ORDER
Ashok Agarwal, J.
1. I had by my order dated 22nd March, 1990 issued notice to AGIL for the purpose of determining whether or not AGIL had passed on the burden of the excess excise duty collected to its dealers. Prior to the passing of the said order, the respondents in their affidavit-in-reply had contended that the refund of the excess excise duty collected from the petitioners cannot be refunded to the petitioners as the petitioners have collected the same from their customers and if refund is ordered it would result in unjust enrichment. In a further affidavit dated 16th August, 1988 filed on behalf of the respondents, the said contention was reiterated. After the passing of my aforesaid order dated 22nd March, 1990 an affidavit dated 10th April, 1990 was filed on behalf of the petitioners whereunder it was averred that the respondents are not entitled to raise the plea of unjust enrichment because of the instructions issued by the Central Government in respect of unjust enrichment to sanction refund claims under the provisions of Section 11B of the Central Excises and Salt Act, 1944. It is submitted on behalf of the petitioners that the said instructions do not permit the adjudicating officers to deny refund on the ground of unjust enrichment when refund claims have filed under Section 11B of the Act. Miss Shah, the learned Counsel appearing on behalf of the respondents, has placed for my perusal a copy of the aforesaid instructions which are as follows:
On the issue of unjust enrichment in supersession to the said instructions you are directed to sanction refund claims in accordance with law and wherever admissible under the provisions of Section 11B of the Central Excises and Salt Act, 1944.
Miss Shah stated that in view of the aforesaid instructions, the respondents have not filed any reply to the affidavit of the petitioners dated 10th April, 1990. According to her, it would not be open to the department to agitate the question of unjust enrichment in view of the aforesaid instructions,
2. In response to the notice issued to AGIL they have filed the affidavit of Manharlal Manilal Kotak, the Company Secretary. The said affidavit reiterates the contention raised on behalf of the petitioners viz. that the inference drawn by the respondents that the excise duty charged on the product of the petitioners works out to about 20% of the total price and therefore a reasonable inference can be drawn that the said burden must have been transferred to its consumers, is fallacious. It is pointed out that 20% is the total excise duty levied and not the excess duty collected. The difference between the excise chargeable and the excise recovered works out to only 1.62%. It could, therefore, not be reasonable to conclude that AGIL, the sole distributors of the petitioners, must have passed on this burden to its consumers. The affidavit filed an behalf of AGIL further goes on to point out that the sale price fixed by it had no relevance to the excess excise collected. It had to be fixed in accordance with the price prevailing in the competitive market. It is further pointed out that AGIL has been giving trade discount of 2 to 4 per cent to its dealers. This was obviously to keep pace with the competitive market. The margin of profit fixed by AGIL was not a fixed percentage such as 10%, 15% or 20% but depended upon the prevailing market price. On calculations being made in retrospect it works out that AGIL were making a profit of between 12.65357 to 21.1333 per cent. It is submitted on behalf of AGIL that the above margin of profit, which has been worked out on arithmetical calculations, shows that there was no fixed margin of profit and the same depended upon the price prevailing in the competitive market. It is further submitted that since the excess excise duty is only 1.62 per cent the same could well be covered by the trade discount of 2 to 4 per cent which had been given by AGIL to its dealers. It is further pointed out that the excise duty charged works out to about 44 paise per sq. metre of photographic paper. Since as many as 200 passport size of photographs can be printed out on 1 sq. metre of photographic paper the burden of excess excise duty per passport print would work out to 0,22 paise which is less than 1 naya paise. It is, therefore, submitted that the department has failed to establish that the burden of the additional excise has been transferred by AGIL to its dealers and further by the dealers to the ultimate consumers.
3. Miss Shah the learned Counsel appearing on behalf of the respondents submitted that no affidavit in reply to the averments contained in the aforesaid affidavit dated 8th June, 1990 has been filed in view of the instructions referred to above.
4. The averments contained in the affidavit of AGIL dated 8th June, 1990 are not disputed. In my judgment the averments contained in the said affidavit are cogent and reliable. The only inference that can be drawn is that the respondents have tailed to establish that AGIL, the sole distributors of the petitioners, have passed on the burden to its dealers and the dealers in turn to the ultimate consumers. There is no dispute between the petitioners and AGIL and AGIL have not laid their claim in the present petition for refund of the excess excise duty charged by the respondents. AGIL however reserves its rights to raise the claim against the petitioners if so advised. Consequently, the petitioners are held to be entitled to the refund of the excess excise duty collected by the respondents.
5. Pursuant to my order dated 17th January, 1990 the respondents have deposited in Court a sum of Rs 1,25,34,988.97 P. (one crore twenty-five lakhs thirty four thousand nine hundred eighty-eight and paise ninetyseven only) and the same has been invested in fixed deposit in a nationalised bank. The petitioners will be entitled to the said amount along with the interest accrued thereon.
6. Rule is made absolute in the above terms.
In view of the facts and circumstances of this case, there shall be no order as to costs.
The Prothonotary to act upon the minutes of this order.