-owners furnishing bank guarantee for the excess price. Under the cover of the order of stay, the mill-owners sold the sugar at the enhanced free-market rate. Ultimately the High Court upheld the controlled price of levy sugar and directed that the bank guarantee furnished should be encashed and be distributed amongst the consumers. Against the said order, the sugar mills had approached the Supreme Court. Their Lordships of the Supreme Court formulated a scheme as to how the needs of both the sugar mills as well as the buyers from whom the higher price had been charged would be met. We fail to understand how this decision is of any application authorising the Assistant Collector to refuse an application for refund otherwise maintainable under Section 11B of the Act. The next case relied upon by the Assistant Collector under the notice is the case of M/s. Shiv Shankar Dal Mills etc. v. State of Haryana and Others etc., A.I.R. 1980 S.C. 1037. In that case market fees having been increased under the provisions of the Haryana Act No. 22 of 1977 from 2% to 3%, the validity of the provision had been challenged. The Supreme Court declared that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that in cases of this nature where there is little or no possibility of refunding the excess amount collected from the ultimate consumer to him and the granting of the relief to the petitioner would result in his unjust enrichment, the Court should not ordinarily direct any refund in exercise of its discretion under Article 226 of the Constitution ...." This observation of the Supreme Court in relation to the exercise of discretionary power under Article 226 of the Constitution will certainly not apply to the power of the Assistant Collector under Section 11B of the Act and, therefore, this decision is of no assistance to the revenue. The next decision relied upon in the notice, Annexure-1, is the case of M/s. Amar Nath Om Parkash and Others v. State of Punjab and Others, A.I.R. 1985 S.C. 218. In that case the validity of Section 23A of the Punjab Agricultural Produce Markets Act, was assailed on the ground that the levy having been held to be invalid, the provision merely validates the levy. That contention was repelled by their Lordships of the Supreme Court on a finding that the said provision does not validate an illegal levy to be legal but merely prevents unjust enrichm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners, the balance tilts in favour of the State as it would be in larger public interest to allow the money to remain with the State so that the same could be used in various welfare activities which the State undertakes. The observations of this Court in the aforesaid case no doubt will have full force when an assessee makes an application for refund in any superior Court like the High Court or the Supreme Court under Article 226 or Article 32 of the Constitution of India. But a distinction has to be borne in mind between the powers of the Assistant Collector when he exercises the said power under the framework of the statute, namely Section 11B of the Act and the powers of the higher Courts under Articles 226 and 32 of the Constitution. When the higher Court's jurisdiction is invoked under Article 226 or Article 32 of the Constitution, the said jurisdiction, is an equitable, discretionary jurisdiction. Therefore, a Court would be fully justified in refusing to exercise its jurisdiction by applying the principle of unjust enrichment of an assessee. But we are unable to persuade ourselves to agree with the submission of the learned Standing Counsel for the Central Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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