ORDER
S.L. Peeran, Member (J)
1. This is a Revenue appeal against Order-in-Appeal No. 56/05 CE dated 4.3.2005 by which the Commissioner (A) has allowed the refund claim on the ground that the period of limitation prescribed in terms of Section 11B of the CE Act is not applicable in cases of payments of amounts in excess of the duty amount. The reasoning given by the Commissioner is that such amount which has been paid over and above the excise duty is not tax and that amount the department cannot retain it and the period of limitation is not applicable to such payments and deposits. She has relied on number of rulings in support of the contention. On the proposition that the excess amount of duty so paid and collected without authority of law is required to refunded and the state has no right to retain it is gained strength from the ruling of the Apex Court rendered in the case of Companies of Sales Tax U.P. v. Auriaya Chamber of Commerce, Allahabad reported in 1986 (25) ELT 867 (SC). On the same proposition that duty paid under mistake of law is without authority of law and jurisdiction and is not governed by the law of limitation, the CA has relied on the ruling rendered by Bombay High Court in the case of L.D. Textiles Industries Ltd and Ors. v. UOI and Ors. . The Tribunal ruling rendered in the case of Bajaj Tempo Ltd. v. CCE, Pune has also been relied. Besides these rulings, the judgment of the Calcutta High Court rendered in the case Gonterman Peipers (India) Limited v. Additional Secretary to the Govt. of India has also been relied on.
2. The Revenue is aggrieved with this order and contend that in circumstances were amounts have been paid in excess of duty and where claim for refund has been filed, even in such a circumstances the period of limitation as prescribed under Section 11B of CE Act applies. In this regard, strong reliance is placed on the Apex Court judgment rendered in the case of Asst. Commissioner of Customs v. Anam Electrical Manufacturing Co., , wherein it has been held in clear terms that even in cases where there is a claim for refund of an “illegal levy”, the statutory time limit as prescribed under Section 11B of CE Act would apply. Therefore, the learned JDR seeks for allowing the appeal on this ground alone.
3. On the other hand, the learned Consultant strongly relied on the findings given by the Commissioner (A) and the various citations relied by her in the impugned order. In support of this contention that amounts which are not part of the levy or tax which are required to be reimbursed by the Government, the learned Counsel placed reliance on constitutional bench rendered in the case of Somaiya Organics v. State of Uttar Pradesh . However, the learned Consultant on being queried from the Bench agreed that this judgment did not deal with the aspect of limitation in terms of Section 11B of the CE Act. The learned Consultant also submitted that excess duty paid could be adjusted to other differential duty which would be payable by the assessee. In counter the learned JDR opposed the prayer for adjustment and submitted that the reliance of Bajaj Tempo Ltd. (supra) case, on this aspect is not sustainable.
4. On a careful consideration, we notice that the Revenue has taken a well sustained ground. For the reason that the Apex Court in the case of Asst. Commissioner of Customs v. Anam (supra) had laid down in very clear terms that even in respect of claim for refund of an “illegal levy”, the statutory time limit prescribed in terms of Section 11B of CE Act and Section 27 of Customs Act is not extendable by any authority or court. The Apex Court has given this clarification in the light of the earlier judgments rendered in the case of Mafatlal Industries Limited. v. UOI reported in 1997 (89) 247 (SC). The order of court on this point is reproduced herein below:
2. So far as the question of levy of surcharge of ten percent which is in issue herein is concerned, we affirm the judgment and order of the Madras High Court. So far as the question of refund is concerned, it is obvious that it shall be governed by the law declared in Mafatlal Industries v. Union of India – , read with Clause (6) of the format order, a copy of which is enclosed herewith, which is as follows:
Where a refund application or an appeal is preferred under and in accordance with the directions (1), (2), (3) and (4) above, the same shall be entertained only if the applicant for refund/appellant files affidavit stating that he has not passed on the burden of the duty, which is claimed by way of refund, to another person. In case the applicant for refund is a company or a society, the affidavit shall be sworn by the Managing Director or the Principal Officer of the Company or the Society, as the case may be. Such an affidavit shall be treated as an averment/assertion which an applicant for refund has to make in terms of the judgment in Mafatlal.
