Supreme Court of India
COMMISSIONER OF CENTRAL EXCISE, TIRUCHIRAPALLIversusM/S. DALMIA CEMENT(BHARAT) LTD.
- Citation
- 2015 INSC 627
- Decided
- 2 September 2015
- Disposal
- Dismissed
- Bench
- A K SIKRI
Holding
The proviso to Section 11B is inapplicable where the refund order was already passed before the 1991 amendment and no application was pending, so the officer cannot invoke unjust enrichment during implementation.
Summary
The appellant, Commissioner of Central Excise, sought to enforce a refund order dated 06‑06‑1989 in favour of M/s Dalmiacement (Bharat) Ltd. The refund had not been paid, leading to contempt proceedings and a High Court order directing the Assistant Commissioner to examine the claim under the amended Section 11B, which introduced the doctrine of unjust enrichment. The Supreme Court held that because the refund order was passed before the 1991 amendment and no refund application was pending at the amendment's commencement, the proviso to Section 11B does not apply. Consequently, the Assistant Commissioner cannot revisit the order on the ground of unjust enrichment; he may only implement the existing order. The appeal was dismissed.
Issues considered
- Whether the proviso to sub‑section (1) of Section 11B of the Central Excise Act, as amended in 1991, applies to a refund order that was passed before the amendment but whose implementation was pending.
- Whether the Assistant Commissioner can invoke the doctrine of unjust enrichment under the amended provision at the stage of executing a pre‑amendment refund order.
Legislation cited
- Central Excise Act, 1944s. 118, s. 11B
- Central Excise and Customs Laws (Amendment) Act, 1991
- Customs Act, 1962s. 27
- Indian Contract Act, 1872s. 72
- Limitation Act, 1963s. 17(1)(c)
Subjects
Central ExciseRefund of dutySection 11BUnjust enrichmentAmendment 1991Pending applicationTax law
Judgment
[2015] 9 S.C.R. 257
COMMISSIONER OF CENTRAL EXCISE, A
TIRUCHIRAPALLI
v.
M/S. DALMIACEMENT(BHARAT) LTD.
(Civil Appeal No. 3600 of 2006) B
SEPTEMBER 02, 2015
[A. K. SIKRI AND R. F. NARIMAN, JJ.]
Central Excise Act, 1944-s. 118 (as amended)-Claim c
for refund of duty - Applicability of s. 11 B, to cases where
though an order has been passed directing refund,
implementation of the orderis pending - Held: If the order
for refund on such an application had already been passed
before coming into force the amended provision and no D
application was pending at the commencement of the Central
Excise and Customs Laws (Amendment) Act, 1991 before
the Assistant Commissioner, the question of applying the said
proviso and going into the issue as to whether incidence of
such duty had been passed by the applicant to any other E
person or not would not arise - Thereafter, order passed on
the application is only to be implemented by giving the refund
as per that order- The Officer, at the time of carrying out the
orders for refund, which have already been passed, cannot
/.le invested with the powers to go into the question of unjust F
enrichment by invoking the proviso to sub-section (1) of
s. 11 B - Doctrine of unjust enrichment'- Central Excise and
Customs Laws (Amendment) Act, 1991.
Dismissing the appeal, the Court G
. HELD: 1.1 Proviso to sub-section (1) of Section 11 B
of the Central Excise Act, 1944, as amended, would be
applicable in a situation where an application for refund
- made before the said amendment was still pending at
257
H
258 SUPREME COURT REPORTS [2015] 9 S.C.R.
A the time when the provislons of s. 118 were amended.
Once it is found that no such application was pending
and the orders on the said application had already been
passed, the proviso ceases to have any application.
Section 118 relates to claim for refund of duty and the
B procedure for such a refund is stipulated in this Section.
As per sub-section (1) thereof, any person claiming
refund of any duty of excise has to move an application
for refund of such duty to the Assistant Commissioner
of Central Excise. Once such an application is made, the
C same is to be considered in accordance with this
provision. Under the unamended provision, the Assistant
Commissioner was not required to go into the question
as to whether incidence of such duty had been passed
D on by the applicant claiming refund to any other person
or not. However, if the application was not decided till
the time amendment was incorporated in the year 1991,
as per the proviso, while dealing with such an application
for refund, the Assistant Commissioner is still
E empowered to go into this question even when the
application was filed before the commencement of the
amended provision. This situation would prevail only
when there is a pending application before the Assistant
Commissioner of Central Excise, which is yet to be
F decided. If the order for refund on such an application
had already been passed before coming into force the
amended provision and no application was pending at
the commencement of the Central Excise and Customs
Laws (Amendment) Act, 1991 before the Assistant
G Commissioner and, therefore, question of applying the
said proviso and going into the issue as to whether
incidence of such duty had been passed by the applicant ..
to any other person or not would not arise. Thereafter,
order passed on the application is only to be
H implemented by giving the refund as per that order. By
-
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 259
DALMIA CEMENT (BHARAT) LTD.
no stretch of imagination, the Officer, at the time of A
carrying out the orders for refund, which have already
been passed, can be invested with the powers to go into
the question of unjust enrichment by invoking the
proviso to sub-section (1) of Section 11 B. It clearly
follows that before the amendment of Section 11 B of the B
Act, principle of unjust enrichment was no~ incorporated
under the unamended provision. In fact that was
precisely the reason for amending the provision so that
this doctrine of "unjust enrichment" is incorporated, viz.,
to take care of the mischief that was prevailing under C
the unamended provision which was removed by making
amendment, popularly known as Haydon's Mischief
Rule. [Paras 14, 15, 16] [286-C-H; 287-A-F]
1.2 In the instant case, the order on the refund D
application of the respondent had been passed on
06.06.1989, which was much before the amended
provision came into operation. In fact, even after the order
of refund was passed, the appellant had not refunded
the amount and it is in these circumstances that writ E
petition was filed in the High Court tor initiation of
contempt proceedings against the defaulting officers. In
such proceedings, the High Court had passed the order
dated 18.07.1995. In this order, no doubt, the Court F
observed that the Assistant Commissioner would go into
the question if the respondent should be granted the
refund in spite of Section 11 B of the Act. However, merely
because of such observations, it cannot be said that the
Assistant Commissioner was entitled to look into the G
issue of unjust enrichment when if, otherwise, he had
- no jurisdiction .to do so in the facts of the instant case.
