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Hon’ble Mr. Justice Akil Kureshi &
Hon’ble Ms. Justice Harsha Devani
Swastik Sanitarywares Ltd. & Anr.
Versus
Union of India & Ors.
Special Civil Application No. 4676 of 2004—Decided on 29/08/2012
Central Excise Act, 1944 (Central Act 1 of 1944) — Section 11-B — Customs Act — Section 27 — A pure mistaken deposit of an amount — Second time when such amount of excise duty was already once paid — Revenue can not retain or with hold the same — Such claim would not fall within Section 11B of the Act and respondents are bound to refund — Court therefore directed refund of said amount deposited second time with simple interest at the rate of 9% P.A.
Held :
Court find 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 withhold. Such claim, therefore, would not fall within Section 11B of the Act. It is true that insofar as the Act is concerned, for refund of duty, the provision is contained in Section 11B. However, merely because there is no specific statutory provision pertaining to return of amount deposited under a mistake, per se, in our opinion, should not deter us from directing the respondents to return such amount. Admittedly, there is no prohibition under the Act from returning such an amount. Allowing the respondents to retain such amount would be, in our opinion, highly inequitable. [Para 15]
Law Laid Down :
Availability of appeal is not a total bar in entertaining a writ petition.
Akil Kureshi, J.—The petitioners have challenged an order dated 23.3.2004 passed by the Respondent No. 3 – Deputy Commissioner of Central Excise. The petition arises in following factual background. The petitioner No. 1 is a company registered under the Companies Act. The petitioner No. 2 is the office bearer of the company. The company is engaged in the business of manufacture of sanitary wares which are excisable goods. The petitioner company cleared its final product during the period between June, 2002 and September, 2002 on payment of excise duties totalling to Rs. 91,129/-. The petitioners due to a pure clerical error, paid the same amount of duty on same clearances all over again by debiting the amount in the Personal Ledger account.
2. Realising that the sum of Rs. 91,129/- was paid twice, the petitioners filed a refund claim before Respondent No. 3 on 1.11.2003. The Respondent No. 3, however, prima facie, finding that the refund claim was barred by limitation, issued a show-cause notice dated 9.1.2004 calling upon the petitioners to show cause why the same should not be rejected. It was contended that the refund claim was made beyond a period of one year which was the limitation period prescribed under the law.
3. The petitioners filed a detailed reply to the show-cause notice under communication dated 10.2.2004. In the reply to the show-cause notice, they elaborated that the amount was paid second time erroneously, the same was, therefore, not excise duty and the revenue should, therefore, in all fairness, refund the same. It was pointed out that the duty in question relates to five consignments exported by the petitioners to Nepal. The total duty of Rs. 91,129/- was paid at the time of export. Second time at the month end of each month of clearance, such duty was paid by making necessary debit entries in the Personal Ledger Account of the petitioner No. 1 company. It was contended that in view of the said facts, the provisions of Section 11B of the Central Excise Act, 1944 (‘the Act’, for short) would not apply. It was contended that the Government has no jurisdiction to retain such amount erroneously deposited.
4. The adjudicating authority, however, passed impugned order dated 23.3.2004 rejecting the refund claim. In the order, he accepted the petitioners’ contention that the duty was paid twice on the same goods. He recorded as under:
“Next argument of the assessee that duty is paid twice on the same goods and therefore, the claim is admissible, I find that even though the duty payment is not disputed, refund cannot be decided solely on this ground. In fact, time-bar aspect is having an overriding effect even if the refund is admissible on merit.”
Principally on this ground, he rejected the refund claim. The petitioners had referred to a judgment of this court in case of Indo-Nippon Chemicals Co. Ltd. & Anr. vs. Union of India & Ors. reported in 2002 (49) R.L.T. 642 to which he recorded that the High Court and the Supreme Court only have power to entertain such a claim. He, however, would not have any jurisdiction to ignore the limitation period provided in Section 11B of the Act.
5. This order, the petitioners have challenged directly before this court mainly on the ground that there being no disputed questions at all, the petitioners may not be relegated to the alternative remedy of appeals. Such petition was entertained and admitted by this court way back in the year 2004.
6. Learned Counsel for the petitioners raised following two contentions:—
(1) that the amount paid second time would not take the character of duty. Such amount cannot be retained by the Government. Refund claim, therefore, should have been granted without reference to the period of limitation prescribed under Section 11B of the Central Excise Act.
6.1 In support of such contention, Counsel referred to the following decisions of the Tribunal opining that when an amount is paid in excess of the customs duty payable, such amount cannot be consi
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