NEO PHARMA PVT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) RULE returnable forthwith. Shri Deodhar waives service on behalf of the respondents. Heard counsel.

(2.) BY this petition filed under Article 226 of the Constitution of India, the petitioners are challenging legality of order dated July 19, 1991 passed by Assistant Collector, Central Excise, division H, Bombay, confirming the demand of Rs. 1,42,092. 74 under Section 11a of the central Excises and Salt Act. The petitioners were sanctioned refund claim of Rs. 1,42,092. 74 by assistant Collector of Central Excise by order dated September 14, 1989. After the amount was paid to the petitioners, the Assistant Collector felt that as the petitioners had recovered the duty refunded from the Customers/buyers from time to time and as per the settled law, it amounts to unjust enrichment and, therefore, the refund claim appears to be erroneously granted. The assistant Collector served a show cause notice dated January 18, 1990 on the petitioners to explain why the refund should not be recovered under Section 11a of the Central Excises and salt Act. The petitioners pointed out that the principle of unjust enrichment is not available to the authorities constituted under the Act. The Assistant Collector did not accept the claim and relying upon the decision in M/s. Roplas (India) Ltd. v. Union of India reported in 1988 (38)Excise Law Times 37 (Bom.) held that the refund was erroneously paid. The Assistant Collector, therefore, directed the petitioners to repay the said amount of Rs. 1,42,092. 74. The order of the assistant Collector of Central Excise is under challenge.

(3.) SHRI Pochkhanwala, learned Counsel appearing on behalf of the petitioners, submitted that the impugned order is entirely unsustainable. The submission is correct and deserve acceptance. In the first instance, reliance upon the decision in Roplas case is totally erroneous. It has been held by catena of decisions of this Court that it is not permissible for the Department constituted under the statutory provisions to deny relief of refund on the ground of unjust enrichment. The refund granted to the petitioners in pursuance of the order passed by the Assistant Collector could not have been recovered back by resort to this doctrine. The order is entirely unsustainable and is required to be quashed.