Such observations were given in view of the statement
of the counsel for the Government who brought to the
notice of the Court the amended provisions contained H
260 SUPREME COURT REPORTS [2015] 9 S.C.R.
A in sub-section (3) of Section 118 of the Act. The High
Court did not go into the issue as to whether such a
course of action was permissible or not. Further, the
interpretation that is to be accorded to the amended
provision had not been decided by this Court till. that time
B and the law on this issue came to be settled ir) the year
1997 only when the judgment in Mafatlal lndustf;es Ltd.
was pronounced by this Court. Thus, when the Order of
the Assistant Commissioner was challenged and the
matter came before the tribunal, the tribunal was duty
C bound to apply the law laid down in Mafatla/ Industries
Ltd., which it did. Similar exercise is done by the High
Court in the impugned judgment. Thus, the view taken
by the High Court is in consonance with the law laid
D down by this Court in Mafat/a/'s case. There is no scope
to interfere with the decision of the High Court. [Paras
16, 17, 18) (287-F-G; 288-A-F]
Mafatlal Industries Ltd. and Ors. v. Union of India and
Others 1996 (10) Suppl. SCR 585: (1997) 5 SCC 536
E -followed.
Case Law Reference
1996 (10) Suppl. SCR 585 followed. Para 17
F CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3600 of2006
From the Judgment and Order dated 08.12.2005 of the
High Court of Delhi at Delhi in CEAR No. 3/2001.
G
Guru Krishna Kumar, Rupesh Kumar, Awadhesh Kumar
Singh, Ritesh Kumar, Jitin Singhal, B. Krishna Prasad for the •
Appellant.
H K. V. Viswanathan, Ramesh Singh, Sabyasachi Patra,
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 261
DALMIACEMENT(BHARAT) LTD.
Abhishek Kaushik, Sanjeev K. Kapoor, Ashwini Chawla, A
Khaitan & Co. for the Respondent.
The Judgment of the Court was delivered by
A. K. SIKRI, J. 1) On an application under Section 35G(3)
8
of the Central Excise Act, 1944 (hereinafter referred to as the
'Act'), the Customs Excise and Gold (Control) Appellate
Tribunal (hereinafter referred to as the 'CEGAT') referred the
following question to the High Court of Delhi for its opinion :-
"Whether Section 11 B of the Central Excise Act, as c
amended, applies to cases where though an order has
been passed directing refund, implementation of the
order is pending?"
2) The High Court has answered the aforesaid question D
in favour of assessee holding that since the proceedings under
the old Section 11 B oftheAct had attained finality, the amended
provision of Section 11 B of the Act, in particular, proviso to
sub-section (1) shall not apply. In other words, the principle of
'unjust enrichment' which was introduced by way of amendment E
of Section 11 B in the year 1991 shall not be attracted in the
instant case as the proceedings under the unamended Section
stood finalised with the direction in the application filed under
unamended Section 11 B of the Act to refund the excise duty F
that was paid by the respondent/assessee. To put it pithily,
the High Court has held that merely because implementation
of the aforesaid order was pending, in the sense that direction
to refund the amount had not been carried out, the authority
could not go into the question of unjust enrichment by invoking G
the proviso to sub-section ( 1) of Section 11 B. of the Act that
had been introduced by that time by way of amendment in
Section 11 B of the Act. Therefore, it was not open to the
concerned officer, who was only supposed to carry out the
implementation of the order, to go into the question as to H
262 SUPREME COURT REPORTS [2015] 9 S.C.R.
A whether there was any unjust enrichment on the part of the
assessee or not. In coming to this conclusion, the High Court
has extensively referred to a 9-Judge Bench of this Court in
the case of Mafatlal Industries Ltd. and Others v. Union of
India and Others 1.
B
3) It is not disputed before us that the law laid down in the
aforesaid judgment would be applicable. However, the
appellant contends that there is a small window left open in
the said judgment which would cover the situation that has
C arisen in the present case. As per the case set up by the
appellant, even where order is yet to be implemented, though
passed under the unamended provision, at this stage of
implementation as well the question of unjust enrichment can
be gone into by the concerned authority.
D
4) We may point out at this stage itself that Section 11 B,
as it existed prior to its amendment in the year 1991, did not
contain any provision of unjust enrichment. Thus, if the
assessee was entitled to refund of duty under the Act, it could
E make an application for such a refund to the Assistant Collector
of Central Excise before the expiry of six months from the refund
date and the procedure how such application is to be dealt
with was stipulated in the said provision. This Section was
. amended with effect from 20.09.1991 by Central Excise and
F Customs Laws (Amendment) Act, 1991. Under the amended
provision, while considering the application for refund, the
Assistant Collector of Central Excise is empowered to go into
the question as to whether incidence of such duty has been
passed on by the person claiming refund to any other person.
G If the claimant has passed on the incidence of excise duty to
other person then the application for refund can be rejected
· on the ground that" it would amount to unjust enrichment to that
· person who is not out of pocket even when the excise duty
H 1
· (1997) s sec 536
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 263
DALMIACEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
was paid in excess etc. Proviso to this sub-section (1) further A
provides that even when application for refund was filed before
the amendment of this Section and still pending, it shall be
deemed that such an application made under amended sub-
section ( 1) of Section 11 B of the Act and is to be dealt with in
accordance with the provisions of sub-section (2), substituted B
by the amendment. Thus, the applications even filed under
the unamended Act, if not disposed of and still pending, are to
be treated as filed under the amended Section 11 B and the
consequence thereof is that even in respect of such
applications doctrine of "unjust enrichment" would be C
applicable. In this scenario, when an application was not
pending, in the sense that orders thereon had already been
passed directing refund but the amount had not been refunded
so far, we have to determine as to whether such a situation D
has also to be dealt with under the amended section thereby
bringing into operation the doctrine of "unjust enrichment"? As
mentioned above, the High Court has answered this question
in the negative and this Court is called upon to decide the
veracity of the said view taken by the High Court in the instant E
appeal.
5) The facts which need to be noted for the purposes of
this appeal do not need a large canvass and are recapitulated
in brief, as under:
F
6) The period involved for which the respondent wanted
refund of the excise duty paid by it is 1970-1978. It may be
mentioned that there was a dispute regarding the assessable
value of cement cleared by the assessee during the aforesaid
period, when excise duty of cement was ad valorem. The G
dispute related to freight involved in the dispatch of the cement
to various destinations. The Department had included the cost
of freight as well while determining the assessable value in
terms of Section 4 of the Central Excise and Salt Act, 1944 H
(hereinafter referred to as the 'Act'). It was decided in favour
264 SUPREME COURT REPORTS [2015] 9 S.C.R.
A of the assessee vide order dated 06.06.1989 passed by the .
