TaxTMI 
TaxTMI 
1995 (11) TMI 113
X X X X Extracts X X X X
X X X X Extracts X X X X
....ca crucibles, the Assistant Collector of Customs classified the goods for assessing duty under the Heading No. 70.21, which related to 'other articles of glass', in view of Chapter Note 3 of Chapter 17, which states, "for the purposes of this schedule 'glass' is to be taken to extend to fused quarts and fused silica". Item No. 23A(4) of CET states that for other glass and glassware including tableware the duty shall be as prescribed therein. Under Section 3 of the Customs Tariff Act, 1975 (Act No. 51 of 1975 - for short CUSTA'), "any article which is imported into India shall, in addition, be liable to a duty (hereinafter in this section referred to as additional duty) equal to the Excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the imported article." Hence under CUSTA, the additional duty should be equal to the excise duty on a like article manufactured in India. 4.The company filed claim petitions for refund on the ground tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcumstances, the company filed Writ Petition Nos. 2914, 2915, 2916, 2947 and 2948 of 1984 for issue of Mandamus directing (1) the Collector of Customs, Customs House, Madras - 600 001; (2) Union of India through the Secretary, Ministry of Finance, Department of Revenue and Banking, Central Secretariat, North Block, New Delhi; and (3) the Assistant Collector of Customs (Refunds), Customs House, Madras - 600 001 - (appellants in all Writ Appeals - respondents), to refund the sum of Rs. 1,46,918.81, Rs. 31,195.73, Rs. 1,62,281.81, Rs. 26,648.16 and Rs. 76,648.16, being the amount collected as additional duty or countervailing duty under item 23A(4) of CET respectively on bill entries Nos. D.1211, dated 28-4-1982; D.1212, dated 22-3-1980; D.262, dated 5-7-1982; D.1105, dated 19-12-1980 and D.1106 dated 19-12-1980. 10.During the pendency of the above Writ Petitions, the Central Excises and Customs Laws (Amendment) Act, 1991 (Act 40 of 1991 - for short 'Amendment Act'), which was published in the Gazette of India, Extraordinary, Part II Section 1, No. 54, dated 18th September, 1991 came into force. 11.Sub-sections (2) and (3) of the substituted Section 27 and the newly introd....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ontrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the regulation made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub section (2).......................... 28C.Price of goods to indicate the amount of duty paid thereon. - Notwithstanding anything contained in this Act or other law for the time being in force, every person who is liable to pay duty on any goods shall at the time of clearance of the goods, prominently indicate in all the documents, relating to assessment, sales invoice and other like documents, the amount of such duty which will form part of the price at which such goods are to be sold. 28D.Presumption that incidence of duty has been passed on to the buyer. - Every person who had paid the duty on any goods under this Act shall, unless the contrary is proved by him be deemed to have passed on the full incidence of such duty to the buyer of such goods." 12.After the amendments came into force, the appellants-respondents filed a counter --- contending that the Writ Petitions were not maintainable, inasmuch ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cept in a case, where the duty is paid "under protest"; (4) The Assistant Collector, being a statutory authority, cannot act beyond the scope of the provisions of the Act and cannot enlarge the period of limitation under the Act; (5) In case, where the claimant is lawfully entitled to refund institutes appeals or other proceedings and obtains an order or decree; but beyond the prescribed time, he cannot apply before the Assistant Collector for refund within the specified period and thereby he is deprived of the benefit albeit the order or decree obtained by him for refund and in these circumstances, the claimant has no other go except to approach this Court under Article 226 of the Constitution, instead of approaching the statutory authorities prescribed under the Act; (6) The provision, like Section 28C of the Act cannot be made applicable with reference to imports that were made before the introduction of such a provision. It is on the findings, as above, learned single Judge, by order dated 20-3-1992, allowed all the Writ Petitions as prayed for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A') and hence not subject to any Central Excise duty. This claim was initially rejected by the Assistant Collector of Central Excise, Central Excise Division, No. 4-A, Promenade Road, Trichy-620 001 (respondent) and hence the petitioner was to pay Central Excise duty 'under protest' in terms of Rule 233B of the Central Excise Rules, 1944 (for short 'CE Rules'), pending appeal proceedings. (e) This controversy was finally settled by the respondent, on remand made by the Appellate Tribunal, by its order No. 65/90, dated 25-9-1990, wherein the respondent held that RF solution manufactured and used by the petitioner is not 'goods' and no duty, therefore, is leviable on the same. (f) Consequent upon the order of the respondent, the Petitioner filed a refund claim dated 14-3-1991 for refund of a sum of Rs. 5,41,498.67, being the duty paid 'under protest' during the period from 1-4-1983 to 20-10-1986 under Section 11B of CESA, as it stood then. In terms of the erstwhile Section 11B, any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the aircraft in which such goods are loaded, leaves India, or (ii) if the goods are exported by land, the date on which such goods pass the frontier, or (iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India; (b) in the case of goods returned for being remade, refined, reconditioned, or subject to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid; (c) in the case of goods to which banderols are required to be affixed if removed for home consumption but not so required which exported outside India, if returned to a factory after having been removed from such factory for export out of India, the date of entry into the factory; (d) in a case where a manufacturer is required to pay a sum, for a certain period, on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal of any Court or in any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2). Every(4) notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and if it is not sitting, within seven days of its re-assembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder. For(5) the removal of doubts, it is hereby declared that any notification issued under clause (f) of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to consumers indirectly, as the value of finished goods would have included the duty paid on RFL solution. (k) The petitioner filed a detailed reply on 3-4-1992 to the show-cause notice of the respondent relying upon the judgment of this Court in Writ petition Nos. 2914, 2915, 2916, 2947 and 2948 of 1984 in the case of Indo-Swiss Synthetic Gem Manufacturing Company Ltd. v. Union of India and Others delivered on 20-3-1992 [1992 (59) E.L.T. 345 (Mad.)] in a matter arising under Section 27 of the Act, which had provision relating to refund in pari materia with amended Section 11B of CESA. The petitioner also contended that when it has been held that RF solution is not 'goods' at all, the collection and retention of any sum, done outside the provisions of CESA was totally without the authority of law and without jurisdiction. (l) The petitioner further contended that the invoking of unjust enrichment proposition would apply only when the duty has been passed on to a buyer directly and in the case of captive consumption, there can be no question of passing on the duty liability or the inciden....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er mistaken impression of law, for the period from 17-10-1983 to 20-10-1986, amounting to Rs. 5,41,498.67 is not at all refundable to the petitioner inasmuch as RF solution is used as a raw material or input in the manufacture of RFL solution, which again is used in the manufacture of 'dipped man made fabrics' and thus, forming part of the cost of the final product and consequently, passing on the duty paid indirectly to the buyers of the dipped man made fabrics. Further, the burden that the duty paid has not been passed on to the customers or buyers of the end product or the same had been borne by him squarely rests on the shoulders of the petitioner and unless and until proof on such aspects of the matter, forthcoming, it has to be presumed that the duty paid has been passed on to the customer or buyer, in which event there is no other go except to credit the refund of the duty so paid to the Consumer Welfare Fund. Above all, the Writ Petition is liable to be dismissed in limine on the ground of alternative statutory remedy. 18.Learned single Judge, before whom the Writ Petition was pending, appeared to have directed the Registry to post it, along with Writ Appeals as above, o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....report dated 4-9-1996, which reads as under : "Report of visit to the Indo-Swiss Synthetic Gem Manufacturing Company Limited, Mettupalayam - 641 301 on 30-8-1995. I visited M/s. The Indo-Swiss Synthetic Gem Manufacturing Company Limited on 30-8-1995 after giving notice as per Order of Hon'ble Madras High Court and studied the manufacturing process. In brief the Manufacturing activity of Synthetic Gems can be described as given below :- 1.PREPARATION OF DOUBLE SULPHATE CRYSTALS : Double Sulphate is manufactured from the solutions of Aluminium Sulphates and Ammonium Sulphates. On cooling the mixed solutions of these two salts tiny crystals of double Sulphate or Ammonical Alum are formed. The Crystals are separated from the mother liquor by centrifuging and dried in drier. C2.ALCINATION : The Double Sulphate Crystals are weighed and orieined in an oil fired muffle furnace at around 1200ºC. The dried double sulphate is taken in A QUARTZ CUPS OF SILICA CRUCIBLES which are kept in muffle furnace. Silica Crucibles are used for following properties : 1. Ability to withstand high temperature. 2. &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp; Whether the Scheme of the Amendment Act envisages a direct transfer of the burden of duty of customs or excise, along with the sale of the same goods to the buyer? (2) Whether the doctrine of unjust enrichment is applicable to cases, where the goods, in respect of which duty of customs or excise had been paid, are either consumed or used in the manufacture of other products? (3) On whom rests the burden to prove that the incidence of duty has not been passed on to the buyer or borne by the assessee himself and what are the consequences to flow from such failure therefor? (4) Whether in pari materia provisions adumbrated under Section 11B of CESA and Section 27 of the Act and other provisions as amended and inserted with effect from 20-9-1991 are applicable retrospectively to refund claims already filed, but pending in appeal etc., proceedings? (5) Whether the bar of limitation for a claim of refund of duty of customs or excise paid, as had been provided for in the analogous p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent, after varification, cancels the bond. (b) Under Notification No. 35/81-CE, dated 