JUDGMENT R.K. Agrawal, J.
1. By means of the present writ petition, filed under Article 226 of the Constitution of India, the petitioner M/s. Gurcharan Industrial Works, seeks a writ, order or direction in the nature of certiorari quashing the orders dated 27.1.1999 and order dated 19.11.1999, said to have been despatched vide registered letter No. 5803 22.11.1999, contained in Annexures No. 7 and 9 to the writ petition.
2. The petitioner has also sought a writ order or direction in the nature of mandamus commanding the respondents to refund the amount of Rs. 4,74,330 alongwith interest at the rate of 18% per annum from December 1987 till the date of payment.
3. Briefly stated the facts giving rise to the present writ petition are that the petitioner claims to be a manufacturer of Rice Mill Plant and its part which fall under the tariff item No. 68 as it was existing during the relevant time under the provisions of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). It has been registered as a small scale industry and was initially exempted from the payment of excise duty on its clearances. However, the petitioner paid excise duty under mistake and on discovery of the mistake, it filed an application for refund under Section 11B of the Act as it then stood. The refund application was rejected by the Assistant Collector, Central Excise. The appeal filed by the petitioner was also dismissed by the Collector (Appeals) Central Excise. Thereafter, the petitioner approached this Court by filing Civil Misc. Writ Petition No. 358(Tax) of 1987 wherein it had challenged both the orders passed by the Assistant Collector as well as Collector (Appeals). This Court vide judgment and order dated 9.12.1987 allowed the writ petition. The operative portion of the said judgment is reproduced below:
"In the result, this petition succeeds and is allowed. A direction is issued to the opposite parties to refund the duty collected during 1983-84 and 1984-85 on clearance for home consumption after deducting the amount already paid".
4. It may be mentioned here that this Court had considered the question of unjust enrichment and had negatived the plea. However, the Court did not grant the claim of Interest on refund Illegally disallowed by the authorities. The Central Government filed Special Leave Petition No. 7561 of 1988 against the judgment and order dated 9.12.1987 passed by this court In the aforementioned Writ Petition before the Hon. Supreme Court. The Hon. Supreme Court vide order dated 8.5.1995 dismissed the Special Leave Petition as there was no satisfactory explanation of delay of 115 days. Thereafter the petitioner made an application on 24.2.1997 for refund of the sum of Rs. 4,74,330. The Assistant Collector, Central Excise, respondent No. 2 issued notice on 10.12.1997 calling upon the petitioner to show cause as to why the amount of refund should not be credited to the Consumer Welfare Fund under Section 11B of the Act. The petitioner submitted its reply. The Assistant Commissioner, vide order dated 17.1.1999, rejected the claim of the petitioner on the ground that a sum of Rs. 1,74,330 pertaining to the period 10.10.1984 to 4.3.1985 was time barred as the same was not under dispute in legal proceedings. As regards the refund of claim of Rs. 3 lacs, since the petitioner had failed to furnish any satisfactory evidence that they had not passed on the incidence of duty to other person, the same was liable to be credited to the Consumer Welfare Fund. The petitioner challenged the aforesaid order in appeal before the Commissioner (Appeals) who vide order dated 9.11.1999 had rejected the appeal. Both these orders are under challenge in the present writ petition.
5. We have heard Shri S.D. Dube, learned counsel for the petitioner and Shri S.P Kesherwani learned Standing Counsel for the respondents.
6. Since, counter affidavit and rejoinder affidavit have been exchanged Inter-se parties, with the consent of the learned counsel for the parties, the writ petition is finally decided at the admission stage itself in accordance with the Rules of the Court.
7. The learned counsel for the petitioner submitted that the Central Excise and Customs Laws (Amendment) Act, 1991 (Act No. 40) of 1991 came into force w.e.f. 20.9.1991, whereby Section 11B of the Act was substituted by a new Section, whereas in the present case, the refund had been allowed by this Court vide judgment and order dated 9.12.1987 passed In Civil Misc. Writ Petition No. 358(Tax) of 1987 and when the Govt. of India filed Special Leave Petition No. 7561 of 1988, before the Hon. Supreme Court which was barred by 115 days in the year 1988 itself, the result was that the judgment and order dated 9.12.1987 became final before coming into force of the Act No. 40 of 1991. Thus, the respondent Nos. 2 and 3 have wrongly rejected the claim of refund of applying the provisions of Section 11B of the Act. He relied upon the decision of Constitution Bench of Hon. Supreme Court in the case of Mafatlat Industries Limited and others v. Union of India and others, 2002 (83) ECC 85 (SC): 1997 (5) SCC 536, where it has been held that where the refund proceedings have finally terminated in the sense that the appeal period has also expired before the commencement of 1991 (Amendment) that cannot be reopened and/or governed by Section 11B(3) (as amended by the 1991 Amendment Act), reserving the powers of the Appellate Authority to condone the delay In proper cases. Thus, he submitted that the petitioner Is entitled for refund and two orders passed by the respondent, are liable to be set aside. He further submitted that the petitioner Is also entitled for interest from the date of decision of this Court i.e. from 9.12.1987 till the date of its actual payment as the respondents have illegally retained the amount despite the direction given by this Court. According to him, it is not open to the respondents to raise the question of unjust enrichment for defeating the claim of refund as in the earlier proceedings, this plea was specifically repelled by this Court.