CEGAT. In spite of this decision, amount was not refunded_.
This prompted respondent to file Civil Writ No. 3225 of.1991
in the High Court of Delhi seeking writ, order or direction for
initiating contempt of court proceedings against the Collector
B of Central Excise, Tiruchirapalli and Assistant Collector of
Central Excise, Tiruchirapalli for not granting the refund despite
the order of the CEGAT. The said writ petition was disposed
of on 18.07.1995. Taking note of the statement of counsel for
both the parties that a date may be fixed before the Collector/
C Assistant Collector to go into the question if the appellant
should be granted refund in spite of Section 11 B of the Act,
direction was given to appear before the Collector/Assistant
Collector on 22.09.1995 and the writ petition was disposed
D of. Pursuant to the said direction, hearing was granted by the
Assistant Commissioner who passed orders dated
28.03.1996 holding that assessee was not eligible to get the
refund as per amended provisions of Section 11 B of the Act
and directed that this amount be credited to the Consumer
E Welfare Fund established under Section 12C of the Act. The
reason for rejecting the claim of the assessee was that the
case of the respond~nt fell within the four walls of the concept
of "unjust enrichment". Feeling aggrieved by this order, appeal
was filed before the Commissioner of Customs and Central
F Excise (Appeal) which was dismissed on 20.12.1996. Further,
appeal was preferred before the CEGAT and in this attempt
the assessee triumphed inasmuch as Tribunal decided the
case in favour of assessee holding that since no proceedings
were pending before the Assistant Commissioner as far as
G application for refund is concerned and it was only the
execution of the order of refund that was passed much prior to
1991, amended provision of Section 11 B would not be
attracted. The appellant filed rectification application which was
dismissed by the Tribunal on 20.02.2002. Thereafter, appellant
H filed reference application before the High Court of Delhi in
terms of 35G(3) of the Act raising the question of law which
COMMNR. OF CENTRAL EXCISE, TIRlJCHIRAPALLI v. 265
DALMIACEMENT(BHARAT) LTD. [A. K. SIKRI, J.]
has already been reproduced in the earlier part of this A
judgment. Again, as pointed out above, the High Court has
answered this question in favour of assessee, recording the
following findings: ·
"(a) It has been held that there are no merits in this B
reference, as the question involved is clearly settled by
the 9-Judge Bench decision of this Hon'ble Court in the
case of Mafatlal Industries Ltd. (supra) wherein this
Hon'ble Court held that if an application for refund has
been disposed off, and the order had become final before c
the 1991 amendment to Section 11 B came into force,
the principles of unjust enrichment will not apply.
(b) Section 11-B, after the 1991 amendment, stated that
the party applying for refund had to establish that the
D
incidence of such duty had not been passed on by him to
any other person. It follows, therefore, that Parliament did
not apply the principles of unjust enrichment to cases
covered by the unamended Section11 Band it was the
reason that the amendment was made in Section 11-B
E
in 1991."
7) On the basis of what is pointed out above, it is clear
that the exercise to be undertaken is to find out the ratio laid
down in Mafat/a/ Industries Ltd. (supra) in the given situation.
Before we advert to the same, we deem it appropriate to refer F
to, at this stage, unamended and amended provisions of
Section 11B.
"Section 118: Claim for refund of duty (1)Any person
·claiming refund of any duty of excise may make an G
application for refund of such duty to the Assistant
Collector of Central Excise before the expiry of six months
from the relevant date.
Provided that the limitation of six months shall not apply
H
where any duty has been paid under protest.
266 SUPREME COURT REPORTS [2015] 9 S.C.R.
A (2) If on receipt of any such application, the Assistant
Collector of Central Excise is satisfied that the whole or
any part of the duty of excise paid by the applicant should
be refunded to him, he may make an order accordingly.
8 (3) Where as a result of any order passed in appeal or
revision under this Act refund of any duty of excise
becomes due to any persons the Assistant Collector of
Central Excise may refund the amount to such person
without his having to make any claim in that behalf.
c (4) Save as otherwise provided by or under this act, no
claim for refund of any duty of excise shall be entertained.
(5) Notwithstanding anything contained in any other law,
the provisions of this Section shall also apply to a claim
D for refund of any amount collected as duty of excise made
on the ground that the goods in respect of which such
amount was collected were no excisable or were entitled
to exemption from duty and no court shall have any
jurisdiction in respect of such claim."
E
8) After 1991 amendment, the material part of Section 118
reads as follows:
"118. Claim for refund of duty and interest, if any, paid on
such duty.-(1) Any person claiming refund of any duty of
F
excise and interest, if any, paid on such duty may make
an application for refund of such [duty and interest, if any,
paid on such duty to the Assistant Commissioner of
Cent~al Excise or Deputy Commissioner of Central
G 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 to in section 12A) as the applicant may furnish
H to establish that the amount of duty of excise and interest,
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 267
DALMIACEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
if any, paid on such duty in relation to which such refund A
is claimed was collected from, or paid by, him and the
incidence of such duty and interest, if any, paid on such
duty had not been passed on by him to any other person:
Provided that where an After 1991 amendment, the B
material part of Section 11 B reads as follows:application
for refund has been made before the commencement of
the Central Excises and Customs Laws (Amendment)
Act, 1991 (40of1991 ), such application shall be deemed
to have been made under this sub-section as amended c
by the said Act and the same shall be dealt with in
accordance with the provisions of sub-section (2) as
substituted by that Act:
Provided further that the limitation of one year shall not
D
apply where any duty and interest, if any, paid on such
..
· duty has been paid under protest.
