TaxTMI 
TaxTMI 
2026 (8) TMI 1796
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.... (SHEC), which had been mistakenly paid by the respondents to the appellant. This Court admitted the appeal on the following two substantial questions of law, which are as follows:- "(i) Whether the provisions of Section 11B of the Central Excise Act, 1944, which prescribes a statutory time limit for claiming refund, are applicable in cases where tax or cess was paid under a mistake of law and whether refund claims in such circumstances are time barred even when the payment was made erroneously or without legal authority? (ii) Whether the Appellate Tribunal erred in law in ignoring the statutory presumption of unjust enrichment embedded in Section 11B of the Central Excise Act, 1944, and in granting refund on the basis of a mere CA certificate but without recording a categorical finding supported by substantive evidence, whereas the respondent has failed to produce tangible and corroborative evidence that the incidence of EC and SHEC has not been passed on to any other person?" 4. The brief facts of the case is that the respondents are engaged in the exploration and production of petroleum crude, falling under CTH 2709 of the Central Excise Tariff Act, 1985.....
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....issioner (Appeals), only to the extent that it had not provided for refund of the EC and SHEC for applications made beyond the one year period of filing of the petition, made a challenge to the same, by way of Excise Appeal No. 75720 of 2015, before the Customs, Excise and Service Tax Appellate Tribunal, Kolkata (hereinafter referred to as CESTAT). Excise Appeal No. 75720 of 2015 was disposed of, vide Final Order No. 75892/2025 on 16.04.2025, by holding that the EC and SHEC, paid by the respondents under a mistake of law, the time limit prescribed in terms of Section 11B of the Act was not applicable. As such, the claim for refund made by the respondents beyond one year from the relevant date could not be dismissed as time barred. 8. The reasons given by the learned CESTAT for allowing the appeal was on the basis of various decisions of various High Courts, such as, the Karnataka High Court, Delhi High Court and Telangana High Court, wherein the common thread that ran through the decisions of the various Courts was that if a person was not liable to pay tax, the department could not retain the amount mistakenly paid and that the bar of limitation under Section 11B of the Act cou....
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....has been made by the respondents to the appellant due to a mistake. 10. In the case of Union of India vs. S.R. Dhingra, reported in (2008) 2 SCC 229, the Supreme Court has held that a mistake does not confer any right on any party and can be corrected. In the case of Basawaraj and Anr. vs. the Spl. Land Acquisition Officer, reported in (2013) 14 SCC 81, the Supreme Court has held that a wrong order/decision in favour of any particular party does not entitle any other party to claim benefits on the basis of the wrong decision. 11. The extract of Section 11B (1) & (2) of the Act provides as follows:- "Section 11B-Claim for refund of duty and interest, if any, paid on such duty.- (1) Any person claiming refund of any 1 [duty of excise and interest, if any, paid on such duty] may make an application for refund of such 2 [duty and interest, if any, paid on such duty] to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred t....
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....y of one year from the relevant date. On a simple understanding of the issue and by following the decisions of the Hon'ble Supreme Court, we are of the view that a mistake does not confer any right on any person, especially when the same can be corrected. 14. In the case of Commissioner of C.Ex.(Appeals), Bangalore vs. K.V.R. Construction, reported in 2012(26) STR 195 (Kar), the Division Bench of the Karnataka High Court had, on considering a similar matter, held that a reading of Section 11B of the Act only refers to claim for refund of duty of excise and it does not refer to any other amounts, collected without authority of law. As such, the amount sought for, as refund, which had been paid under a mistaken notion, would have to be paid back and Section 11B of the Act could not be a bar, for refunding the said amount. Thus, once duty was paid, which was not payable in law, there was no authority for the Department concerned, to retain such amount, as the said paid duty would not attract Section 11B of the Act and was outside the purview of the Act. This decision of the Karnataka High Court was put to challenge before the Hon'ble Supreme Court, vide Special Leave to Appeal (Civ....
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....ayable within the meaning of either the Central Excises and Salt Act, 1944 (Excise Act) or the Customs Act, 1962, as the case may be. In other words when the Hon'ble Supreme Court said that all claims for refund ought to be filed only in accordance with the Customs Act or Excise Act. It obviously did not include payment made under some enactment, which for some reason, had erroneously been made to the Customs authorities. Nowhere did Mafatlal Industries talk of a situation where the refund of a cess paid under the Cess Act, 1985 albeit erroneously, was required to be made under the Excise Act or the Customs Act and under no other enactment. Consequently, the observation in para 4 of the judgment of the Hon'ble Supreme Court in Anam Electrical Manufacturing Co. has also to be understood in the same manner. Para 4 of the said judgment it has been explained that the rules pertaining to refund would not apply where refund is sought of a duty levied and recovered under an unconstitutional provision. It was explained that the period of limitation in such cases would be in terms of the law laid down in Mafatlal Industries. It is obvious that when the Hon'ble Supreme Court talk....