P.K. Desai, M(J). -
(1.) INVOKING the provisions of Section 35G(1) of the Central Excises and Salt Act, 1944, the Departmental authorities have filed these applications, seeking reference to the concerned High Courts, in relation to the questions of law, duly formulated by them in their respective applications, pleading that those questions of law arise out of various orders passed by this Bench, as detailed below:
Ref. Appln. Bench's Order Appeal No. High Court Remarks No. No. and date to which reference could be made E/Ref -7/91 1812/90 E/195/89 Gujarat - - dt. 1.11.1990 E/Ref -9/91 2053/57/90 dt. E/632/90 Bombay Single Ref Appln for both 30.11.1990 E/645/90 the appeals. E/Ref -10/91 714 -737/90 E/120/90 Bombay Single Ref Appl No 12/91 to dt. 10.5.1990 E/134/90 for Appeal Nos. 148/90 E/Ref -13/91 E/145 - and 150/90 and Ref App and 148/90 No 19/91 for Appeal Nos. E/Ref -15/91 E/150/90 134/90 and 135/90 to E/173 - E/Ref -19/91 175/90 E/Ref -22/91 2217 - E/109/90 Bombay and 2224/90 dt. E/l11/90 (For Ref E/Ref -29/91 28.12.1990 E/137 - E/22/91 to 139/90 Appeal No. E/Ref -35/91 E/168/90 E/356/90) E/218/90 Gujarat for E/356/90 the rest
The principal question that was raised in all the aforementioned appeals, and the findings given by this Bench, thereon, was whether refund of the excise duty paid by the manufacturers -assessee, if otherwise admissible, could be denied to them, invoking the principle of unjust enrichment, by the departmental authorities working within the framework of the Central Excises and Salt Act and this Bench placing reliance on several judicial pronouncements, has held that, it is not permissible for the authorities created and functioning under the statute, to go beyond the statutory provisions, and when Section 11B of CESA, 1944, does not provide for refusal of refund claim on that count, the refund cannot be denied on that count.
(2.) THOUGH , in the different sets of applications, different phraseology is used in formulating the questions on which reference is sought, and more than one question are formulated, considering the crux of the pleadings as also the submissions made, the question of law, on which reference to High Courts, is sought for can be formulated as under:
Whether the doctrine of unjust enrichment can be introduced by the authority working under the specific Tax Statute (Central Excises and Salt Act, 1944), so as to enable itself to reject the claim by the manufacturers for refund of duty paid by them, and who are otherwise eligible to get the refund, on the ground that burden of the duty amount, for which the refund is claimed, has been passed over to the consumers?
(3.) BEFORE taking up the main issue for consideration, decision on one minor aspect is called for. Reference Application No. E/7/91 as filed, is beyond the stipulated period of limitation of sixty days from the date of communication of this Bench's order No. 1812/91 WRB dt. 1.11.1990. The order was communicated on 27.11.1990 and period of sixty days stood expired on the day ending 26.1.1991. The application for reference is however filed on 30.1.1991. Excluding the date of filing of the application, the delay is only of 3 days and the applicants have filed E/COD -13/91, for condonation of delay. It is permissible to the Tribunal to condone the delay. The delay of three days, has been duly explained, and in exercise of our powers, we condone the delay. Application No. E/COD -13/91 is therefore allowed.