(2) If, on receipt of any such application, the Assistant
Commissioner of Central Excise or Deputy
Commissioner of Central Excise is satisfied that the E
whole or any part of the duty of excise and interest, if any,
paid on such duty paid by the applicant is refundable, he
may make an order accordingly and the amount so
determined shall be credited to the Fund:
F
Provided that the amount of [duty of excise and interest,
if any, paid on such duty as determined by the Assistant
Commissioner of Central Excise or Deputy
Commissioner of Central Excise under the foregoing
provisions of this sub-section shall, instead of being G
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;
H
268 SUPREME COURT REPORTS [2015] 9 S.C.R.
A (b) unspent advance deposits lying in balance in the
applicant's account current maintained with the
Commissioner of Central Excise or Commissioner of
Central Excise;
B (c) refund of credit of duty paid on excisable goods used
as inputs in accordance with the rules made, or any
notification issued.After 1991 amendment, the material
part of Section 11 B reads as follows: under this Act;
c (d) the duty of excise and interest, if any, paid on such
duty paid by the manufacturer, if he had not passed on
the incidence of such duty and interest, if any, paid on
such duty to any other person;
(e) the duty of excise and interest, if any, paid on such
D
duty borne by the buyer, if he had not passed on the
incidence of such duty and interest, if any, paid on such
duty to any other person; ••
(f) the duty of excise and interest, if any, paid on such
E duty 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
F the first proviso shall be issued unless in the opinion of
the Central Government the incidence of duty and interest,
if any, paid on such duty has not been passed on by the
persons concerned to any other person.
G (3) Notwithstanding anything to the contrary contained in
any judgment, decree, order or direction of the Appellate
Tribunal or any Court 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
H provided in sub-section (2).
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 269
DALMIACEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
(4) Every notification under clause (f) of the first proviso A
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 reassembly, and the Central Government shall
seek the approval of Parliament to the notification by a B
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 c
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.
(5) For the removal of doubts, it is hereby declared that D
any notification issued under clause (f) of the first proviso
·to sub-section (2), including any such notification
approved or modified under sub-section (4), may be
rescinded by the Central Government at·any time by
notification in the Official Gazette. E
Explanation.-Forthe purposes of this section,-
(A) "refund" includes rebate of duty of excise on excisable
goods exported out of India or on excisable materials F
used in the manufacture of goods which are exported
out of India;
(B) "relevant date" means,-
( a) in the case of goods exported out of India where a G
refund of excise duty paid is available in respect of the
goods themselves or, as the case may be, the excisable
materials used in the manufacture of such goods,-
H
270 SUPREME COURT REPORTS [2015] 9 S.C.R.
A (i) if the goods are exported by sea or air, the date on
which the ship or the aircraft in which such goods are
loaded, leaves India, or
(ii) ifthe goods are exported by land, the date on Which
B such goods pass the frontier, or "'
(iii) if the goods are exported by post, the date of dispatch
of goods by the Post Office concerned to a place outside
India;
c (b) in the case of goods returned for being remade,
refined, reconditioned, or subjected to any other similar
process, in any factory, the date of entry into the factory
forthe purposes aforesaid;
D (c) in the case of goods to which banderols are required
to be affixed if removed for home consumption but not
so required when 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;
E
(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 duty leviable
F on his production of certain goods, if after the
manufacturer has made the payment on the basis of such
rate for any period but before the expiry of that period
such rate is reduced, the date of such reduction;.
G (e) in the case of a person, other than the manufacturer,
the date of purchase of the goods by such person;
(ea) in the case of goods which are exempt from payment
of duty by a special order issued under sub-section (2)
H of section 5A, the date of issue of such order;
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 271
DALMIACEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
(eb) in case where duty of excise is paid provisionally A
under this Act or the rules made thereunder, the date of
adjustment of duty after the final assessment thereof;
(ec) in case where the duty becomes refundable as a
consequence of judgment, decree, order or direction of B
appellate authority, Appellate Tribunal or any court, the
date of such judgment, decree, order or direction;
(f) in any other case, the date of payment of duty."
f
9) We have already narrated the facts and events in the c
instant case in detail above. However, it is pertinent to keep in
mind that applications for refund of excise which were preferred
by the assessee had already been allowed finally by the orders
of CEGAT dated 01.06.1989 and 06.06.1989. This obviously
D
happened before the amendment in the Section in the year
1991. At the same time, the refund had not been actually paid
to the assessee till 1991 when the provisions of Section 11 B
came to be amended. We now advert to the decision in the
case of Mafat/al Industries Ltd. (supra). E
10) It is a nine Judge Bench decision. Majority opinion
was delivered by B.P. Jeevan Reddy, J. for himself and on.
behalf offour other Judges. K.S. Paripoornan, J. and S.C.Sen,
J. wrote their separate opinions. Hansaria, J. agreed with the
•• conclusions and reasoning of Paripoornan, J. However, insofar
F
as issue at hand is concerned, they concurred with the majority
opinion rendered by B.P. Jeevan Reddy, J. Thus, eight out of
nine Judges have taken the same view. A.M. Ahmadi, the then
Chief Justice, was the only dissenting Judge, who took contrary G
view on this particular issue. With this background in mind,
we reproduce the following relevant portions from the opinion
of B.P. Jeeven Reddy, J.:
H
272 SUPREME COURT Rl::PORTS [2015] 9 S.C.R.
A "57. The first decision of this Court to consider the
amended Section 11-8 is in Union of India v. Jain
Spinners Ltd(1992) 4 SCC 389 The validity of the 1991
(Amendment) Act was, however, neither raised nor
considered by the court. The impugned orders of the High
8 Court, made before the coming into force of the 1991
(Amendment) Act, directing refund of the excess duty
collected to the manufacturers, this Court held, would
defeat the provisions of amended Section 11-8 which
had come into force during the pendency of the refund
c proceedings. The Court held that so long as the refund
proceedings are pending, the amended provisions get
'
attracted and disentitle the manufacturer-payer from
claiming any refund contrary to the said provisions. In
other words, the contention of the manufacturers that the
D
amended Section 11-8 applies only to claims of refund
arising after the coming into force of the said Amendment
Act was rejected.
96. There is yet another circumstance: Section 12-8 does
E not create anew presumption unknown till then; it merely
gives. statutory shape to an existing situation, as
explained herein before. At the most, it can be said that
·there were two views on the subject and Section 12-8
F
affirms one of them. Even without Section 12-8, the true
position is the same, as held by us in the earlier part of ...
this judgment. The obligation to prove that duty has not
been passed on to another person is always there as a
precondition to claim of refund. It cannot also be said
G that by giving retrospective effect to Section 11-8, any
vested rights or substantive rights are being taken away.
