Full Judgment
2. Appellant is engaged in the manufacture of patent or proprietary medicines falling under erstwhile T.I. 14E. Appellant filed price list claiming deduction of certain expenses. Assistant Collector by order dated 8-7-1981 rejected the price list as he found that the deductions were inadmissible. This order was challenged by the appellant before the High Court of Madras by a Writ Petition. The High Court ultimately directed the Assistant Collector to decide the controversy on the basis of the judgment of the Supreme Court in Bombay Tyre International case, 1983 (14) E.L.T. 1896 (SC). The Assistant Collector called for information from the appellant regarding various deductions and the details thereof. Appellant submitted the actual expenses in regard to each item for the years 1981-82 and 1982-83 but did not submit such details regarding 1983-84. The Assistant Collector by his Order-in-Original dated 13-8-1984 allowed deduction for freight, insurance and duty element from the wholesale price for the first two years and gave deduction only for duty element for 1983-84 on the ground that the actual figures have not been submitted by the appellant. Appellant paid the amount demanded in three instalments and thereafter filed refund claim on 9-5-1985 for the amount of duty element on freight and insurance expenses. Assistant Collector rejected the refund claim on the ground that the claim was inadmissible since the remedy of the appellant was to file an appeal against the Order-in-Original passed by him and also on the ground that refund claim was barred by time. In appeal, the Collector (Appeals) held the refund claim was not barred by time but agreed with the view of the Assistant Collector that refund claim was not the proper remedy.
Accordingly he confirmed the order passed by the Assistant Collector.
Hence the present appeal.
3. From what we have indicated above, it is evident that the Assistant Collector by an appealable order disallowed deduction for freight and insurance element of the wholesale price. Appellant undoubtedly could have challenged this order-in-appeal. Instead of doing so appellant filed refund claim. The question is whether the remedy of refund claim was barred and the only remedy available the appellant was to file an appeal. This question has been answered in favour of the assessee by the High Court of Calcutta in I.T.C. Limited and Anr. v. Union of India and Ors. - 1988 (34) E.L.T. 473 (Cal.). The High Court held that under the scheme of the Act Section 11A is provided as a substantive provision and a complete code for realisation of duty in case of short levy or short payment and Section 11B is provided as substantive provision for refund of any excess duty paid, which is also a complete code for the same. The twin sections were introduced in the interest of the Revenue as well as the assessee and there is no condition precedent or restriction in the matter of exercise of powers under Sections HA or 11B of the Act. Any other view would render Section 11B completely nugatory and unworkable and consequently render the provision in Section HA also nugatory and unworkable. High Court further pointed out that the provisions in Section 35A or 35EE neither override the provisions of Section HA or 11B nor it could be said that the latter provisions were machinery provisions which could not be invoked independently.
4. For the reasons indicated above, we hold that the rejection of refund claim was unlawful. The case is remanded to the jurisdictional Assistant Collector for consideration of the refund claim on merits.