2017 (1) TMI 1225 - HC - Central Excise

Court emphasizes statutory remedies over writ jurisdiction for mixed fact and law questions.

The High Court dismissed the writ petitions, emphasizing the need to exhaust statutory remedies before resorting to writ jurisdiction. The court held that ... Maintainability of petition - Unjust enrichment - refund claim - refund claim rejected on the ground that there are multiple remedies to challenge this order. Firstly, there is a remedy to approach the Commissioner (First Appellate Authority) and eventually the Tribunal. Held that: - Once we have seen that this is not a case entirely based on refund of amounts deposited as pre deposit but there was a blend or mix of such sums with the amount paid under protest, then, all the more we do not think that the judgments on the point of a writ being maintainable despite availability of alternate efficacious remedy would be applicable in the facts of this case. We are mindful of the fact that availability of an alternate equally efficacious remedy is not an absolute bar in entertaining a writ petition under Article 226 of the Constitution of India. It is not a prohibition but a rule of caution and prudence. Eventually everything must depend on facts and circumstances in each case. The petitions cannot be entertained on the ground that there are factual issues involved. The mixed questions of fact and law are, therefore, capable of being properly resolved in the appellate remedies available to the petitioners under the scheme of the Central Excise Act - petition dismissed as not maintainable - decided against petitioner. Issues Involved:1. Maintainability of writ petitions under Article 226 of the Constitution of India.2. Application of the principle of unjust enrichment.3. Requirement of showing duty as receivable in accounts.4. Rejection of refund claim and interest.Detailed Analysis:1. Maintainability of writ petitions under Article 226 of the Constitution of India:The court addressed the preliminary objection raised by the Additional Solicitor General regarding the maintainability of the writ petitions under Article 226. The objection was based on the availability of multiple remedies, including approaching the Commissioner (First Appellate Authority) and the Tribunal, before seeking relief from the High Court. The petitioners argued that their case involved pure questions of law and cited precedents where the courts entertained writ petitions despite the availability of alternate remedies. The court, however, concluded that the petitions involved mixed questions of fact and law, making it inappropriate for direct intervention. The court emphasized that the availability of an alternate remedy is not an absolute bar but a rule of caution and prudence, and in this case, the appellate remedies under the Central Excise Act were deemed appropriate.2. Application of the principle of unjust enrichment:The court examined the Deputy Commissioner's finding that the refund claim was hit by unjust enrichment. The petitioners contended that the duty paid under protest was not passed on to the consumers, relying on various documents and Chartered Accountant's certificates. The Deputy Commissioner, however, found that the petitioners had not satisfactorily demonstrated that the incidence of duty was not passed on. The court observed that the Deputy Commissioner's findings were based on a detailed analysis of the petitioners' accounts, market practices, and the principle of unjust enrichment. The court noted that resolving these factual matters required a thorough examination, which was more appropriate for the appellate authorities.3. Requirement of showing duty as receivable in accounts:The petitioners argued that there was no legal obligation to show the duty paid under protest as receivable in the accounts. They contended that the Deputy Commissioner applied an erroneous test by insisting on this requirement. The court found that the Deputy Commissioner's order did not solely hinge on this accounting treatment but considered various factors, including the petitioners' market practices and cost structures. The court concluded that determining the correctness of the accounting treatment and its implications on the refund claim involved factual inquiries best suited for the appellate process.4. Rejection of refund claim and interest:The Deputy Commissioner rejected the refund claim and the interest thereon, citing deficiencies in the petitioners' submissions and the principle of unjust enrichment. The court noted that the refund claim comprised both amounts paid as pre-deposit and duty paid under protest. The court emphasized that the Deputy Commissioner's decision was based on a comprehensive review of the petitioners' documents and accounts, and any errors in applying legal principles could be addressed in the appellate proceedings. Consequently, the court refrained from expressing any opinion on the merits of the refund claim and directed the petitioners to pursue their remedies under the Central Excise Act.Conclusion:The court dismissed the writ petitions, directing the petitioners to seek relief through the available appellate remedies. The court clarified that it expressed no opinion on the merits of the refund claim or the correctness of the Deputy Commissioner's findings, leaving these issues open for determination in the appellate process. The decision underscores the importance of exhausting statutory remedies before invoking the writ jurisdiction of the High Court, especially in cases involving mixed questions of fact and law.