ORDER
A.C.C. Unni, Member (J)
1. In this Appeal the appellants are challenging the Order-in-Appeal, dated 20-12-1996 passed by the Commissioner of Customs and Central Excise (Appeals), Trichy by which the appellant’s refund claim of Rs. 4,97,101.01 in seven Appeals was rejected by the Collector. The matter relates to the payment of refund of duty claimed by the appellants and the question of unjust enrichment and interpretation of Section 11B of the Central Excise Act, 1944 in the light of the decision of the Apex Court in Mafatlal Industries Limited v. Union of India reported in 1997 (89) E.L.T. 247 (S.C.).
2. Briefly the facts leading to the present dispute are as under :-
By his Order Nos. 7/96 and 13/96, the Assistant Commissioner, Trichy rejected the appellants’ refund claim of excise duty on the ground that they had passed on the incidence of duty to their customers. The Assistant Commissioner accordingly, directed the crediting of the refund amount to the Consumer Welfare Fund established under Section 12C of the Central Excise Act. The refund claim related to the period from 1-6-1972 to 15-3-1976 for an amount of duty paid by the appellants under protest for a portion of the value representing equalised freight. Earlier, the Assistant Commissioner by his order dated 16-10-1979 had rejected their claim which was later upheld by the Collector (Appeals) by his Order on 1-12-1980. However, in appeal the Tribunal allowed the appeal by Order dated 6-6-1989. The Departmental authorities were also directed by the Tribunal to ensure expeditious steps to grant consequential refund to the party. According to the Appellants the Department did not sanction the refund in spite of repeated requests from them. Instead, the Assistant Commissioner directed the credit of the amount to the Consumer Welfare Fund applying the amended provisions of Section 11B relying on the judgment of the Apex Court in Union of India v. Jain Spinners Limited – 1992 (61) E.L.T. 321 (S.C). In their appeal before the Commissioner (Appeals) the appellants contended that the Assistant Commissioner was bound to sanction the refund to the appellants consequent upon the order of the Tribunal dated 6-6-1989 and that there was no need for filing of application by the appellants for receiving the same in terms of Section 11B(3) of the Act as it stood at the relevant time. They also contended that the decision in Union of India v. Jain Spinners Ltd., supra, was not attracted since there was no refund claim pending on the date when the amendment came into force. Applying the ratio in Jain Spinners case, supra, the Commissioner (Appeals) declined to interfere with the order of the Assistant Commissioner rejecting the refund claim though, the Commissioner (Appeals) agreed with the appellant’s contention that the Assistant Commissioner ought to have taken steps for sanctioning the refund amount within a reasonable time consequent upon the order passed by the Tribunal.
3. Shri Shanti Bhushan, ld. Sr. Counsel appeared for the appellants and Shri P.K. Jain, ld. SDR, appeared for the Department.
4. The ld. Sr. Counsel after narrating the facts of the case submitted that the point at issue is now clearly covered by the decision of the Apex Court in the case of Mafatlal Industries Ltd. v. Union of India, supra. He drew our attention to Section 11B as it stood before it was amended by Act No. 40 of 1991 which related to the period in question :-
“11B. Claim for refund of duty. – (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date:
Provided that the limitation of six months shall not apply where any duty has been paid under protest.
(2) If on receipt of any such application, the Assistant Collector of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant should be refunded to him, he may make an order accordingly-
(3) Whereas a result of any order passed in appeal or revision under this Act refund of any duty of excise becomes due to any person, the Assistant Collector of Central Excise may refund the amount to such person without his having to make any claim in that behalf.
(4) Save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be entertained.
(5) Notwithstanding anything contained in any other law, the provisions of this section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in respect of which such amount was collected were not excisable or were entitled to exemption from duty and no Court shall have any jurisdiction in respect of such claim.
Explanation. – For the purpose of this Section….
(B) ‘relevant date’ means –
(f) in any other case, the date of payment of duty.”
