Decided on May 15,1986



S.Kalyanam, - (1.)THIS reference application is directed against the order of the Tribunal in Appeal No. E/178 of 1985 dated 4. 12.85. The Collector of Central Excise, Madras, who is the applicant has set out the following questions in the reference application as questions of law:
"(i) Whether the aforesaid Tribunal order is correct in law?

(ii) Whether the Tribunal is correct in allowing the refund claim filed by the company by holding that principle of unjust enrichment cannot be imported in dealing with a regular claim for refund of duty under Section 11B of the Central Excises and Salt Act, 1944 when such duty has already been collected by the company from its customers and not been paid back to the customer?"

(2.)Shri Chandramouli, the learned S.D.R. made submissions on the questions set out in the reference application. The first question is purely a question of fact and not a question of law since the correctness of order of the Tribunal cannot be assailed much less reviewed in a reference application. So far as the applicability of the doctrine of unjust enrichment with reference to the refund claim
Arising under Section 11B of the Central Excises and Salt Act, 1944 is concerned, the position is fairly well settled by the judicial pronouncement of the various High Courts including the Supreme Court that the Department cannot withhold the refund otherwise lawfully due to the party on the principles of 'unjust enrichment'.

(3.)THE Constitution Bench of the Supreme Court in the case of R. Abdul Quader and Company v. Sales Tax Officer, 2nd Circle, Hyderabad, reported in AIR 1964 SC 922 has held that "if a dealer has collected anything from a purchaser which is not authorised by the taxing law, that is a matter between him and the purchaser, and the purchaser may be entitled to recover the amount from the dealer. But unless the money so collected is due as a tax, the State cannot by law make it recoverable simply because it has been wrongly collected by the dealer". THE case before the Supreme Court was in respect of sales tax which was so collected and the case pertains to the period when Entry 54 of List II was not amended. THE same principle continues to apply in the case of Excise because there is no provision under the Central Excises and Salt Act, 1944 under which the Excise Department can recover from the assessee any excise duty collected by the assessee from his purchaser which is in excess of the excise duty payable by the assessee under the Act.

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