Advancing his submissions on the principal issue for consideration, Mr. Mondal, the Ld SDR, laying down foundation for the same, has stated that while interpreting and implementing any law, certain basic and fundamental principles have to be borne in mind, and one of them is that none should be permitted to enrich himself at the cost of others, and that, any refund of the amount, has to go to the person who has actually paid the same. Referring to the provisions of Section 11B of the CESA, 1944 he has pleaded that the word "any person", need not be read as to mean, only the person who is instrumental in handing over the duty amount to the Government. He has submitted that the Central Excises and Salt Act, 1944, belongs to the family group of statutes providing for Indirect Tax Structure, where though the excise duty levied on any manufactured product is collectable from the manufacturers, they act merely as intermediaries and the collecting agencies, who pass over the burden of the duty amount paid by them to the consumers of the manufactured product, by formulating appropriate price structure. Referring to the CEGAT Special Bench 'C decision in Hindustan Fertilizers Corporation v. Collector of Customs, Mr. Mondal, has submitted that the Tribunal has also recognised the manufacturers as intermediaries. Referring to the same decision, he has further submitted that the Tribunal has also recognised the equitable principle that the ultimate user would be entitled to the refund and not the manufacturer. Submitting on the main issue raised for consideration, Mr. Mondal, has conceded that, in all the subject appeals, the department had relied upon the decision of the Bombay High Court in Roplas (India) Ltd. v. Union of India but thereafter the same High Court has, vide full Bench decision in New India Industries Ltd. v. Union of India 1990 (46) ELT 23 (Bom) : 1990 (30) ECR 145 (Bombay), taken a contrary view, holding that the view, holding that the view expressed in Re: Roplas (India) Ltd. is not the correct view and the same High Court, has, in Caprihans India Ltd. v. Union of India categorically observed that the view expressed in Re: Roplas (India) Ltd. is not a good law, and that the Bombay High Court has thereafter been confining and endorsing to the view that doctrine of unjust enrichment could not be invoked in rejecting the claim for refund by the manufacturers. He has however submitted that, against a similar decision taken by the Bombay High Court, in the matter filed by one Mr. Lalit Bhaichand Ravani, (details not supplied) the Supreme Court has admitted the SLP No. 4170/91 (Union of India v. Lalit Bhaichand Ravani), where contention of grant of refund being in violation of the principles of unjust enrichment has been raised, and placement of the same for early hearing has been ordered. To substantiate his said statement, Mr. Mondal has shown to us the news item as published in 1991 (31) ECR at page 61J. He has also pleaded that this Bench has been basically relying upon the CEGAT Special Bench 'D' decision in Re: Anand Metal and Steel Works 1989 (23) ECR 154 to hold that the authorities working under the statute, could not deny the refund on the ground of unjust enrichment, and has submitted that based on the ratio of the same decision, CEGAT Special Bench B -l, also held accordingly in Electric Controls and Switch Boards (Pvt.) Ltd. v. CCE, Meerut, 1991 (34) ECR 223 and the Supreme Court has admitted (CA No. 271/1991/CCE, Meerut v. Electric Controls), where, though stay has not been granted, furnishing of security is ordered. To substantiate his statement, Mr. Mondal has referred to news item published in 1991 (34) ECR at page 21J. In his submission, therefore, the issue is still sub judice, and findings given by us for which reference under Section 35G(1) of CESA, 1944, is sought for, has not assumed finality, so as to refuse to refer the issue, as rested on the settled principles of law. Mr. Mondal has then submitted, that the Gujarat High Court has been holding a divergent view, as is reflected from the decision of the said Court in Union of India v. Bnarat Vijay Mills Co. Ltd.
Mr. Mondal has submitted that though the said decision of the Gujarat High Court is given while entertaining first appeal against the decision in a Civil Suit filed in Civil Court, where principles and provisions of Indian Contract Act have also been taken into consideration, the Court has also considered the provisions of Section 11B of CESA, 1944, and referring to the provisions of Section 64A of the Sale of Goods Act, 1930, as also referring to the decision of the Supreme Court in Chhotabhai v. Union of India AIR 1962 SC 1006 : ECR C 147 SC, has come to the conclusion that provisions of Section 64A of the Sale of Goods Act, have to be read as part and parcel of every legislation imposing a duty of excise, and the said High Court has further held that the word "remission" used in Section 64A(1)(b) of the Sale of Goods Act would also include refund, and that the provisions of Section 11B of CESA, 1944, have to be read subject to provisions of Section 64A of Sale of Goods Act, and it could be only the ultimate consumer who could be entitled to refund, and refund to the manufacturer would tantamount to unjust enrichment, which is not permissible. Mr. Mondal has submitted that with two divergent views of two different High Courts within the regional jurisdiction of the Tribunal, the question of law as formulated requires to be referred for getting finality on the point. He has also submitted that, in view of the existing circumstances, the question could and should be referred to the Supreme Court, where even otherwise, the similar points have been pending for decision. ;