5. Ld. Sr. Counsel submitted that the Apex Court had in paragraph 87 of its judgment considered the question of retrospective operation of Section 11B. Explaining the provisions of Sub-sections (2) and (3) of Section 11B before its amendment in 1991 and the first proviso to Sub-section (1) after its amendment in 1991, the Apex Court had held that there was no doubt that Sub-sections (1) and (2) of Section 11B would apply to pending proceedings. Ld. Sr. Counsel, however, drew attention to the further observations of the Hon’ble Apex Court clarifying what was meant by “pending proceedings”. According to the ld. Counsel pending proceedings were proceedings where the refund claim had not been decided finally and unconditionally. Explaining the legal position the ld. Sr. Counsel submitted that where refund proceedings had h finally decided in the sense that the period prescribed for filing the against such order had expired before the commencement of the 1991 amendment, they cannot be governed by the Section 11B(3) as amended by the Act No. 40 of 1991. It was further submitted that in the instant case the admitted factual position was that the Tribunal had by its order dated 6-6-1989 allowed the refund claim of the appellants and had directed the Departmental authorities to ensure expeditious steps to grant refund to the appellants. The Departmental authorities, however, did not act upon the said direction of the Tribunal and had subsequently invoked the provisions of Section 11B as amended by the amending Act No. 40 of 1991 which provided that notwithstanding anything contained in any judgment/decree/order or directionof the Tribunal or any Court or any other provisions of the Act/Rules or any other law for the time being in force, no refund shall be made except in’ accordance with Sub-section (2) of Section 11B as amended. The provision had made it mandatory for any person claiming refund to make an application to the Assistant Collector within six months from the relevant date and the relevant date had been defined in Explanation to the said Section. There was no dispute in the instant case that it was clause (f) of Explanation which applied to the facts of the present case, and the relevant date was the date of payment of duty. Ld. Sr. Counsel drew attention to paragraph 146 of the Apex Court judgment in Mafatlal Industries Limited supra, dealing with the question of application for refund made before the commencement of the 1991 amendment to Section 11B. Relying on the observations of the Apex Court, it was contented that applications for refund made before the commencement of the 1991 amendment would be governed by the provisions of Section 11B(1) as it stood at the relevant time and was to be dealt with in accordance with Section 11B(2). For purposes of deciding the need for filing refund applications by a claimant within the specified period, refund order by a statutory authority like the Tribunal which had become final, as in the present case, cannot be deemed to be pending appeals. As the Department had not filed any appeal against the order of refund passed by the Tribunal on 6-6-1989 mere delay or refusal on the part of the administrative authorities in carrying out the order of the Tribunal cannot be construed to mean that the application for refund is still pending. Ld. Sr. Counsel maintained that the administrative authorities had no option but to give effect to the order by taking the necessary administrative steps for making the refund to the appellants. The question of eligibility for refund had already been decided by the Tribunal and the fact that the refund had not been granted will not make it a pending proceeding. He further submitted that the issue has been very clearly explained by the Hon’ble Apex Court in paragraph 146 of the Mafatlal Industries Ltd. judgment, supra. He, therefore submitted that the Department had wrongfully delayed the payment of the refund amount in spite of the direction of the Tribunal by its order dated 6-6-1989. This cannot give the Deptt. a right to claim that the refund claim was still pending on the date of commencement of the 1991 amendment. He also submitted that Commissioner (Appeals) had by the impugned order wrongfully decided the issue against the present appellants by holding that their refund claim was still pending on the date when the amended provision came into force. He, accordingly, pleaded for the setting aside of the impugned order.
6. Ld. SDR, Shri P.K. Jain, appearing for the Respondent Commissioner defended the impugned order and contended that the question of refund of the amount was still pending with the Department when Section 11B was amended in 1991 by virtue of which the Assistant Commissioner was bound to direct the crediting of the refund amount to the Consumer Welfare Fund and, therefore, the appellants were rightly denied their claim for refund of the amount and that the impugned order was legally and factually free from any infirmity. He drew attention to the various observations in the Apex Court decision in Mafatlal Industries Limited, supra, to contend that the provisions of Section 11B after its amendment in 1991 was applicable to the facts of the present case. He drew attention to paragraph 49 of the impugned order in which reference has been made to the case of Union of India v. ITC reported in 1993 (67) E.L.T. 3 (S.C.) in which the Apex Court had observed that the amended Section 11B would apply to all pending cases including those pending in appeal before the Apex Court. Further, referring to rationale in enacting the provisions of Section 11B, he referred to the observations of the Apex Court in paragraph 69 of the Mafatlal Industries Limited, supra, wherein the Apex Court had observed that the concept of economic justice means and demands that unless the claimant establishes that he had not passed on the burden of the duty/tax to others, he had no justification for claiming refund. He also referred to the observations of the Hon’ble Apex Court in paragraph 82 of the said order in which the Court had stated that there was no room for making any exception in the case of refund claims arising as a result of a decision in appeal, reference or writ petition. He also drew attention to paragraph 99 of the Apex Court judgment holding that the doctrine of unjust enrichment was not a new doctrine and there was no illegality in making the doctrine applicable to pending proceedings. Ld. SDR submitted that the law relating to unjust enrichment had been upheld by the Hon’ble Apex Court even before the 1991 amendment was made. He referred to the following judgments of the Apex Court in support of his contention:
(1) State of Madhya Pradesh v. Vyankat Lal and Ors., AIR 1985 SC 901;
(2) Kewal Krishanv. State of Punjab, AIR 1980 SC 1035;
(3) Amur Nath Om Parkash and Ors. v. State of Punjab and Ors., AIR 1985 SC 218; and
(4) Himalaya House Co. Ltd. v. CCRA and Anr., AIR 1972 SC 902.