1-3-1981, an exemption is granted to waste or scrap of copper, zinc, aluminium and lead, if used in the manufacture of chemicals. Exemption is granted from the whole of the duty of excise leviable inter alia on copper scrap provided that : (i) it is proved to the satisfaction of an officer not below the rank of Assistant Collector of Central Excise that the said waste or scrap is intended to be used in the manufacture of chemicals; and (iii) in respect of such use elsewhere than in the factory of production of the aforesaid waste or scrap, the procedure as set out in Chapter X of the Central Excise Rules, 1944 is followed. (c) The dispute related to the recovery of countervailing duty, that is to say, Additional Customs duty in respect of copper scrap so imported by the petitioners. (d) In order to avail of the aforesaid exemption notification for the purpose of co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....goods after clearing the goods on payment of duty, sells these goods to others. In the process either he directly passes on the incidence of duty to his buyer or does not. Only in the latter case will the importer get the refund. Otherwise, the refund will go to the buyer or to the Consumer Welfare Fund as per the sections. (2) If the duty is passed on to the buyer, the right to recover the duty is also passed on to the buyer of the imported goods. Provided that the buyer has not in turn sold these goods and passed on the duty to the next buyer. (3) The converse situation contemplated is where the importer uses the goods himself. Here there is no question of passing on the incidence of duty to anyone-else since the goods imported are not sold to anyone-else. Hence he can get the refund. Therefore the question of unjust enrichment arises under the amended scheme when refund is asked for by a person who has sold the imported goods and in the process directly passed on the burden of duty to the buyer. Clauses (a), (b) and (c) of the proviso to Section 27(2) and the presumption laid down under Section 28D make this very clear. In the present case the imported copper scrap has not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d passed on the same to the buyers, would be in the nature of a windfall given to such manufacturer or importer. xxxxxx xxxxxx The Bill aims at giving effect3. to the aforesaid recomendation of the Committee and proposes the following main amendments in the said Acts, namely :- (a) the manufacturer or importer of goods shall not be entitled to refund of the duty of excise or, as the case may be, the duty of customs if he has already passed on the incidence of such duty to the buyer; (b) the burden of proof that the incidence of the duty has not been passed on to the buyer shall be on the person claiming the refund; (c) every person, who is liable to pay duty of excise or, as the case may be, the duty of customs on any goods, shall be under an obligation to prominently indicate, at the time of clearance of the goods, in all the documents, relating to assessment, etc., the amount of duty which will form part of the price at which such goods will be sold; (d) the refund of any of the said duti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....annot be given because there was possibility of unjust enrichment of the claimants. Negativing this contention, the Supreme Court observed that the octroi in the case before it was a duty on the entry of the raw materials, for coming in. "It is the duty on the coming in of the raw materials which is payable by the producer or the manufacturer. It is not the duty on going out of the finished products in respect of which the duty might have been charged or added to the costs passed on to the consumers. In such a situation, no question of 'undue enrichment' can possibly arise in this case." In the present case the25. additional duty of customs is levied on raw material which is being imported. It is not an additional duty on any finished product which is going to be sold to the consumer and to whom the incidence of the additional duty of customs can be passed on directly. Since the additional duty of customs has not been directly passed on by the petitioners to any third party by selling the imported goods, they are entitled to claim refund of this amount under proviso (a) to Section 27(2) of the amended Section 27. It was also submitted before us26. that in any case since th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xcise by his order dated 9-10-1973 rejected all the five applications. (b) The respondent preferred appeals before the Collector of Central Excise (Appeals). The Appellate Collector by an order dated 30-12-1975, allowed the appeals arising out of the three refund applications relating to the period 20-2-1972 to 28-2-1973, and set aside the orders passed by the Assistant Collector and ordered consequential relief in favour of the respondent by directing the refund of the excess excise duty paid. The appeals pertaining to the refund applications for Rs. 23,68,686.85 and Rs. 26,21,356.16 for the period 1-9-1970 to 28-5-1971 and 1-6-1971 to 19-2-1972 respectively were, however, rejected by the Collector (Appeals) on the ground that the same were barred by time. (c) The respondents did not take the matter further under the statute but instead filed W.P. No. 971 of 1976 seeking quashing of the order of the Collector of Central Excise (Appeals) dated 30-12-1975 and also sought a direction by way of Mandamus for refund of the sum of Rs. 49,90,043.01 with interest at 12 per cent per annum thereon....