A S JOSHI Vs. ASSISTANT COLLECTOR, CUSTOMS AND CENTRAL EXCISE DIVISION

JUDGEMENT

(1.) THE petitioner is seeking issuance of a writ of mandamus directing the respondents to refund an amount of Rs. 84,166.91 paise, which they have paid as excise duty under the mistake of law and a writ of certiorari holding section 11 -B of the Central Excise & Salt Act, so far as it provides that no refund can be issued after a period of six months from the date of payment, as ultra -vires of Articles 14 and 19 -f (g) and 265 of the Constitution of India.

(2.) THE petitioner No. 1 is a share -holder and a Director of the Company. The petitioner No. 2 is a private Limited Company registered under the Companies Act. The petitioner -Company filed the classification list, which was approved by the Assistant Collector on 26 -8 -1981 and accordingly the Tarrif Item No. 68 of Central Excise Tarrif to the tune of Rs. 1,26,616.62 was paid for the period 1 -7 -1981 to 50 -6 -1982 by the petitioners. The petitioners -Company is dealing in the manufacturing of pencils and as per Notification dated 25 -3 -1981, there was exemption of excise duty to the goods being manufactured by the Company as these goods fall under item No - 68 of the first schedule of the Central Excise and Salf Act, 1944, (hereinafter referred to as the Act). The Notification stipulated that there shall be no Excise Duty upto 30 lacs, if the total clearance in any financial year are less than 30 lacs. The petitioner were not aware of the Notification and on 28 -2 -1982, a new finance bill was presented to the Parliament by the Finance Minister and according to this bill, the pencils were totally declared exempted from the payment of the Excise duty and the Company stopped paying excise on pencils from 28 -2 -1982. However, the petitioners in ignorance of the Notification dated 25 -3 -19981 paid the excise tarrif from 1 .7.1981 to 30.6.1982.

(3.) THE petitioners have submitted that the State has no right to retain the excise duty, which has been collected unauthorisedly and the petitioners were under no legal liability or obligation to make the payment as the goods manufactured by the petitioners were exempted from excise duty. The amount collected as excise duty and deposited with the respondent is under the mistake of law and seek its refund through this petition. Section 11 -B of the Act has been challenged as discriminatory and arbitrary on the ground that it discriminates between different manufacturers of the same goods If the clearances of manufacturer are less than 30 lacs and does not deposit the excise duty, then no excise duty shall become liable to paid, on the contrary, another manufacturer, who is also having the first clearances less than 30 lacs and pays the excise duty under the mistake of law, such manufacturer according to Section 11 -B of the Act is not entitled to refund of the claim, if not filed within six months.