7. We have considered the submissions and have perused the case law relied on by the parties. The admitted factual position in the case before us is that the present appellants had obtained an order allowing refund of Rs. 4,97,101.01 by Order No. 222/89, dated 6-6-1989 passed by the Tribunal. No appeal had been filed against the said order. The said order had thus become final. The Department had not implemented the order of the Tribunal when the amendment to the Central Excises and Salt Act was enacted with effect from 20-9-1991 which “made it obligatory on the Department to credit all refund amounts to the Consumer Welfare Fund. The said amendment also applies to all pending cases of refund. Whereas the appellant’s contention that the amended provisions did not apply to their case, the Department has contended that since the refund had not yet been effected, the matter was still pending as on 20-9-1991 and, therefore, the amended provisions would apply. The question really boils down to whether the non-payment of the refund claim which had been adjudicated in favour of the appellants would make it a pending proceeding. We find force in the ld. Sr. Counsel’s arguments that delay in execution of a judicial/quasi-judicial order by an administrative authority cannot be make it a pending proceeding. The non obstante clause in Sub-section (3) of [Section] 11B directing that no refund shall be made except as provided in Sub-section (2) and the further provision that it will apply to all proceedings pending on the date of coming into force of 1991 amendment cannot, in the vary nature of things, in our view, cover a case of the type before us. The observations in the majority judgment of the Apex Court in Mafatlal Industries case, supra, brings out the position very clearly. We extract paragraph 146 which specifically covers the question before us :
“146. As stated, Section 11B(2) and Section 11B(3) go together. The applications for refund made before the commencement of the Amendment Act, 1991, shall be deemed to have been made under Section 11B(1) of the Act as amended and it shall be dealt with in accordance with Section 11B(2) of the Act. The Section contemplates disposal of the applications pending on the date of the Amendment Act as also fresh applications filed after the Amendment Act, 1991, as per the amended provisions. Counsel for the assessees urged that the provisions relating to refund and, in particular, Sections 11B(2) and (3) as amended in 1991 cannot apply to :-
1. ‘Refund’ made or due as per orders passed by Courts, in a suit or in a petition under Article 226 of the Constitution of India, which have become final.
2. Refunds ordered by the statutory authority concerned which have become final.
It is obvious that in such cases no application can or will be deemed to be pending on the date of the commencement of the Amendment Act. No application praying for refund is to be filed in such cases, either. No further probe, regarding the requisites for obtaining refund specified in the Amendment Act, 1991, is called for in such cases. The above aspects are fairly clear. Sections 11B(2) and (3) cannot be made applicable to refunds already ordered by the Court or the refund ordered by the statutory authorities, which have become final. It follows from a plain reading of Section 11B, Clauses (1), (2) and (3) of the Act. The provisions contemplate the pendency of the application on the date of the coming into force of the Amendment Act or the filing of an application which is contemplated under law, to obtain a refund, after the Amendment Act comes into force. I am of the opinion, that if the said provisions are held applicable, even to matters concluded by the judgments or final orders of Courts, it amounts to stating that the decision of the Court shall not be binding and will result in reversing or nullifying the decision made in exercise of the judicial power. The legislature does not possess such power. The Court’s decision must always bind parties unless the condition on which it is passed are so fundamentally altered that the decision could not have been given in the altered circumstances. It is not so herein. [Shri Prithvi Cotton Mills Ltd. and Anr. v. Broach Borough Municipality and Ors. [1970 (1) SCR 388] and Madan Mohan Pathak v. Union of India and Ors. etc. [1978 (3) SCR 334]. See also Comorin Match Industries (P) Ltd. v. State of Tamil Nadu JT 1996 (5) SC 167. Alternatively, it may be stated that duty paid in cases, which finally ended in orders or decrees or judgments of Courts, must be deemed to have been paid under protest and the procedure and limitation etc. stated in Section 11B(2) read with Section 11B(3) will not apply to such cases. It need hardly be stated, that Section 11B(1), the proviso thereto, Section 11B(2) and Section 11B(3) read together will apply only to (1) refund applications made before the Amendment of the Act and still pending on the date of commencement of Amendment Act, 1991 and (2) applications contemplated under law to obtain refund and filed after the commencement of the Amendment Act, 1991. (Cases dealt within Paras 5 and 29 of this judgment will not be covered by the above, to the extent stated therein).”
8. Having regard to the legal position as explained in the aforesaid paragraph, we hold that the impugned order cannot be sustained in law. The same is as a result set aside and the present appeal allowed with consequential benefits to the appellants.