8. Shri S.P. Kesherwani learned standing counsel, however, submitted that out of claim of Rs. 4,74,330 made by the petitioner a sum of Rs. 1,74,330 was not subject matter of consideration before this Court in Civil Misc. Writ Petition No. 358 of 1987 and only a sum of Rs. 3 lacs was subject matter of claim. Thus, the Authorities have rightly rejected the claim in respect of Rs. 1,74,330 as having become barred by time. So far as the claim for refund of Rs. 3 lacs is concerned, he submitted that in view of Section 11B of the Act, which was substituted by Act No. 40 of 1991, it was obligatory on the part of the petitioner to prove/establish by satisfactory evidence that it had not passed on burden of duty to the consumer/purchaser and, in the absence of satisfactory evidence being filed and proved, the said amount has rightly been directed to be credited to the Consumer Welfare Fund. He further submitted that against the order dated 19.11.1999 passed by the Commissioner (Appeals) the petitioner has a right of filing an appeal before the Customs, Excise & Gold Control (Appellate) Tribunal, and therefore, the writ petition should not be entertained. He relied upon the decision of Hon. Supreme Court in the case of Union of India v. Ingersoll Rand (India) Limited, 2000 (120) ELT 291 (SC).
9. According to him, since the petitioner has failed to produce any material either before the Authorities or before this Court that It had not passed burden of excise duty on the consumer/purchasers, in view of specific provisions in Section 11B(2) of the Act, the amount of refund so determined shall be credited to the Fund. However, the amount instead of being credited to the Fund, is to be paid to the applicant only if the condition of clause (d) of the proviso Is satisfied. According to him, in view of Sub-section (3) of Section 11B of the Act, notwithstanding any thing contrary contained in the judgment of this Court, the refund was to be made only as provided in Sub-section (2) of Section 11B of the Act. Thus, the provisions of Section 11B(2) are to be complied with. He relied upon the decision of Hon. Supreme Court in the case of Union of India v. Raj Industries Limited, 2000 (120) ELT 50 (SC) and also the decision in the case of Mafatlal Industries Limited (supra). He also relied upon the decision of Hon. Supreme Court in the case of Union of India v. Jain Spinners Limited, 1993 (41) ECC 24 (SC) ; 1992 (61) ELT 321 and Porcelain Electrical Manufacturing Co. Ltd. v. Collector of Central Excise, New Delhi 1998(98) ELT 583.
10. In reply, Shri Dube submitted that the alternative remedy is not an absolute bar where a pure question of law is involved. He relied upon the decision of Hon. Supreme Court in the case of Dr. Bal Krishna Agarwal v. State of Uttar Pradesh and Ors. JT 1995 (1) SC 471 wherein, the Hon. Supreme Court has held that "since the question that is raised involves a pure question of law and even if the matter is referred to the Chancellor under Section 68 of the Act, It is bound to be agitated in the Court by the partly aggrieved by the order of the Chancellor, we are of the view that this was not a case where the High Court should have non-suited the appellant on the ground of availability of an alternative remedy."
11. Having heard the learned counsel for the parties, we find that this Court vide judgment and order dated 19.12.1987 had directed the opposite parties to refund the duty collected during the year 1983-84, 1984-85 on clearance for home consumption after deducting the amount already paid. The Special Leave Petition filed by the Government of India had been dismissed on the ground that the delay had not been explained. What is the effect of Section 11B as substituted by the Act No. 40 of 1991 on 10.9.1991 is only a pure question of law. Even if the petitioner is relegated to the remedy of appeal before the Tribunal, the matter would still be agitated by the aggrieved party before this Court. Thus, in view of the law laid down by the Hon. Supreme Court in the case of Dr. Krishna Agarwal (supra), it will not be proper for us to direct the petitioner to avail alternative remedy of filing an appeal.
12. For resolving the issue raised in the present petition, it is necessary to quote the provisions of Section 11B of the Act which are as follows:
"11B. Claim for refund of duty.--(1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise before the expiry of six months 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 to in Section 12A as the applicant may furnish to establish that the amount of duty of excise in relation to which such 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:
Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of Sub-section (2) substituted by the Act:
Provided further that the limitation of six months shall not apply where any duty has been paid under protest.
