M.B.SHARMA,J. - (1.) A limited controversy in this writ petition is as to whether the petitioner is entitled to the refund of the excise duty which was paid the petitioner under protest and if so what is the period of limitation. A question will arise and in my opinion it is an important question, more so in this equitable jurisdiction of this Court as to whether the petitioner is entitled to any amount even if the excise duty was paid by it under protect.
(2.) IT may be stated at the very outset that so far as the liability of the petitioners for payment of excise duty on woollen felts which the petitioners used to manufacture is concerned, it is no longer res Integra in view of the decision of the Supreme Court in the case of Union of India and Ors. v. Gujarat Woollen Felt Mills : 1977(1)ELT24(SC) . In the aforesaid case the question had arisen as to whether the felts manufactured by Gujarat Woollen Felt Mills are 'Woollen fabrics' with in the meaning of Entry 21 in the First Schedule to the Central Excises and Salt Act, 1944 (for short the Act). The High. Court of Allahabad held that the products were not 'woollen fabrics' and directed refund the amount collected as excise duty from the firm. The Supreme Court agreed with the Allahabad High Court and dismissed the appeal. It may be stated that in the case of Zoraster and Co. (Suppliers) Pvt Ltd. v. Union of India and Ors. such firm also used to manufacture woollen fabrics, the Supreme Court in civil appeal No. 1519 and 1920 of 1976 S.M. Jain v. Union of India and Ors. decided on 8th March 1976 had takes a similar view and said, that the case stands covered, by a decision of that court in Civil Appeal 1930 of 1971. The petitioner -firm M/s. Swadeshi Felt . v. Union of India had also taken a view that expression 'woolen fabrics' does not include 'woollen felt' and after the decision of that court in the year 1976 it appears that the petitioner -firm stopped paying excise duty on 7th July 1976. It also filed for refund of excise duty paid vide application dated 19th June, 1970 which according to learned Counsel for the petitioner amounted to Rs. 2,34,960. It appears that the petitioner -firm initially claimed a sum of Rs. 2,34,960 vide Annex,6 for the period from 10th July 1970 to 15th May 1976. But it was called upon to pay revised claim confined by three orders from the date of application, i.e., 19th June, 1976 and the petitioner filed a revised claim for refund to the tune of Rs. 1,28,956. The claim use filed in prescribed form in duplicate. The petitioner was allowed claim of Rs. 1,30,191.91 and the said amount was refunded to the petitioner. For the balance of amount the petitioner filed an appeal before the Collector (appeals). The petitioner also claimed in that appeal that it was entitled for the refund of the excise duty paid from the year 1970 to the date of initial payment at any rate w.e.f. 1st July , 1972 when it started paying the excise duty under protest. The Collector issued show cause notice Under Section 35(2) of the Act to the petitioner firm on 7th June 1980 wherein the petitioner firm was intimated that the collector has refused to grant the refund of the excise duty paid. The petitioner showed cause and thereafter the Collector (Appeals) under order dated 28th April, 1982 made an order reviewing the order of the Assistant Collector and directing to refund of the excise duty but limited the grant of refund to the period of one year prior to the application. It may be stated that the amount comes to Rs. 62,822.22 and the Superintendent Central Excise asked the petitioner firm to pay the amount.
(3.) THE question is as to whether Rule 11 of the Rules will apply or any other rule will apply. This Court had an occasion to examine the question in the case of Man Industrial Corporation v. Superintendent, Central Excise, MOR, Jaipur and Ors. RLR 1989 (1) P. 773 and placed reliance on the earlier case of this Court Shiv Steel -Works v. Union of India 1980 W.L.N 237 wherein it was held that an act done by the Excise authorities cannot be said to be an act done under the Act and Rule 11 read with Rule 174(J) of the Central Excise Rules would not be applicable and that Article 113 of the Limitation, Act, 1963 which is residuary article would be applicable (sic) under Article 113 of the Limitation Act the period of limitation is three year from the date when the mistake is discovered. Once it has been held that the excise duty was not payable under the Act and had been recovered in my opinion it can be said that the recovery was made without due authority of law and cannot be said to be made under the provisions of the Act. Rule 11 of the Rules cannot be attracted which rule can only be attracted in case the act could have done have under the provision of Act or Rule. Therefore, in my opinion the period of limitation is three years from the date when the mistake was discovered The petitioner -firm stopped paying the excise duty from July, 1976 and had also started paying it under protest from 1st July, 1972, An application for refund was filed on 19th June, 1976 and, therefore, in my opinion, the' petitioner was entitled for the refund of the excise duty paid for the last three years immediately preceding to the year 1976. It was entitled for the refund of the excise duty paid during the period from 18th June, 1973 to 19 June, 1.976 and, therefore, the Assistant Collector was right in allowing the claim for three years and the view takes by the Collector Under Section 35A that under Rule 11 only refund for one year was permissible was not correct.;