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... within a period of six weeks of the respondent furnishing bank guarantee to the Collector of Central Excise, Meerut for the said amount and that in case, the respondent fails in this appeal, it shall refund the amount with interest at 12 per cent per annum to the appellants. (f) On 15-4-1993, when the case came up for hearing before the apex Court, learned Counsel for the appellants, it seems, raised the plea based on Section 11B, as amended by the Amendment Act 40 of 1991, to deny refund to the respondent. After hearing learned Counsel for the parties, the apex Court directed the respondent "to furnish documentary or other evidence as the respondent may deem appropriate to establish that the amount of duty of excise in relation to which the refund is claimed was collected from or paid by him and the incidence of such duty had not been passed on by him to any other person." The appeal was directed to be posted for hearing on 10-5-1993. (g) The respondents did not file any documentary or other evidence nor even an affidavit stating that the incidence of duty of excise in relation t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tanding the order given by the High Court in the Writ Petition, no refund can be made to the respondent except in accordance with the provisions of Section 11B(2) of the Act. The direction to pay the amount to the respondent to the extent ordered by the Delhi High Court contained in the interim order of this Court dated 8-10-1982 was a conditional one and subject to the respondent (i) furnishing bank guarantee to the Collector of Central Excise, Meerut for the amount in question; and (ii) that in case the respondent fails in this appeal, it shall be liable to pay interest at 12 per cent per annum while refunding the amount to the appellant. Thus, the amount in question was directed to be paid to the respondent by this Court only as an interim arrangement, during the pendency of the appeal and could not be construed to be an order of 'execution' of the order and directions of the High Court. The conditional order made on 8-10-1982 did not finally conclude the "refund claim" of the respondent and cannot take the case of the appellant out of the purview of Section 11B(3) of the Act read with the first proviso to Section 11B(1), as amended. The argument on behalf of the respondent to t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 11B. The Union of India filed an application stating that whether it was the High Court's order of 19-2-1986 or 19-9-1991, it was the duty of the Assistant Collector to satisfy himself that no part of the duty in respect of which refund was claimed was recovered by the assessee from any other person before making an order of refund. The Union of India sought two months time to consider the claim for refund in accordance with the amended provisions of Section 11B. The application was rejected by the High Court in view of the order dated 19-9-1991, which had been passed prior to the coming into force of the Amendment Act with effect from 20-9-1991. In November, 1991, the assessee filed a contempt petition alleging failure on the part of the officers of the Union of India to comply with the High Court's order granting refund to the assessee. When the petition came up for hearing on 18-3-1992, the counsel for the respondent submitted that the question regarding the applicability of the amended provisions was under consideration of the Government and be sought time. On 13-4-1992, the Assistant Collector passed an exhaustive order holding that since the assessee had passed on the in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stead of paying the assessed amount of duty to the authorities, deposit it in court and raise a plea that what is deposited in Court is not duty and the assessees are entitled to get the refund either directly from the court or if it is withdrawn by the authorities, from the authorities, notwithstanding that they have passed on the duty to others. It would create two official classes of assessees, viz., those who have paid the duty to the authorities and those who have obtained orders from the Courts for depositing the duties in courts. The former will, and the latter will not, be governed by the amended provisions of the Act. This would result in a discriminatory and invidious situation. The view canvassed by the learned counsel will also open a new door for unjust enrichment by enabling the assessees to bypass the statutory provisions which have been specifically enacted to prevent the malpractice." The16. judgment in Jain Spinner's case (supra), therefore, answers fully the submissions raised on behalf of the respondents and we reject the plea raised on behalf of the respondent that the prohibition contained in Section 11B(3) of the Act would not apply to the facts and circum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions of the law, by reason of the amended Section 11B(3) and the present case is no exception." 