3. The appeals are disposed of in the above terms. No costs.
FORMAT ORDER
Pursuant to the directions given in Mafatlal Industries v. Union of India , the appeals/Special Leave Petitions coming up for disposal shall be disposed of in terms of one or the other of the clauses below:
(1) Where a refund application was filed by the manufacturer/purchaser beyond the period prescribed by the Central Excise Act/Customs Act in that behalf, such petition must be held to be untenable in law. Even if in any appeal, suit or writ petition, direction has been given that the refund application shall be considered with reference to the period of limitation prescribed in the Central Excise Act/Customs Act – or that the period of limitation shall be taken as three years – such a direction of the Appellant Court/Civil Court/High Court shall be deemed to be unsustainable in law and such direction shall be set aside. The period prescribed by the Central Excise Act/Customs Act for filing a refund application in the case of “illegal levy” cannot be extended by any Authority or Court.
(2) Where, however, a refund application was filed within the period prescribed by the Central Excise Act/Customs Act but has been dismissed wholly or partly on any ground and the said order is questioned by way of a writ petition or a suit or any appeal arising therefrom the manufacturer/purchaser shall be entitled to withdraw the writ petition, suit or an appeal arising therefrom, as the case may be, and file an appeal before the appropriate appellate authority within sixty days from today. It is clarified herewith that even in a case where such writ petition has been allowed and an appeal filed by the Revenue is pending, the writ petitioner shall be entitled to withdraw the writ petition, in which event, the Revenue appeal shall be disposed of permitting the writ petitioner to withdraw the writ petition to pursue the remedy proposed hereby. If such an appeal is filed, it shall be entertained without raising an objection on the ground of limitation and shall be dealt with in accordance with law. This direction shall apply even in cases where the High Court or Civil Court is approached after exhausting the remedy of appeal to Collector (Appeals). He can file an Appeal to C.E.G.A.T. within sixty days from today, after withdrawing the writ petition or the suit, as the case may be.
(3) Where, however, a writ petition or suit claiming refund was filed directly in the High Court/Civil Court (i.e., without filing a refund application), the petitioner/plaintiff shall be entitled to withdraw such writ petition/suit or any appeal arising therefrom and prefer a refund claim under Section 11B within sixty days from today provided the writ petition or suit was filed within the period prescribed by the Central Excise Act/Customs Act for filing the refund application. It is clarified herewith that even in a case where such writ petition has been allowed and an appeal filed by the Revenue is pending, the writ petitioner shall be entitled to withdraw the writ petition, in which event, the Revenue appeal shall be disposed of permitting the writ petitioner to withdraw the writ petition to pursue the remedy proposed hereby.
(4) The above rules, however, do not apply in the case of a claim for refund of duty levied and recovered under an unconstitutional provision. In such a case, the period of limitation shall be prescribed in Mafatlal Industries. The duty to allege and prove that the duty has not been passed on to another person, of course, remains even in such a case.
(5) Where a person challenges the constitutionality of a provision in the Central Excise Act/Customs Act in a High Court or the Supreme Court but fails in his challenge to constitutionality, he cannot take advantage of the decision in the case of another person striking down the said provision, as explained in the judgment. This rule is evolved in the particular context of refund claims under these two enactments and has to be observed.
(6) Where a refund application or an appeal is preferred under and in accordance with the directions (1), (2), (3) and (4) above, the same shall be entertained only if the applicant for refund/appellant files affidavit stating that he has not passed on the burden, of the duty, which is claimed by way of refund, to another person. In case the applicant for refund is a company or a society, the affidavit shall be sworn by the Managing Director of the Principal Officer of the Company or the Society, as the case may be. Such an affidavit shall be treated as an averment/assertion which an applicant for refund has to make in terms of the judgment in Mafatlal.
(7)(a) Where the refund claim is rejected by this Court, the assessee who has already obtained any amount by way of refund shall be liable to pay back the same to the Department and the Department shall be entitled to recover the same in accordance with law.
(b) If the refund claim is rejected by an authority under the Act and where the assessee has already obtained the refund he shall be liable to pay back the said amount to the Department according to law and the Department shall be entitled to recover back the said amount, subject to orders, if any, by an Appellate Authority.
In view of the above clarification given by the Apex Court in term of Mafatlal’s case (supra), the refund application even in respect of “illegal levy” or amounts collected beyond the recoverable duty is required to be filed within the period of limitation prescribed under Section 11B of CE Act. Respectfully following the ratio of the Apex Court judgment, the order passed by the Commissioner (A) is set aside and the appeal is allowed.
(Pronounced in open Court on 17 Mar 2006)