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1992 Supreme(All) 714
IN THE HIGH COURT OF ALLAHABAD
A. P. Misra and M. C. Agarwal, JJ.
ATMA STOOLS LTD. - Appellant
Versus
UNION OF INDIA - Respondents
Civil Misc. Writ Petition 908 Of 1990
Decided On : 11/27/1992
The burden of proof in a refund claim under Section 11B of the Central Excise Act, 1944, shifts to the petitioner to prove that it has not collected the amount from the customers for which it is making a refund claim.
Headnote:
CENTRAL EXCISE ACT, 1944 - SECTION 11B - REFUND OF DUTY - BURDEN OF PROOF - AMENDMENT - APPLICABILITY - DUTY PAID CHARACTER - PROOF - SECONDARY EVIDENCE - BURNING OF DOCUMENTS - DUTY PAID CHARACTER NOT FULLY ASCERTAINED - REFUND CLAIM REJECTED - IMPUGNED ORDER QUASHED - FRESH DECISION DIRECTED.
Fact of the Case:
The petitioner, a manufacturer of cold rolled strips, claimed reduction in the rate of duty on such strips under Notification No. C. E. 209/83. Initially, the concession was granted but later withdrawn on the ground that annealing is only a finishing process where electric furnace is used and cold rolled strips are produced before the use of electric furnace. The petitioner's appeal before the Collector of Appeals and the Tribunal was allowed, and the petitioner filed a refund claim. The Assistant Collector sanctioned a partial refund, but rejected the claim for Rs. 1,54,865. 56 paise on the ground that duty paid character was not fully ascertained in the absence of certain documents, which were burnt in riots.
Finding of the Court:
The court found that the impugned order refusing the refund claim was not sustainable in the eyes of law, as the Assistant Collector had not applied his mind to the secondary evidence filed by the petitioner to prove the duty paid character of the goods. The court also held that the amendment to Section 11B of the Central Excise Act, 1944, which shifted the burden of proof to the petitioner to prove that it had not collected the amount from the customers for which it was making a refund claim, would be applicable to the petitioner's case, as the refund claim was still pending.
Issues: 1. Whether the impugned order refusing the refund claim was sustainable in law? 2. Whether the amendment to Section 11B of the Central Excise Act, 1944, would be applicable to the petitioner's case?
Ratio Decidendi: 1. The court held that the impugned order was not sustainable in law, as the Assistant Collector had not applied his mind to the secondary evidence filed by the petitioner to prove the duty paid character of the goods. The court also held that the Assistant Collector had erred in rejecting the refund claim solely on the ground of non-production of the documents which were said to have been burnt in the riots. 2. The court held that the amendment to Section 11B of the Central Excise Act, 1944, would be applicable to the petitioner's case, as the refund claim was still pending.
Final Decision: The court quashed the impugned order and directed the Assistant Collector to decide afresh in the light of the observations made by the court, preferably within a period of three months of filing of a certified copy of the order before the said authority.
( 1 ) REJOINDER affidavit has been filed today.
( 2 ) HEARD learned counsel for the petitioner and also the learned standing counsel.
( 3 ) IN view of the exchange of affidavits in accordance with the Rules of the Court, the present writ petition is being disposed of finally at the state of admission.
( 4 ) THE petitioner seeks quashing of Memorandum No. 114/90 dated 4th June, 1990 passed by the assistant Collector of Central Excise Division III, Ghaziabad-respondent No. 2 and further directing the respondent to refund the duty amounting to Rs. 1,54,865. 56 paise levied and collected from the petitioner during October, 1984. The petitioner is manufacturing cold rolled strips using duty paid hot rolled strips and claimed reduction in the rate of duty on such cold rolled strips under Notification No. C. E. 209/83. Initially the concession of reduction of duty at rs. ISO/- per metric ton were granted, but subsequently it was withdrawn on the ground that annealing is only a finishing process where electric furnace is used and cold rolled strips are produced before the use of electric furnace. The petitioner appeal against the withdrawal of the concession before the Collector of Appeals, New Delhi, who also denied the concession granted by the said notification. Thereafter the petitioner went in appeal before the Tribunal who allowed the appeal and held that the petitioner was entitled for the reduction in duty envisaged in the notification No. C. E. 209/83. In subsequent thereof the petitioner filed a refund claim of Rs. 19,09,029. 43 paise, but the Assistant Collector, Central Excise, Division III, vide letter dated 11th November, 1986 sanctioned the refund of Rs. 16,02,909. 36 p. and deducted Rs. 3,06,120. 07 paise. The petitioner again went in appeal before the Collector (Appeals), who allowed the appeal vide order dated 15th April, 1988 with the observation that the refund of duty should be allowed subject to verification of the same. Finally the Assistant Collector, Central Excise division III, Ghaziabad, by means of impugned order dated 4th June, 1990 which is Annexure 8 to the writ petition, sanctioned an amount of Rs. 1,52,674. 89 paise, out of the aforesaid amount and denied the claim of refund for Rs. 1,54,865. 56 paise. It is this denial of refund by means of impugned order is subject matter of challenge before us.
( 5 ) LEARNED Counsel for the petitioner urged that the reason for rejecting the said claim is unsustainable. The impugned order refusing to grant exemption for the amount referred to therein is only on the ground that duty paid character was not fully ascertained in the absence of p. L. A. (Personal Ledger Account) and R. G. 23 Pt. II and T. R. 6. The contention on behalf of the petitioner is that since records of October, 1984 were burnt in riots, therefore, it was not possible for filing those documents before the said authority. However, the secondary evidence specially gate pass pertaining to October, 1984 were all filed without the gate passes alongwith Bank account showing the payments for the relevant month in question were all filed, but the said authority, without applying its mind on the same, rejected the claim of the petitioner. This approach of the said authority is illegal specially in view of the fact that the said documents were burnt in the riots and the petitioner could under no circumstances have produced those documents.
( 6 ) HAVING heard learned counsel for the parties we find that as per Range Officers report no records are available either with him or with the party to verify the duty paid character. The party has submitted gate pass of some clearance, but in absence of P. L. A. and R. G. 23 Ft. II and T. R. 6 the duty paid character cannot be fully ascertained. In October 1984 riots the records are said to have been burnt and the party had not filed any R. T. I 2 in November, 1984. The aforesaid report shows that even during the enquiry the records were not available
