Assistant Collector of Customs and Ors. v. Anam Electrical Manufacturing Co. Etc

Heard the counsel for the parties.

So far as the question of levy of surcharge of ten percent which is in issue herein is concerned, we affirm the judgmen~ 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, (1996) 9 SCALE 457, 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 application for refund/appel- !ant 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.

The appeals are disposed of in the above terms. No costs.

-t. G.N. Appeals disposed of.

Pursuant to the directions given in Mafatlal Industries v. Union of India, (1996) 9 SCALE 457, 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/pm-chaser 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 without 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 Appellate Court/Civil Court/High Court shall be deemed to be unsus-tainable in law and such direction shall be set aside. The period prescribed J~

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 manufac-turer/purchaser shall be entitled to withdraw the writ petition, suit or an ;J 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 8hall apply even in cases where the High Court or Civil Court is ap-proached 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 applica-tion), the petitioner/plaintiff shall be entitled to \vithdraw such writ peti-tion/suit or any appeal arising the•efrom and prefer a refund claim under section ll(B) 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 n::::t 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 limitatior. 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 t~e 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 acco!dance 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 a11 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.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1805-10 of 1979.

WITH

Civil Appeal Nos. 18126 of 1979.

From the Judgment and Order dated 29.11.73 of the Madras High Court in W.P. No. 25-42170,137, 3631-34 of 1971.

AND Civil Appeal Nos. 1503-1519 of 1978.

From the Judgment and Order dated 13.3.74 of the Madras High Court in W.P. Nos. 117-32 of 1974.

K.N. Bhat, Additional Solicitor General, G. Prakash and C.V. Subba Rao for the Appellants.

D. Ramakrishna Reddy, A.V.V. Nair and S.K. Mehta for the Respondents.