The deprivation, if at all, is not real. The manufacturer
has already collected the duty from his purchaser and
has thus reimbursed itself. By applying for refund yet, he
H is trying to reap a windfall; deprivatio~ of that cannot be
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 273
DALMIACEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
said to be real or substantial prejudice or loss. A A
manufacturer had no vested legal right to refund even
when he had passed on the burden of duty to others. No
law conferred such a right in him - not Article 265, nor
Section 11-B. It was only on account of an incorrect view
of law taken in Kanhaiya Lal 1959 SCR 1350 : AIR 1959 B
SC 135: (1958) 9 STC 747 and that cannot be treated
as a vested legal right. Correction ofjudicial error does
not amount to deprivation of vested/substantive ri_ghts,
even though a person may be deprived of an
unwarran_ted advantage he had under the overruled
_c
decision. In cases, where the burden is not passed on,
there is no prejudice; he can always get the refund.
97. There is yet another circumstance: Section 12-B does
not create a new presumption unknown till then; it merely D
gives statutory shape to an existing situation, as
explained hereinbefore. At the most, it can be said that
there were two views on the subject and Section 12-B
affirms one of them. Even without Section 12-B, the true
.. position is the same, as held by as in the earlier part of
this judgment. The obligation to prove that duty has not
E
been passed on to another person is always there as a
precondition to claim of refund. It cannot also be said
that by giving retrospective effect to Section 11-B, any
F
vested rights or substantive rights are being taken away.
The deprivation, if at all, is not real. The manufacturer
has already collected the duty from his purchaser and
has thus reimbursed itself. By applying for refund yet, he
is trying to reap a windfall; deprivation of that cannot be G
said to be real or substantial prejudice or loss. A
• manufacturer had no vested legal right to refund even
when he had passed on the burden of duty to others. No
law conferred such a right in him - not Article 265, nor
__. Section 11-B. It was only on account of an incorrect view H
274 SUPREME COURT REPORTS [2015] 9 S.C.R.
A. of law taken in Kanhaiya Lal 1959 SCR 1350 : AIR 1959 -.
SC 135: (1958) 9 STC 747 and that cannot be treated
as a vested legal right. Correction ofjudicial error does
not amount to deprivation of vested/substantive rights,
even though a person may be deprived of an
B unwarranted advantage he had under the overruled
decision. In cases, where the burden· is not passed on,
there is no prejudice; he can always get the refund.
98. A major attack is mounted by the learned counsel for
c petitioners-appellants on Section 11-B and its allied
provisions on the ground that real purpose behind them
was not to benefit the consumers by refusing refund to
manufacturers (on the ground of passing on the burden)
but only to enable the Government to retain the illegally
D collected taxes. It is suggested that the creation of the
Consumer Welfare Fund is a mere pretence and not an
honest exercise. By reading the Rules framed under
Section 12-D, it is pointed out, even a consumer, who
has really borne the burden of tax and is in a position to
E establish that fact, is yet not entitled to apply for refund of
the duty since the Rules do not provide for such a situation.
The Rules contemplate only grants being made to
· Consumer Welfare Societies. Even in the matter of
making grants, it is submitted, the Rules are so framed
F
as to make it highly difficult for any consumer organisation
to get the grant. There is no provision in the Act, Shri
Nariman submitted, to locate the person really entitled to
refund and to make over the money to him. "We expect a
G sensitive Government not to bluff but to hand back the
amounts to those entitled thereto'', intoned Shri Nariman.
It is a colourable device - declaimed Shri Sorabjee - •
"a dirty trick" and "a shabby thing". The reply of Shri
Parasaran to this criticism runs thus: It ill-becomes the
H manufacturers/assessees to espouse the cause of
•
.. COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 275
DALMIACEMENT(8HARAT) LTD. [A. K. SIKRI, J.]
consumers, when all the while they.had been making a A
killing at their expense. No consumers' organisation-had
come forward to voice any grievance against the said
provisions. Clause (e) of the proviso to sub-section (2)
of Section 11-8 does provide for the buyer of the goods,
to whom the burden of duty has been passed on, to apply 8
for refund of duty to him, provided that he has not in his
turn passed on the duty to others. It is, therefore, not
correct to suggest that the Act does not provide for refund
of duty to the person who has actually borne the burden.
~
There is no vice in the relevant provi~ions of the Act. Rules c
cannot be relied upon to impugn the validity of an
enactment, which must stand or fall on its own strength.
The defect in the Rules, assuming that there is any, can
alw.ays be corrected if the experience warrants it. The
D
Court too may indicate the modifications needed in the
Rules. The Government is always prepared to make the
appropriate changes in the Rules since it views the
process as a "trial and error" method - says Shri
Parasaran. E
105. It would be evident from the above discussion that
the claims for refund under the said two enactments
constitute an independent regimen. Every decision
favourable to an assessee/manufacturer, whether on the
F
question of classification, valuation or any other issue,
does not automatically entail refund. Section 11-8 of the
Central Excises and Salt Act and Section 27 of the
Customs Act, whether before or after the 1991
Amendment- as interpreted by us herein - make every G
refund claim subject to proof of not passing on the burden
of duty to others. Even if a suit is filed, the very same
condition operates. Similarly, the High Court while
examining its jurisdiction under Article 226 - and this
- Court while acting under Article 32 - would insist upon H
276 SUPREME COURT REPORTS [2015] 9 S.C.R.
A the said condition being satisfied before ordering refund.
Unless the claimant for refund establishes that he has
not passed on the burden of duty to another, he would
not be entitled to refund, whatever be the proceeding and
whichever be the forum. Section 11-B/Section 27 are
B constitutionally valid, as explained by us hereinbefore.
They have to be applied and followed implicitly wherever
they are applicable.
108. The discussion in the judgment yields the following
c propositions. We may forewarn that these propositions
7
are set out merely for the sake of convenient reference
and are not supposed to be exhaustive. In case of any
doubt or ambiguity in these propositions, reference must
be had to the discussion and propositions in the body of
D the judgment.
(1) Where a refund of tax/duty is claimed on the ground
that it has been collected from the petitioner/plaintiff-
whether before the commencement of the Central
E Excises and Customs Laws (Amendment) Act, 1991 or
thereafter - by misinterpreting or misapplying the
provisions of the Central Excises and Salt Act, 1944 read
with Central Excise Tariff Act, 1985 or Customs Act, 1962
read with Customs Tariff Act or by misinterpreting or
F misapplying any of the rules, regulations or notifications
issued under the said enactments, such a claim has
necessarily to be preferred under and in accordance with
the provisions of the respective enactments before the
authorities specified thereunder and within the period of
G limitation prescribed therein. No suit is maintainable in
that behalf. While the jurisdiction of the High Courts under
Article 226- and of this Court under Article 32 -cannot
be circumscribed by the provisions of the said
enactments, they will certainly have due regard to the
H
•
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 277
DALMIACEMENT(BHARAT) LTD. [A. K. SIKRI, J.]
