GODAVARI PLYWOOD LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners is seeking to issue a writ of mandamus to direct the respondents to refund Rs. 96,331- 47Ps., claiming that it was an illegal collection. The petitioner is a manufacture of plywood and allied products including flush doors. Their products were assessed to excise duty. Flush doors were taxed under Item 16-B of Schedule I of the Central Excises and Salt Act(1 to 1944), for short, "the Act" at 24%+5% on basic excise duty as special excise duty. The petitioner paid the same without any demur for the period from 18/01/197 8/10/1980. Messrs. Woodcrafts Products, Delhi, when questioned the levy under the said Tariff Item 16-B, the Delhi High Court by judgment dated 17/03/1980 held that the goods were exigible to tax under residuary Item No. 68, ranging from 5% to 8%. It was confirmed by the Supreme Court on refusing special leave. The first respondent, in excise of the power conferred under Rule 8(1) of the Central Excise Rules, 1944, for short, "the Rules", issued the Notification No. 162/81 -C.E., dated 11/09/1981, deleting the words "including flush doors" from Item 16-B. It was published in the Gazette and the Collector, Central Excise, Guntur communicated on 2/10/1981, to all concerned. The petitioner in the meanwhile, by his application dated 11/05/1981 requested the Assistant Collector, Central Excise, fourth respondent to refund the difference of the duty. Thereon the fourth respondent issued a notice dated 16/09/1981, to show cause why the refund claim should not be rejected. Pursuant thereto, the petitioner submitted the explanation on 29/10/1981 and requested for personal hearing which was given. After consideration on merits, the forth respondent held that Section 11-B of the Act which came into force from 14/11/1980 prescribed a period of six months from the date of payment of duty and the claim is barred by limitation under sub- section (1) of Section 11-B of the Act. Accordingly, the claim for refund was rejected. It was confirmed by the Appellate Collector (Respondent No. 3) by order dated 22/09/1982 and also by the Appellate Tribunal, Southern Region (Respondent No.2) by order dated October 1983. Hence the writ petition.

(2.) Sri. K. Srinivasan Murthy, learned counsel for the petitioner has contended that under Article 265 of the Constitution, the authority has no power to levy or collect the excise duty under Item NO. 16-B on flush doors as held by the Delhi High Court resulting delection of the item from the Statute. Therefore, it is a mutual mistake of law by the petitioner and the 4th respondent. Under Section 72 of the Contract Act, the petitioners is entitled to refund. Though under Section 11-B the authorities are bound by the statutory prescription of six months and were justified to reject the claim, the jurisdiction of this Court under Article 226 of the Constitution is still available to claim for refund. The restriction imposed by the Act does not stand in the way of this Court to grant the relief. The claim for refund is within three years though barred under the Act and this Court may issue a mandamus directing the authorities to refund the excess collection of excise duty. In support of this contention, he relied on Sri Vallabh Glass Works v. Union of India-1984(16) E.L.T. 171 (S.C.), Kesoram Cement v. Union of India-1982 E.L.T. 214 (A.P.) and D. Gawasji and Co. v. State of Mysore-AIR 1975 S.C. 813. Despite the amendment and Section 11-B of the Act, a Division Bench of the Bombay High Court in Leukoplast (India) Ltd. v. Union of India-1983 E.L.T. 2106 (Bom.) directed refund when the claim si within three years. He banked heavily on it. It is further contended that when the goods are not exigible to duty under Item 16-B but was paid by mistake of law, the limitation prescribed under Section 11-B has no application and therefore the Court can grant the relief under Article 226 of the Constitution. In support thereof, he relied on the decision reported in Vazir Sultan Tobbaco Co.Ltd. v. Union of India-1981 E.L.T. 140(Del); Canara Rubber Product Pvt Ltd. v. Assistant Collector of Central Excise-1983 E.L.T. 97 (Kar.) and Golden Tobacco Company Ltd. v. Union of India-1983 E.L.T. 2238 (Bom.). He also placed before the Court series of orders passed by the Supreme Court and by this Court where refund was ordered.

(3.) Sri Jagannadha Rao, learned senior standing counsel for the Central Government has fairly conceded that though the jurisdiction of the Courts was ousted by operation of sub-section (5) of Section 11-B of the Act, it has no effect on the exercise of jurisdiction under Article 226 and in appropriate cases, writs or orders could be issued. But in this case, that jurisdiction cannot be exercised for the reason that the petitioner had already invoked the jurisdiction of the authorities. The authorities are not bound to grant the relief under Section 11-B if the claim for refund is made after six months from the duty. Admittedly, the claim was made beyond six months. Therefore, the authorities have rightly rejected the claim for refund. In support thereof, he relied on Burmah Construction Co. v. State of Orissa-AIR 1962 S.C. 1320 and In check Tyres Ltd. v. Assistant Collector-1979 E.L.T. 236 (Cal). He further contended that the Amendment was made by the Legislature with a view to prevent the manufacture or producer to have unjust enrichment on refund of the amount. While exercise the jurisdiction under Article 226 that principle has to be kept in view. He distinguished the decisions relied upon by the learned counsel for the petitioners on the ground that earlier to the amendment, the Supreme Court and the High Courts granted refund when the claim was within three years. Now the Legislature has amended and introduced Section 11-B prescribing the limitation as six months to claim refund. Therefore the decision of the Supreme Court in Vallabh Grass works case (supra) has no application to the facts of this case. With regard to Lekoplast case (supra) he contended that the Division Bench has not laid down the law correctly. Therefore, it does not furnish a valuable assistance. He did not cite any other authorities, on these aspects.