TaxTMI 
TaxTMI 
2005 (3) TMI 116
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....to as 'the Act'). The appellant-Mandal vide its letter dated 14th August, 1978 addressed to the Range Forest Officer, Billimora, claimed rebate of Rs. 6,92,779.59 ps. The refund was claimed on the basis of Notification No. 257/76, dated September 30, 1976. The Notification was issued by the Government in exercise of the powers under sub-rule (1) of Rule 8 of Central Excise Rules, 1944 (hereinafter referred to as 'the Rules'). It inter alia provided for exemption from payment of excise duty leviable thereon in excess of average production of sugar of the corresponding period of preceding three years. The notification also provided that such exemption would be on sale of sugar as specified in Columns 3 and 4 as levy sugar and free sale sugar. 3.According to the appellant-Mandal, the production of sugar by the Mandal during the preceding three years was as under : 1973-74 1,68,636- quintals 1974-75 1,65,308- quintals 1975-76 1,30,595- quintals 4.Thus, total production of thre....
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.... claimant had already charged and collected the duty amount from its customers and as such it was not entitled to claim the said amount. He, therefore, transferred the amount to Consumer Welfare Fund, set up by the Government of India. 8.Being aggrieved by the order passed by the Assistant Collector, the appellant preferred an appeal before the Collector of Central Excise (Appeals), Ahmedabad. Before the Appellant authority, it was contended that the Assistant Collector had committed an error of law in holding the claim to be barred by time; there was an error on the part of the adjudicating authority in reducing the claim of Rs. 1,348.80 ps. on the ground that the sugar was re-processed goods and no rebate could be allowed; the working out of ratio of 65 : 35 of levy sugar and free sale sugar had not been correctly applied and the Assistant Collector ought not to have reduced the claim. He also erred in not paying the amount to the Mandal. As the order passed by the Assistant Collector was contrary to law, it was liable to be set aside by ordering the respondent to pay the amount claimed by the appellant-Mandal. 9.The Appellate Authority considered the submission regarding t....
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.... as by the Collector. According to the CEGAT, the claim was "clearly barred by limitation". The CEGAT also observed that even if the claim was not barred by limitation, it would come within the judgment of this Court in Mafatlal Industries Ltd. and Ors. v. Union of India and Others; 1997 (89) E.L.T. 247 : (1977) 5 SCC 536. The appeal was accordingly dismissed. 12.In Civil Appeal No. 6833 of 1999, the appellant had claimed rebate of Rs. 6,44,841/- vide its letter dated 1st September, 1978 lodged with Range Forest Officer, Billimora. The rebate was claimed on the basis of Notification No. 108/78, dated 28th April, 1978. Under the said Notification, a sugar factory was entitled to exemption from excise duty on excess production of sugar of the corresponding period of preceding three years. The notification also provided that such exemption would be on sale of sugar as specified in Columns (3) and (4) as levy sugar and free sale sugar. According to the Mandal, the production of sugar by the appellant-Mandal for preceding three years was as under : 1975 15,573- quintals 1976 Nil- 1977 24,817- quintals Total ....
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....n challenged by the Mandal in the present appeals. 18.We have heard learned Counsel for the parties. The learned Counsel for the appellant-Mandal contended that the Authorities below committed an error of law in holding the claim of the appellant as time barred. He also contended that the Authorities were wrong in reducing the claim of the appellant in Civil Appeal No. 6833 of 1999 by improperly interpreting Notification No. 108/78, dated 28th April, 1978 and in calculating the average production as per the said Notification. According to the learned Counsel, production of sugar by the appellant in three years was required to be divided in three years ignoring the fact that there was no production for one year. The appellant in that case would be entitled to benefit of excess production of 32,378.33 quintals and not 25,650 quintals. The Counsel vehemently contended that the decision of the Authorities on application of the doctrine of unjust enrichment was unwarranted and ill-founded and the ratio laid down in the Mafatlal Industries Ltd. would not apply. According to the Counsel, sub-section (2) of Section 11B could not be invoked by the Authorities and the appellant was entitl....