• legislative intent evidenced by the provisions of the said A
Acts and would exercise their jurisdiction consistent with
the provisions of the Act. The writ petition will be
considered and disposed of in the light of and in
accordance with the provisions of Section 11-B. This is
for the reason that the power under Article 226 has to be B
exercised to effectuate the rule of law and not for
abrogating it.
The said enactments including Section 11-B of the
Central Excises and Salt Act and Section 27 of the c
Customs Act do constitute "law" within the meaning of
Article 265 of the Constitution of India and hence, any
tax collected, retained or not refunded in accordance with
the said provisions must be held to be collected, retained
or not refunded, as the case may be, under the authority D.
of law. Both the enactments are self-contained
enactments providing for levy, assessment, recovery and
refund of duties imposed thereunder. Section 11-B of the
Central Excises and Salt Act and Section 27 of the
Customs Act, both before and after the 1991 E
(Amendment) Act are constftutionally valid and .have to
be followed and given effect to. Section 72 of the Contract
Act has no application to such a claim of refund and
cannot form a basis for maintaining a suit or a writ
F
petition. All refund claims except those mentioned under
Proposition {ii) below have to be and must be filed and
adjudicated under the provisions of the Central Excises
and Salt Act or the Customs Act, as the case may be. It
is necessary to emphasise in this behalfthatAct provides G
a complete mechanism for correcting any errors whether
of fact or law and that not only an appeal is provided to a
Tribunal-. which is not a departmental organ - but to
this Court, which is a civil court.
H
278 SUPREME COURT REPORTS [2015] 9 S.C.R.
A (i1) Where, however, a refund is claimed on the ground
that the provision of the Act under which it was levied is
or has been held to be unconstitutional, such a claim,
being a claim outside the purview of the enactment, can
be made either by way of a suit or by way of a writ petition.
B This principle is, however, subjectto an exception: Where
a person approaches the High Court or the Supreme
Court challenging the constitutional validity of a provision
but fails, he cannot take advantage of the declaration of
unconstitutionality obtained by another person on another
c ground; this is for the reason that so far as he is
concerned, the decision has become final and cannot
be reopened on the basis of a decision on another
person's case; this is the ratio of the opinion of
Hidayatullah, C.J. in Tilokchand Motichand (1969) 1
D
SCC 110: (1969) 2 SCR 824: AIR 1970 SC 898 and
we respectfully agree with it. Such a claim is maintainable
both by virtue of the declaration contained in Article 265
of the Constitution of India and also by virtue of Section
E 72 of the Contract Act. In such cases, period of limitation
would n_aturally be calculated taking into account the
principle underlying clause (c) of sub-section (1) of
Section 17 of the Limitation Act, 1963. A refund claim in
such a situation cannot be governed by the provisions of
F the Central Excises and Salt Act or the Customs Act, as
the case may be, since the enactments do not
contemplate any of their provisions being struck down
and a refund claim arising on that account. In other words,
a claim of this nature is not contemplated by the .said
G enactments and is outside their purview.
(iii) A claim for refund, whether made under the provisions
of the Act as contemplated in Proposition (1) above or in
a suit or writ petition in the situations contemplated by
Proposition (i1) above, can succeed only ifthe petitioner/
H
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 279
DALMIACEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
plaintiff alleges and establishes that he has not passed A
~ on the burden of duty to another person/other persons.
His refund claim shall be allowed/decreed only when he
establishes that he has not passed on the burden of the
duty or to the extent he has not so passed on, as the
case may be. Whether the claim for restitution is treated B
as a constitutional imperative or as a statutory
requirement, it is neither an absolute right nor an
unconditional obligation but is subject to the above
requirement, as explained in the body of the judgment.
Where the burden of the duty has been passed on, the c
claimant cannot say that he has suffered any real loss or
prejudice. The real loss or prejudice is suffered in such a ·
case by the person who has ultimately borne the burden
and it is only that person who can legitimately claim its
D
refund. But where such person does not come forward
..
or where it is not possible to refund the amount to him for
one or the other reason, it is just and appropriate that
that amount is retained by the State, Le., by the people.
There is no immorality or impropriety involved in such a E
proposition.
The doctrine of unjust enrichment is a just and salutary
doctrine. No person can seek to collect the duty from
both ends. In other words, he cannot collect the duty from
his purchaser at one end and also collect the same duty F
from the State on the ground that it has been collected
from him contrary to law. The power of the Court is not
meant to be exercised for unjustly enriching a person.
The doctrine of unjust enrichment is, however,
inapplicable to the State. State represents the people of G
the country. No one can speak of the people being unjustly
enriched.
(iv) It is not open to any person to make a refund claim
on the basis of a decision of a court or tribunal rendered H
280 SUPREME COURT REPORTS [2015] 9 S.C.R.
A in the case of another person. He cannot also claim that
the decision of the court/tribunal in another person's case
has led him to discover the mistake of law under which
he has paid the tax nor can he claim that he is entitled to ·
prefer a writ petition or to institute a suit within three years
B of such alleged discovery of mistake of law. A person,
whether a manufacturer or importer, must fight his own
battle and must succeed or fail in such proceedings. Once
the assessment or levy has become final in his case, he
cannot seek to reopen it nor can he claim refund without
c reopening such assessmenUorder on the ground of a
decision in another person's case. Any proposition to
the contrary not only results in substantial prejudice to
public interest but is offensive to several well-established
principles of law. It also leads to grave public mischief.
D
Section 72 of the Contract Act, or for that matter Section
17(1 )(c) of the Limitation Act, 1963, has no application
to such a claim fOf refund.
( v) Article 265 of the Constitution has to be construed in
E the light of the goal and the ideals set out in the Preamble
to the Constitution and in Articles 38 and 39 thereof. The
concept of economic justice demands that in the case of
indirect taxes like Central Excises duties and Customs
duties, the tax collected without the authority of law shall
F not be refunded to the petitioner-plaintiff unless he alleges
and establishes that he has not passed on the burden of
duty to a third party and that he has himself borne the
burden of the said duty.
G (vi) Section 72 of the Contract Act is based upon and
incorporates a rule of equity. In such a situation, equitable
considerations cannot be ruled out while applying the said
provision.