26.The Supreme Court also dealt with the question of applicability of the bar of limitation of a claim for refund of duty of excise paid, as provided for in Section 11B of CESA, in the exercise of civil and writ jurisdiction, in paragraphs 5 to 8 (at pages 8-9), which read as under : The appellants do not dispute that for the purpose of determining assessable value, it is the price at which the manufacturers sell the products to the wholesale dealers and not the price at which the wholesale dealer make further sale to the secondary wholesalers which is to be taken into account. The High Court found on the basis of the material on the record, that the appellants had received from the respondent the duty of excise in excess of what was admissible in law, because of a wrong interpretation placed by the respondent on the provisions of Section 4 of the Act. The respondent realised the mistake after this Court in Voltas case (supra) laid down the correct basis for assessment in such cases. It has been settled by this Court that where excess duty was not payable by the party under the pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Anr. v. Union of India & Ors. [1984 (16) E.L.T. 171 (S.C.)], this Court, while examining the question as to what is the point of time from which the limitation should be deemed to commence observed that relief in respect of payments made beyond the period of three years may not be granted from the date of filing of the petition, taking into consideration the date when the mistake came to be known to the party concerned. Just as an assessee cannot be permitted to evade payment of rightful tax, the authority which recovers tax without any authority of law cannot be permitted to retain the amount, namely because the tax payer was not aware at that time that the recovery being made was without any authority of law. In such cases, there is an obligation on the part of the authority to refund the excess tax recovered to the party, subject of course to the statutory provisions dealing with the refund. We8. are, therefore, of the opinion that the High Court, while disposing of the writ petition under Article 226 of the Constitution of India, was perfectly justified in holding that the bar of limitation which had been put against the respondent by the Collector, Central Excise (Appeals....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... It may be clarified that the differential duty," in the present case, relates to the differential between the duty calculated on the basis of (i) the price at which the respondent Company sold the goods to WDs (1st sale) and (ii) the higher price at which the wholesale dealers resold the goods to Secondary (Emphasis ours)Wholesale Dealers (2nd sale)." This averment is not at all satisfactory. It does not go to show that the respondent did not pass on the burden of the excess excise duty to any other person. The expression "was not passed on to the customer, as explained in the illustration" is vague and non-specific. It is not stated as to at what rate the duty was collected by the respondent in the present case. The 'illustrations' given in the affidavit cannot carry the matter any further; nor can the same be any substitute for a clear and categoric statement of fact that the excess duty was paid by the assessee or collected from it and that its incidence was not passed on by the assessee to any other person. There is no averment, much less a clear and specific one, even to show that the respondent did not collect excise duty at the higher rate (even according to the illustr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that TELCO (appellants in the appeal) had not, unlike the present case, recovered the amount paid by them by way of octroi duty from any third person. The Court noticed :- "The learned counsel for the respondent then contended that the appellants have recovered the amounts paid by them by way of octroi duty from the dealers or the customers to whom they had sold the goods and therefore they are in any case not entitled to get a refund. The argument was that if refund is ordered it would amount to allowing the appellants to unjustly enrich themselves at the cost of the public to whom the burden had already been passed. This argument is based on the ground that in the selling price the Company had merged the octroi duty originally paid as deposit and if a refund is made the company would be getting an additional amount over and above normal price which they would have charged but for the fact that they were initially asked to deposit octroi. There is no evidence that any of the articles sold by the Company is subject to any price control by the government or that the Company had charged any person octroi separately in the bills. Invoices, and the other documents of sale to the ou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... stand, as taken by the Company in the supplemental affidavit had not at all been controverted by the appellants in any manner whatever. Further, certain factors of signal importance got revealed by the inspection report filed by one Vivek C. Khole, Appraiser, Office of the Commissioner of Customs, Customs House, Madras-600 001 at the appellate stage. The details of the said report, penned above on verbatim, throw flood of light as to the user of silica crucibles for the manufacture of synthetic gems. In fact, silica crucibles are not consumed in the manufacture of synthetic gems. To put it otherwise, the duty of customs paid on such imported crucibles does not become a part of the manufacture of the new item, viz., synthetic gem, in which the imported item, that is to say, silica crucibles, is an ingredient. What is further getting revealed is that in the process of manufacture of synthetic gem, the dried double sulphate is taken in quartz cups or silica crucibles, which are kept in muffle furnace at around 1200ºC, since such crucibles have the ability to withstand high temperature and high resistance to thermal shock. In that process, nine cups are used for one batch - thr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the manufacture of the new item - Copper Oxychloride in which the imported component - copper scrap is an ingredient. 