(2) If, on receipt of any such application, the Assistant Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant is refundable, he may made an order accordingly and the amount so determined shall be credited to the Fund:
Provided that the amount of duty of excise as determined by the Assistant Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the fund, be paid to the applicant, If such amount is relatable to--
(a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(b) unspent advance deposits lying In balance in the applicant's account current maintained with the Commissioner of Central Excise;
(c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act;
(d) the duty of excise paid by the manufacturer, If he had not passed on the incidence of such duty to any other person;
(e) the duty of excise borne by the buyer, if he had not passed on the Incidence of such duty to any other person;
(f) the duty of excise borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify: Provided further that no notification under Clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty has not been passed on by the persons concerned to any other persons.
(3) Notwithstanding anything to the contrary 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 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).
Explanation .--For the purposes of this section,.....
(B) "relevant date" means--
(f) in any other case, the date of payment of duty."
From reading the aforesaid section, it is seen that any person who is claiming refund of any duty of excise has to make an application before the expiry of six months from the relevant date to the Assistant Commissioner of Central Excise in such a form and manner as may be prescribed. The limitation of six months will not apply where any duly has been paid under protest. Sub-section (2) provides that the Assistant Commissioner of Central Excise, if satisfied that whole or any part of duty of excise paid by the applicant is refundable, he may make an order accordingly and amount so determined shall be credited to the Fund. However, the proviso to Sub-section (2) empowers the Assistant Commissioner, Central Excise, instead of crediting the amount to the fund, to pay to the applicant on fulfilment of any one of the conditions mentioned in Sub-clauses (a) to (f) of the said proviso. Clause (d) provides that if the duty of excise paid by the manufacturer, had not been passed on to any other person. Sub-section (3) of Section 11B provides that notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provisions 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).
13. Thus, from a conjoint reading of the various provisions of Section 11B of the Act, it is clear that any amount of excise duty which is found refundable has to be credited by the authorities to the Fund. But if the duty of excise paid by the manufacturer had not been passed on to any other person instead of crediting the said amount to the fund, can be paid to the person concerned. These provisions are applicable notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Authority or any Court. This Court vide judgment and order dated 9.12,1987 had directed the opposite parties to refund the duty collected during the year 1983-84,1984-85. The application for refund was made by the petitioner on 8.2.1988. However, the duty was not refunded. The matter remained pending. After the Special Leave Petition was dismissed by the Hon. Supreme Court on 8.5.1995, the petitioner made an application in the proper form on 24.2.1997 claiming refund. The said application was processed under Section 11B of the Act. The petitioner did not give any evidence to show that he had not passed on the incidence of duty to any other persons as required under Clause (d) of the proviso to Sub-section (2) of Section 11B of the Act and, therefore, the claim has been rejected and the amount of refund has been credited to the Consumer Welfare Fund. The reliance placed by the learned counsel for the petitioner to paragraph 108 (XI) of the decision of Hon. Supreme Court in the case of Mafatlal Industries Limited (supra) wherein the Hon. Supreme Court has held as follows:
"(xi) Section 11B applies to all pending proceedings notwithstanding the fact that the duty may have been refunded to the petitioner/plaintiff pending the proceedings or under the orders of the Court/Tribunal/Authority or otherwise, It must be held that Union of India v. Jain Spinners and Union of India v. ITC has been correctly decided. It is, of course, obvious that where the refund proceedings have finally terminated in the sense that the appeal period has also expired-before the commencement of the 1991 (Amendment) Act (19.9.1991), they cannot be reopened and/or governed by Section 11B(3) (as amended by the 1991 (Amendment) Act]. This, however, does not mean that the power of the appellate authorities to condone delay in appropriate cases is affected in any manner by this clarification made by us."
Is misplaced, inasmuch as in the present case, the refund proceeding had not been finally terminated as no refund of the amount was actually given to the petitioner. The Hon. Supreme Court in the case of Mafat Lal Industries Limited has held that Section 11B would not apply to a case where the duty may have been refunded to the petitioner/plaintiff meaning thereby, where the refund proceeding has been finally terminated in the sense that the appeal period has also expired before commencement of the 1991 (Amendment) Act and they cannot be re-opened and or governed by Section 11B(3).
14. As we have found that even though this Court had directed for the refund of the amount of duty to the petitioner as far back in the year 1987, the petitioner had made an application in the prescribed proforma only on 24.2.1997 and, therefore, in view of provisions of Section 11B(3) of the Act, the claim of refund has to be processed in accordance with the provisions of Section 11B(2) of the Act.