(vii) While examining the claims for refund, the financial
H chaos which would result in the administration of the State
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 281
DALMIACEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
by allowing such claims is not an irrelevant consideration. A
Where the petitioner-plaintiff has suffered no real loss or
prejudice, having passed on the burden of tax or duty to
another person, it would be unjust to allow or decree his
claim since it is bound to prejudicially affect the public
exchequer. In case of large claims, it may well result in B
financial chaos in the administration of the affairs of the
State.
(viii) The decision of this Court in STO v. Kanhaiya Lal
Mukundlal Saraf-must be held to have been wrongly c
decided insofar as it lays down or is understood to have
laid down propositions contrary to the propositions
enunciated in (1) to (vii) above. It must equally be held
that the subsequent decisions of this Court following and
applying the said propositions in Kanhaiya Lal have also D
been wrongly decided to the above extent. This
declaration - or the law laid down in Propositions (1) to
(vii) above - shall not however entitle the State to recover
the taxes/duties already refunded and in respect whereof
no proceedings are pending before any authority/Tribunal E
or Court as on this date. All pending matters shall,
however, be governed by the law declared herein
notwithstanding that the tax or duty has been refunded
pending those proceedings, whether under the orders of
an authority, Tribunal or Court or otherwise. F
(ix) The amendments made and the provisions inserted
by the Central Excises and Customs Law (Amendment)
Act, 1991 in the Central Excises and Salt Act and the
Customs Act are constitutionally valid and are G
unexceptionable.
(x) By virtue of sub-section (3) to Section 11-B of the
Central Excises and Salt Act, as amended by the
aforesaid Amendment Act, and by virtue of the provisions
H
282 SUPREME COURT REPORTS [2015] 9 S.C.R.
A contained in sub-section (3) of Section 27 of the Customs
Act, 1962, as amended by the said Amendment Act, all
claims for refund (excepting those which arise as a result
of declaration of unconstitutionality of a provision
whereunder the levy was created) have to be preferred
B and adjudicated only under the provisions of the
respective enactments. No suit for refund of duty is
maintainable in that behalf. So far as the jurisdiction of
the High Courts under Article 226 of the Constitution -
or of this Court under Article 32 - is concerned, it
c remains unaffected by the provisions of the Act. Even
so, the Court would, while exercising the jurisdiction under
the said articles, have due regard to the legislative intent
manife~ted by the provisions of the Act. The writ petition
woul~ naturally be considered and disposed of in the light
D
of and in accordance with the provisions of Section 11-
B. This is for the reason that the power under Article 226
has to be exercised to effectuate the regime of law and
not for abrogating it. Even while acting in exercise of the
E said constitutional power, the High Court cannot ignore
the law nor can it override it. The power under Article
226 is conceived to serve the ends of law and not to
transgress them.
(xi) Section 11-B applies to all pending proceedings
F 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 have been
G
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-
H 9-1991 ), they cannot be reopened and/or governed by
284 SUPREME COURT REPORTS [2015] 9 S.C.R.
A force. I am of the opinion that if the said provisions are
held applicable, even to matters concluded by the
judgments or final orders of courts, it amounts to stating
that the decision of the court shall not be binding and will
result in reversing or nullifying the decision made in
B exercise of the judicial power. The legislature does not
possess such power. The court's decision must always
bind parties unless the condition on which it is passed
are so fundamentally altered that the decision could not
have been given in the altered circumstances ......... "
c
12) The same view has been expressed by S.C. Sen, J.:
"255. I shall now examine the other provisions of the
. newly-added sections. Sub-section (1) of Section 11-8
requires an application for refund to be made. Sub-
D
section (2) requires the Assistant Commissioner to pass
an order of refund provided the conditions set out therein
are fulfilled. Sub-section (3) merely lays down that no
refund shall be made except as provided in sub-section
E (2). There is a non obstante clause that this will operate
notwithstanding anything to the contrary contained in any
judgment, decree, order etc. It is obvious that new
provisions will apply in cases where applications for
refund were made before the new provisions came into
F force and also subsequently. Sub-section (3) has no
retrospective effect. When a case has been finally heard
and disposed of and no application for refund need be
made, sub-section (3) cannot apply. If there is a judgment,
decree or order which has to be carried out, the legislature
G cannottake away the force and effect of that judgment,
decree or order, except by amending the law
retrospectively on the basis of which the judgment was
pronounced."
H 13) Notwithstanding, the aforesaid dicta, Mr. Panda,
learned senior counsel appearing for the appellant, still sees
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 283
DALMIACEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
Section 11-8(3) [as amended by the 1991 (Amendment) A
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.
B
(xit) Section 11-B does provide for the purchaser making
the claim for refund provided he is able to establish that
he has not passed on the burden to another person. It,
therefore, cannot be said that Section 11-B is a device
to retain the illegally collected taxes by the State. This is c
equally true of Section 27 of the Customs Act, 1962."
11) It is clear from the above that in no unambiguous terms
and with utmost clarity and certainty, the majority interpreted
amended provisions of Section 11 B including proviso to sub-
0
section (1) thereof to hold that so long as refund proceedings
are pending, the amended provision would get attracted and
would disentitle the manufacturer/payer from claiming any
refund contrary to the said proviso. However, in those cases
where the refund proceedings had finally been terminated, in E
the sense - that the appeal period has also expired - before
the commencement of the amended provision, these cannot
be re-opened and/or governed by the amended provision.
Concurring with the aforesaid view, K.S. Paripoornan, J.
expressed his opinion in the following manner: F
"342 ...... Sections 11-8(2) and (3) cannot be made
applicable to refunds already ordered by the court or the
refund ordered by the statutory authorities which have
become final. It follows from a plain reading of Section
G
11-B, clauses (1), (2) and (3) of the Act. The provisions
contemplate the pendency of the application on the date
of the coming into force of the Amendment Act or the
filing of an application which is contemplated under law
to obtain a refund after the Amendment Act comes into H
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 285
DALMIACEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
some light coming through a small .window as he wants pending A
proceedings to include a situation where refund had not been
granted, even when the order was passed, with the submission
that the Assistant Commissioner even at this stage was
competent to go into the question of unjust enrichment as order
regarding grant of refund was post 1991 event. To buttress B
this submission, he argued that the principle of unjust
enrichment was in the domain of public interest and intention
by incorporating provisions like proviso to sub-section (1) of
Section 11 was clear, namely, so far as amount is not actually
refunded, the authorities were competent to invoke this doctrine C
of "unjust enrichment". It was argued that it will be totally
inequitable and unfair to the public as the party (assessee
herein) would be unjustly enriched. He also relied upon the
orders dated 18.07.1995 by the High Court in Civil Writ No.