33.In the case on hand (viz.,Company - Indo-Swiss Synthetic Gem Manufacturing Company Ltd.), the position is not so, as stated above. When customs duty paid becomes a part of the cost of the manufacture of the new item, it goes without saying that customs duty paid is indirectly passed on to the customer or buyer, inasmuch as the customs duty paid on the raw material or imported goods is included in the price of the finished product. No manufacturer will be charitable enough to exclude customs duty paid on the raw material, in the price of the finished product. Further, the Bombay High Court is of the view that the importer or the person, who paid the duty of customs or excise is entitled to refund of the duty so paid, if he had not directly passed on the incidence of such duty to any other person. We are, however, not persuaded to share such an opinion. The reason is rather obvious. What is contemplated in Section 27(2)(a) of the Act is relatable to passing on the incidence of duty to any other person for the determination of the question of refund claims. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....item or items, namely, dipped solution and dipped fabrics. Such duty of Central Excise paid is thus passed on indirectly to the customers or buyers by the sale of finished product - dipped fabrics. We have already expressed our view by stating that we are not persuaded to share the opinion expressed by the Bombay High Court, in the case of Solar Pesticides Pvt. Ltd., (supra), while considering the question of refund of customs duty paid on silica crucibles captively used for the manufacture of synthetic gems in the case of the company (Indo-Swiss Synthetic Gem Manufacturing Company Limited). We have, however, held that the company is entitled to the refund of claim, not on the rationale of Solar Pesticides Pvt. Ltd. (supra), but on a different footing that silica crucibles were captively used for the manufacture of the synthetic gems as refractory goods and consequently, the question of passing on the incidence of customs duty paid did not at all arise for consideration. Whereas in the case of RF solution as the same was consumed in the manufacture of dipped solution, which in turn was used in the manufacture of dipped fabrics, we are of the view that the duty of Central Excise pai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....company did not at all effect the payment of duty of customs during the relevant period 'under protest' as had been done by SRF Limited - petitioner. Admittedly, the customs duty paid under mistake of law came to light only on 5-1-1983, the date of order of CEGAT. It is also not in dispute that all the Writ Petitions, namely Writ Petition Nos. 2914, 2915, 2916, 2947 and 2948 of 1984 were filed on 10-3-1984, within a period of about fifteen months from the date of clearance of the goods, as evidenced by the bills of entries filed, about which, we have referred to earlier. 40.In such circumstances, we are not persuaded to hold that there was any laches on the part of the company in knocking at the doors of the writ jurisdiction of this Court under Article 226 of the Constitution of India, when especially, the duty of customs was not payable by the Company under the provisions of the Act, but had, in fact, been paid under a mistake of law and the company has a right to recover it and there is a corresponding obligation on the part of the Department to refund the excess duty so collected, because the collection in such cases is without the authority of law. 41.The further questio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ance with the sanguine provisions, adumbrated under Sections 28C and 28D of the Act, as amended by the Amendment Act. It is at this juncture, necessary for us to recapitulate, that we have already recorded a finding that the company had captively used silica crucibles for the manufacture of synthetic gems and therefore, the question of passing on the incidence of duty of customs does not at all arise. On the face of such a finding, it follows - as night follows day - that the company is entitled to the refund of the customs duty paid, during the period in question, as referred to earlier. 43.The last, but not the least, question requiring anxious consideration is relatable to non-exhaustion of the alternative remedy, before ever the doors of this Court are knocked at in its writ jurisdiction and the consequences to flow therefrom. This sort of a question took a different hue and colour in the case of the Company. The Department did not at all in fact raise such a question directly by stating that the non-availing of the alternative remedy would result in non-suiting the Company. But, what is contended is that unless there is adjudication, as contemplated under Section 27 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n; but paid the duty of excise 'under protest'. This controversy was finally settled by the respondent, on remand, by the Appellate Tribunal by its order No. 65/90 dated 25-9-1990, wherein the respondent held that RF solution manufactured and consumed by the petitioner is not 'goods' and no duty, therefore, could be leviable on the same. 46.No doubt, the mistake of law came to light only on 25-9-1990, the date of order of the respondent, holding that RF solution is not 'goods' and consequently, no duty is leviable on the same. It is not as if the petitioner paid the duty of excise for the relevant period without any protest and the plain fact is that the duty had been paid 'under protest' and such being the case, the bogey of the statutory period of limitation of six months for making an application claiming refund of duty of excise paid under mistake of law cannot at all be put against the petitioner, by the Assistant Collector of Excise for refusing the claim of refund, if an application is made therefor. Of course true it is, such a fact that the petitioner did not perform. But the sorbid fact is that the petitioner, without availing of such alternative remedy, chose to strai....