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....y to Consumer Welfare Fund, it was submitted that admittedly the appellant has not suffered. The octroi amount has been passed on to customers and has already been recovered by the appellant. Hence, under sub-section (2) of Section 11B of the Act, the Mandal cannot claim such amount. But even if it is assumed that Section 11B has no application, on general principle also, the appellant has no right to claim such amount as it would result in 'unjust enrichment' by the appellant. Hence, by not extending the said benefit, the Authorities have committed no error of law. He, therefore, submitted that the appeals deserve to be dismissed. 20.Having heard learned Counsel for the parties, in our opinion, the appellant is not entitled to any relief. On limitation, it is clear from the record that in Civil Appeal No. 6832 of 1999, the claim was in respect of the production for the year 1976-77. It related to a claim up to 30th September, 1977 and the appellant ought to have filed the claim within six months i.e. on or before 31st March, 1978. Admittedly, the claim was submitted on August 14, 1978. It was, hence, rightly held to be barred by limitation. 21.Regarding average production of....
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.... sugar. Reduction of amount on that ground was illegal and unlawful. 24.We are unable to uphold the argument. In our opinion, both the notifications are abundantly clear. The benefit under the said notifications can be claimed only if sugar is sold in the proportion of 65 : 35 levy sugar and free sale sugar respectively. Since the appellant was claiming the benefit of exemption from excise duty, it was obligatory on the appellant-Mandal to sell sugar in the ratio of 65 : 35 as specified in the notifications and unless that condition is fulfilled, the benefit of exemption from duty could not be claimed by it. On the basis of actual sale by the appellant, the respondent had calculated the amount of exemption from excise duty which was in consonance with the notifications and no grievance can be made by the appellant against that decision. 25.It was also argued that the authorities below could not have invoked the provisions of Section 11B of the Act for denial of the benefit of notifications. Section 11B was inserted in the Act by the Amendment Act of 1978 (Act 25 of 1978) with effect from November 17, 1980. It provided for refund of duties in certain cases of excess payment. T....
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....Fund set up by the Government. 30.We are not impressed by that argument also. In our view, the submission is not well founded and cannot be accepted. 31.Stated simply, 'Unjust enrichment' means retention of a benefit by a person that is unjust or inequitable. 'Unjust enrichment' occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else. 32.The doctrine of 'unjust enrichment', therefore, is that no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of 'unjust enrichment' arises where retention of a benefit is considered contrary to justice or against equity. 33.The juristic basis of the obligation is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or the doctrine of restitution. 34.In the leading case of Fibrosa v. Fairbairn, (1942) 2 All ER 122, Lord Wright stated the principle thus : "...(A)ny civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from anot....
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.... Produce Markets Act, 1961 enabled the market committees to retain the fee levied and collected by them from licensees in excess of the leviable amount if the burden of such fee was passed on by the licensees to purchasers. The validity of the said provision was challenged and refund was claimed. The Court, however, relying on Orient Paper Mills held that consumer public who had borne the ultimate burden were the persons really entitled to refund and since the market committees represented their interests, they were entitled to retain the amount and the licensees who had levied and collected the amount from consumers could not claim the benefit. 41.The Court said; "The primary purpose of Section 23A is seen on the face of it; it prevents the refund of license fee by the market committee to dealers, who have already passed on the burden of such fee to the next purchaser of the agricultural produce and who want to unjustly enrich themselves by obtaining the refund from the market committee, Section 23A, in truth, recognizes the consumer-public who have borne the ultimate burden as the persons who have really paid the amount and so entitled to refund of any excess fee collected ....
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.... decision of the Constitution Bench in Godfrey Phillips India Ltd. & Another v. State of U.P. & Ors., Writ Petition (c) No. 567 of 1994, dated January 20, 2005. In that case, constitutional validity of Uttar Pradesh Tax on Luxuries Act, 1995 as also other State Acts was challenged inter alia on the ground of legislative competence of the State Legislatures. The Court allowed the petition and held that the State Legislatures were not competent to impose luxury tax on tobacco and tobacco products and the Acts were declared ultra vires and unconstitutional. In the intervening period, however, tax was collected by the appellants from consumers and also paid to the State Governments. In certain cases, interim relief was obtained by the appellants from this Court against recovery of tax and as alleged by the State Governments, the appellants continued to charge tax from consumers/customers. 47.In the circumstances, speaking through Constitution Bench, one of us, (Ruma Pal, J.) stated; "(F)ollowing the principles in Somalya Organics (India) Ltd. v. State of U.P. (2001) 5 SCC 519 while striking down the impugned Acts we do not think it appropriate to allow any refund of taxes already....