ARPHI INCORPORATED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners manufacture hearing aids, group hearing aids, and speech trainers (hereinafter referred to as "the said goods") at their factory at Prabhadevi, Bombay. The goods manufactured by the petitioners are liable to excise duty under Item No. 68 of the First Schedule to the Central Excise and Salt Act, 1944.

(2.) It appears that there was a Notification No. 55/75, dated 1st March 1975, whereby there was an exemption in respect of the goods which are exciseable under Item No. 68 but relating to artificial limbs and rehabilitation aids for the handicapped. The petitioners' case is that they were not aware of this notification. They started their factory in 1977 and classified their goods under Item 68 and paid the duty without realising that they were not liable to pay the said duty by virtue of the said exemption notification.

(3.) However, sometime in the month of April 1980, the petitioner came to know that they were exempt from the levy of excise duty by virtue of the said notification and, therefore, they filed a fresh classification list dated 23rd May 1980, wherein they claimed the benefit of the exemption under the said notification in respect of the said goods. This classification list was approved by the respondents on the 31st of July 1980. Accordingly, the petitioners filed a refund claim dated 6th August 1980 for Rs. 1,39,503.47 as excise duty collected without the authority of law during the period 1-2-1980 to 31-7-1980. By an order dated 1st December 1980, the Assistant Collector, Respondent No. 2, granted refund of Rs. 51,608.05 an amount of duty refundable for the period 24th May 1980 to 31st July 1980. The ground for refund was that the classification list dated 23rd May 1980 was duly approved on 31st July 1980 and, therefore, the collection of duty during the period between the submission of the classification list and its approval was without the authority of law. However, he purported to reject the balance amount as non-refundable on the alleged ground that the classification list filed earlier had not been filed by claiming exemption during the period 1st February 1980 to 22nd May 1980 and, therefore, the refund was not due. Aggrieved by the said order dated 1st December 1980, the petitioners filed an appeal to the Appellate Collector of Central Excise under Section 33 of the Act and it appears when the appeal was pending, the present petition was filed. In the meanwhile, the petitioners filed another refund application dated 21st April 1981 wherein they claimed a refund of Rs. 4,41,498.42 as duty illegally collected for the period 2nd August 1977 to 30th January 1980. This application was rejected by an order dated 24th November 1981 solely on the ground that the claim was time barred in view of the provisions of Section 11B of the Act. It is against this order the petitioners have filed the present petition. The petition was filed on 12th February 1982.