0
3225 of 1991 specifically permitting the Assistant Collector to
go into the question whether the assessee is to be granted
the refund in spite of amended Section 11 B of the Act with the
following observation :
"Both the Counsel agree that a date may be fixed when E
the petitioner shall appear before the collector/Assistant
Collector, Central Excise, Trichiapalli, to go into the
question if petitioner should be granted the refund in spite
of Section 11 B of the Central Excise and Salt Act. We,
F
accordingly, direct that petitioner shall appear before the
concerned Collector/Assistant Collector, Central Excise,
Trichirapalli on 22"d September 1995. no further orders
are required in this petition, which stands disposed of."
· 14) After examining the matter in its entirely, we find that G
it is not possible to countenance the aforesaid submission of
Mr. Panda. In the first instance, it requires to be remarked that
only after amendment in Section 11 B of the Act in the year
1991, any person applying for refund has to establish that
incidence of such duty has not been passed on by him to any H
286 SUPREME COURT REPORTS [2015] 9 S.C.R.
A other person. The unamended provision did not contain any
such stipulation. Therefore, under the old provision, the only
obligation of the person claiming refund was to make such an
application before the expiry of six months from the relevant
date and to show how the refund was admissible to the
B applicant. In such a case, the Assistant Collector of Central
Excise was to only examine as to whether excise duty was
paid in excess etc. and was refundable to the claimant as a
· result of adjudication of the dispute or otherwise. It is only in
the amended provision that additional stipulation is provided
C as per which the claimant is required to file, along with
application for refund, such documentary mother evidence
including documents referred to any Section 12AoftheAct to
establish that the amount of duty of excise was collected from
the claimant or paid by the claimant and that "incidence of such
0
duty had not been passed on by him to any other person". It
clearly follows from the above that before the amendment of
Section 11 B of the Act, principle of unjust enrichment was not
incorporated under the unamended provision. In fact that was
E precisely the reason for amending the provision so that this
doctrine of "unjust enrichment" is incorporated, viz., to take care
of the mischief that was prevailing under the unamended
provision which was removed by making amendment,
popularly known as Heydon's Mischief Rule.
F
15) Proviso to sub-section (1) of Section 118, as
amended, would be applicable in a situation where an
application for refund made before the said amendment was
still pending at the time when the provisions of Section 11 B
G were amended. This is how the said proviso is interpreted by
this Court in Mafatlal Industries Ltd. (supra).
16) Once we find that no such application was pending
and the orders on the said application had already been
H passed, the proviso ceases to have any application. The
reason, even otherwise, is very obvious. Section 11 B relates
COMMNR. OF CENTRAL EXCISE, TIRUCHIRAPALLI v. 287
DALMIA CEMENT (BHARAT) LTD. [A. K. SIKRI, J.]
to claim for refund of duty and the procedure for such a refund A
is stipulated in this section. As per sub-section (1) thereof,
any person claiming refund of any duty of excise has to move
an application for refund of such duty to the Assistant
Commissioner of Central Excise. Once such an application
is made, the same is to be considered in accordance with this B
provision. As already pointed out above, under the unamended
provision, the Assistant Commissioner was not required to go
into the question as to whether incidence of such duty had been
passed on by the applicant claiming refund to any other person
or not. However, if the application was not decided till the time C
amendment was incorporated in the year 1991, as. per the
proviso, while dealing with such an application for refund, the
Assistant Commissioner is still empowered to go into this
question even when the application was filed before the.
0
commencement of the amended provision. This situation
would prevail only when there is a pending application before
the Assistant Commissioner of Central Excise, which is yet to
be decided. If the order for refund on such an application had
already been passed before coming into force the amended E
provision and no application was pending at the
commencement of the Central Excise and Customs Laws
(Amendment) Act, 1991 before the Assistant Commissioner
and, therefore, question of applying the said proviso and going
into the issue as to whether incidence of such duty had been F
passed by the applicant to any other person or not would not
arise. Thereafter, order passed on the application is only to
be implemented by giving the refund as per that order. By no
stretch of imagination, the Officer, at the time of carrying out
the orders for refund, which have already been passed, can G
be invested with the powers to go into the question of unjust
enrichment by invoking the proviso to sub-section (1) of Section
11 B. In the instant case, the order on the refund application of
the respondent had been passed on 06.06.1989, which was
much before the amended provision came into operation. In H
288 SUPREME COURT REPORTS [2015] 9 S.C.R.
A fact, even after the order of refund was passed, the appellant
had not refunded the amount and it is in these circumstances
that writ petition was filed in the High Court for initiation of
contempt proceedings against the defaulting officers. In such
proceedings, the High Court had passed the order dated
B 18.07.1995. In this order, no doubt, the Court observed that
the Assistant Commissioner would go into the question if the
respondent should be granted the refund in spite of Section
11 B of the Act. However, merely because of such observations,
it cannot be said that the Assistant Commissioner was entitled
c to look into the issue of unjust enrichment when if, otherwise,.
he he was otherwise had no jurisdiction to do so in the facts of
the present case. Such observations were given in view of
the statement of the counsel for the Government who brought
to the notice of the Court the amended provisions contained
0
in sub-section (3) of Section 11 B of the Act. The High Court
did not go into the issue as to whether such a course of action
was permissible or not. Another pertinent aspect which needs
to be kept in mind is that the interpretation that is to be accorded
E to the amended provision had not been decided by this Court
till that time and the law on this issue came to be settled in the
year 1997 only when the judgment in Mafatlal Industries Ltd.
(supra) was pronounced by this Court.
F 17) Thus, when the order of the Assistant Commissioner
was challenged and the matter came before the Tribunal, the
Tribunal was duty bound to apply the law laid down in Mafatlal
Industries Ltd. (supra), which it did. Similar exercise is done
by the High Court in the impugned judgment. We find that the
G view taken by the High Court is in consonance with the law
laid down by this Court in the aforesaid case.
18) We find that there is no scope to interfere with the
impugned decision of the High Court and, accordingly, dismiss
this appeal.
No costs.
Nidhi Jain Appeal dismissed.
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