Writ refund of wrongly paid excise duty not barred by Rule 11 limitation or unsupported unjust enrichment objections.

Refund of duty wrongly paid under the Central Excise regime was held not to be barred in writ jurisdiction by the six-month limitation in Rule 11, because Article 226 relief is not controlled by that administrative time limit where duty was wrongly recovered. The objection of unjust enrichment also failed because the Department filed no affidavit or supporting material to show that the duty burden had been passed on. A plea of laches was rejected in the absence of demonstrated prejudice to revenue. The earlier refusal of refund was set aside, subject only to verification and payment of the refundable amount.

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Issues: (i) Whether the limitation in Rule 11 of the Central Excise Rules barred refund of duty wrongly paid when relief was sought under Article 226 of the Constitution of India; (ii) Whether the refund could be denied on the ground of unjust enrichment in the absence of an affidavit and supporting material from the Department; (iii) Whether laches on the part of the petitioners justified refusal of refund.

Issue (i): Whether the limitation in Rule 11 of the Central Excise Rules barred refund of duty wrongly paid when relief was sought under Article 226 of the Constitution of India.

Analysis: The petitioners had paid duty under Tariff Item 68 though the goods were assessable under Tariff Item 15A(2) and were entitled to exemption under Notification No. 68/71 dated 29.05.1971. The Assistant Collector could grant refund only within the six-month period under Rule 11, but the writ court's jurisdiction under Article 226 was not controlled by that limitation in a case of duty wrongly recovered.

Conclusion: The limitation under Rule 11 did not bar the grant of refund in writ jurisdiction, and refund was allowable for the earlier period in favour of the petitioners.

Issue (ii): Whether the refund could be denied on the ground of unjust enrichment in the absence of an affidavit and supporting material from the Department.

Analysis: The Department relied on the principle that refund should not result in unjust enrichment, but it filed no affidavit and produced no material to show that the duty burden had been passed on to others. In the absence of such foundation, the objection could not be examined on merits.

Conclusion: The plea of unjust enrichment failed and did not defeat the claim for refund.

Issue (iii): Whether laches on the part of the petitioners justified refusal of refund.

Analysis: The petitioners approached the Court after the Assistant Collector declined refund for the earlier period, and no prejudice to the revenue was shown. Retention of duty wrongly collected could not be sustained merely on a plea of delay.

Conclusion: The objection based on laches was rejected and did not bar relief.

Final Conclusion: The refusal to refund duty for the earlier period was set aside, the matter was sent back only for verification and payment of the refundable amount, and the petitioners were held entitled to refund of the duty wrongly paid.

Ratio Decidendi: Limitation under Rule 11 of the Central Excise Rules does not preclude a refund of duty wrongly collected when sought in writ jurisdiction under Article 226, and objections based on unjust enrichment must be supported by a factual foundation from the Department.

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