15. In the case of Jain Spinners Limited (supra) the Hon. Supreme Court has found that refund was allowed by the Assistant Collector as result of the approval of the classification list as filed by the assessee provisionally. Subsequently, on receipt of a test report from the Deputy Chief Chemist, the department took the view that the refund had been erroneously granted and sought to recover it by issuance of a notice. The Assistant Collector confirmed the demand for payment of the duty amount, which had been erroneously refunded. The assessee questioned the order of the Assistant Collector through a writ petition before the High Court and also by filing an appeal before the Collector of Central Excise (Appeals). The High Court issued an interim stay in favour of the assessee against the demand confirmed by the Assistant Collector's order subject to the assessee depositing the amount of the demand in the Court. The respondent (Union of India) was permitted to withdraw the amount by an interim order of the Court on February 19, 1986 subject to the condition that it would pay interest at bank rate and refund the amount alongwith interest within two months of the decision of the writ petition if the petitioner ultimately succeeded. The appeal filed by the assessee before the appellante authority, however, succeeded and consequential, relief was ordered, "if otherwise admissible". The assessee, thereupon, filed an application before the Assistant Collector for refund of the duty plus Interest as per the conditions contained in the interim order of the High Court. The assessee also filed an application before the High Court stating that in view of the appellate order, the writ petition no longer survived and sought a direction to the respondents to pay the amount alongwith Interest. The High Court allowed the application of the assessee on September 19, 1991 and directed the Union of India to refund the amount due to the assessee. On September 20,1991, Act 40 of 1991 came into force, prohibiting the grant of refund except in accordance with the provisions of Sub-section (2) of Section 11B. The Union of India filed an application stating that whether it was the High Court's order of February 19, 1986 or September 19, 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 September 19, 1991 which had been passed prior to the coming into force of the Amendment Act with effect from September 20, 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 March 18, 1992, the counsel for the respondent submitted that the question regarding the applicability of the amended provisions was under consideration of the Government and he sought time. On April 13, 1992, the Assistant Collector passed an exhaustive order hoiding that since the assessee had passed on the incidence of duty to others, it was not entitled to receive the refund. The High Court at the time of hearing of the contempt petition, on April 20, 1992, was apprised of the order of the Assistant Collector, but it held that the decision of the Assistant Collector was not a decision of the Government and directed the Union of India to deposit the entire amount of refund with bank interest on or before April 24, 1992. It was in this background, that the Union of India filed an appeal before Apex Court against the order dated April 20, 1992 passed by the High Court to give effect to its earlier order dated February 19, 1986. The Apex Court held that the High Court's order of February 19, 1986 under which alone the refund was claimed could not be an exception to the provisions of Section 11B(3) of the Act, and that the High Court could not have made any order, after September 20, 1991 directing the payment of refund contrary to the amended provisions of Section 11B(2) of the Act. The Court expressed the view that Section 11B(3) of the Act, as amended, would apply to all cases which were pending notwithstanding any order or decree or judgment of a Court or Tribunal or the provisions of any other law for the time being in force. The Apex Court inter alia held as follows:
"The only question before us is whether the impugned order dated April 20, 1992 of the High Court which is passed to give effect to Its earlier order of February 19, 1986, is valid or not. Since, we are of the view that the order of February 19, 1986 attracts the provisions of Sub-section (3) of Section 11B of the Act which has come into force on September 20, 1991, the respondents are not entitled to take advantage of the said order unless they succeed in showing to the statutory authorities that they had not passed on the whole or any part of the duty in question to others."
16. In the case of Union of India v. Raj Industries (supra), the Hon. Supreme Court has held as follows:
"It is well settled that where a claim for refund of any duty or lax paid arises for consideration of the authorities apart from the merits of the claim and even if on merits it is found to be a justified claim, the principles of unjust enrichment has also to be kept in view before directing the refund."
17. Applying the principles laid down by the Hon. Supreme Court in the case of Mafat Lal Industries Limited and Jain Spinners Limited (supra), we are of the view that the provisions of Section 11B(2) has to be taken into consideration while granting the refund pursuant to the orders passed by this Court in the petitioner's own Writ Petition No. 358 of 1987 and it is not correct to say that the matter relating to refund had attained the finality as the Special Leave Petition was filed beyond time by 115 days which delay was not condoned by Hon. Supreme Court, as the actual refund of the amount had not been made by the authorities and the application for refund in the prescribed proforma was only made on 24.2.1997 i.e. after coming Into force of Act No. 40 of 1991 substituting new Section 11B in the Act.
18. In view of the foregoing discussions, we do not find any illegality in the impugned orders challenged by the petitioner in this writ petition. The writ petition fails and is dismissed.
19. However, the parties shall bear their own costs.