LEUKOPLAST INDIA LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner company has filed this petition for a writ directing the respondents, namely the Union of India and the Assistant Collector of Central Excise, to refund the amount of Rs. 17,72,048.75 P. on the ground that this amount was paid as Excise Duty under a mistake of law and that the petitioner be entitled to have it back.

(2.) The petitioner company is manufacturing an article known as LEUKOPLAST Zinc Oxide Self Adhesive Plaster B.P.C. This is an excisable article under the Central Excises and Salt Act, 1944. Before 1975 there was some dispute as to whether this article falls under Item 60. However, that aspect is not relevant for this petition. A residuary Item No. 68 was included in the Schedule in 1975. That entry provides certain Excise Duty for all goods not elsewhere specified in the Schedule. After this addition of residuary Item No. 68 the petitioner started paying the Excise Duty. The petitioner's case is that by reason of an Exemption Notification No. 55/75 the abovementioned article was not excisable. It is not in dispute that under this Exemption Notification all drugs, medicines, pharmaceuticals and drugs intermediates were entitled to exemption. However, it appears that the petitioner in ignorance of this Exemption Notification started to pay and continued to pay the Excise Duty for a long period right from 1975. The petitioner alleges that on 11-3-1980 a clarification was made by the Central Board of Excise and Customs showing that the article in question was entitled to have an exemption. It is in this way that the petitioner learnt that no Excise Duty was payable on the said article. The petitioner on 14th November, 1981, filled a Classification List under the Rules showing that though the said article was falling under Item No. 68, still it was exempted under Notification No. 55/75. The respondent No. 2 approved the said classification. According to the petitioner, this would show that right from 1975 the petitioner was not liable to pay any Excise Duty on the article in question and that the said Excise Duty was paid earlier on account of a mistake of law. Petitioner made an application (Annexure 'E') on 25-1-82 for the refund of the Excise Duty for a period from 8-6-1981 to 31-12-1981. The respondent No. 2 granted the said refund application on 3-3-1982 vide Annexure 'H' to the petition. But this refund was to a limited extent. Under Section 11B of the Act refund is permissible for a period of 6 months before the refund application. Respondent No. 2 therefore granted refund from 25-7-1981 to 31-12-1981. The petitioner then made another application in 1982 for getting a refund for the Excise Duty paid from 1-1-1979 to 25-7-1981. The total amount of Excise Duty paid is Rs. 17,72,048.75P. That application was rejected on 12th October, 1982 (vide Annexure 'K') mainly on the ground that the refund claimed was barred by time. As the Excise Authorities refused to refund the amount, the petitioner has filed the present petition claiming the refund on the ground that the amount question was not payable or recoverable as Excise Duty and that it has been paid under a mistake of law, as the petitioner was not knowing about the Exemption Notification.

(3.) The respondents resisted the petition by filing their return. It is not necessary to give the details of all the averments in the return, as during the course of the arguments only a few points have been pressed before us. It was firstly submitted that the petitioner has not exhausted the remedies of appeal provided by S. 35B of the Act and, as such, no relief should be granted. The second contention is that by getting a refund as claimed in the petition, there will be a sort of unjust enrichment of the petitioner and that the Court should not help the petitioner to get such unjust enrichment. Lastly, it was contended that in view of S. 11B the petitioner would not be entitled to claim any refund if such a claim was made after the period of limitation of 6 months.