Raymond Woollen Mills Ltd., a Company Incorporated Under the Companies Act, 1956 Vs. the Union of India (Uoi) and the Assistant Collector of Central Excise, Thane-ii Division - Court Judgment

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refund (c. excise) - claim--rejected on three counts--(i) barred by law of limitation, (ii) non-maintenance of record under rule 173-l(2) of cer, 1944; (iii) absence of evidence in support of their claim--the findings arrived at on the point of bar of limitation, i.e. being not within the period of six months from the date of return of the goods to the factory with reference to the provisions of rule 173-l of the said rules, therefore, cannot be sustained and are liable to be set aside. the provisions contained in section 11-b are retrospective in nature, and apply to all the proceedings where the refund has not been made finally and unconditionally. hence, the provisions of section 11-b of the said act are clearly applicable to the matter in issue and in that regard, no fault can be found with the impugned order.;refund (c. excise) - unjust enrichment--mere application even if it is supported by a statement on oath by the claimant cannot substitute the necessary evidence of unjust enrichment to the claim of the applicant for refund of the duty. - - the same were filed during the period from april, 1979 to february, 1981 in relation to the goods which were returned during the period from february, 1978 to september, 1978. 4. by the show cause notice dated 14th october, 1981 issued by the superintendent of central excise, the petitioners were called upon to show cause as to why the said applications for refund should not be rejected as they had failed to render the accounts under rule 173l(2) of the said rules within a period of six months from the date of return of the said goods to the factory. that the applications were filed beyond the period of six months from the date of return of the goods and even after the expiry of six months from the date of processes carried out on payment of duty, and secondly that the petitioners had failed to furnish any documentary evidence in support of their claim that they had not recovered the amount of duty from the persons who had rejected the original materials. union of india (supra), has submitted that the law on the point of applicability of the provisions of section 11b of the said act to the pending claim being well settled by the said decision, no fault could be found with the impugned order in the absence of necessary evidence being placed by the petitioners before the authorities regarding non-receipt of the amount of duty from the purchasers of the goods. - we think that the leaned judicial commissioner was clearly in error in holding that no manifest injustice resulted from the order of the respondent conveyed in his letter dated march 24, 1955. by that order the respondent virtually refused to carry out the directions which a superior tribunal had given to him in exercise of its appellate powers in respect of an order of assessment made by him. 2 has clearly acted in excess of its jurisdiction, inasmuch as that the said finding has been arrived at contrary to the specific directions given by the cegate in its order dated 27th december, 1993 whereby it was directed to decide the matter without considering the objections regarding the non-submissions of the accounts within the period of six months. much after the day of 20th september, 1991. hence the provisions of section 11b of the said act are clearly applicable to the matter in issue, and in that regard, no fault can be found with the impugned order. sub-section (1) of section 11b of the said act, in fact, clearly provides that 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 in such form as may be prescribed and the application shall be accompanied by such documentary or other evidence, including the documents referred to in section 12a, as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person. the burden clearly lies on the applicant and the onus does not shift till and until the said burden is discharged. 14. it is sought to be contended on behalf of the petitioners that the petitioners had clearly stated on oath that they had not recovered the duty from the person who had rejected the materials. the statutory provisions contained in section 11b(1) of the said act clearly requires the documentary evidence or other evidence to be accompanied by the applicant for claim of refund and it apparently discloses that a mere application even if it is supported b y a statement on oath by the claimant cannot substitute the necessary evidence of unjust enrichment to the claim of the applicant for refund of the duty. the provisions of law contained in section 11b clearly discourage the unjust enrichment. rajiv kumar, reported in (2002)iiillj1111sc ,has clearly ruled that a mere statement on oath by the interested party cannot be regarded as sufficient evidence to arrive att eh conclusion regarding the claim of the party. apparently, there was no proof placed before the authority by the petitioners to discharge their burden which was otherwise required to be discharged in terms of section 11b of the said act in support of heir claim for refund and, therefore, no fault can be found with the findings of the authority that the petitioners have failed to establish the claim for refund. since the assessees have failed to discharge their burden, the assessing officer was justified in rejecting the refund claim of the petitioners. 16. even though the rejection of the applications for refund by applying the period of limitation under rule 173l could not be sustained, nevertheless, on account of the failure of the petitioners to produce necessary documentary evidence in support of their claim for refund as required under section 11b of the said act, the impugned order does not warrant any interference in writ jurisdiction.r.m.s. khandeparkar, j.1. heard the learned advocates for the parties and perused the records.2. the petitioners challenge the order dated 28th april, 1994 passed by the respondent no. 2 rejecting the refund claim made by the petitioners. the refund claim has been rejected on three counts, firstly that the same was bared by law of limitation, secondly that the petitioners did not maintain any record of the processes to which the goods were subjected after they were returned to the factory as was otherwise required to be maintained under rule 173 l(2) of the central excise rules, 1944, (hereinafter called as 'the said rules'), and thirdly that the petitioners did not furnish any evidence in support of their claim that they had not recovered the amount of duty from the persons to whom the materials were originally sold and who had returned the same.3. the petitioners are carrying on the business, inter alia, as the manufacture of woollen fabrics and for that purpose they have their factory at jekagram, thane. the woollen fabrics manufactured for the relevant period were cleared on payment of excise duty. however, certain quantity of the products was found defective by the purchasers of those products and the same was returned to the petitioners. the returned goods were reprocessed to rectify defects, and pursuant thereto, they were cleared on payment of excise duty. the petitioners, therefore, filed nine applications for refund of the excise duty which was paid on the original clearance of the said products. the same were filed during the period from april, 1979 to february, 1981 in relation to the goods which were returned during the period from february, 1978 to september, 1978.4. by the show cause notice dated 14th october, 1981 issued by the superintendent of central excise, the petitioners were called upon to show cause as to why the said applications for refund should not be rejected as they had failed to render the accounts under rule 173l(2) of the said rules within a period of six months from the date of return of the said goods to the factory. thereafter, by an order dated 28th november, 1981, all the nine applications came to be rejected by the assistant collector of central excise.5. being aggrieved, the petitioners preferred the appeal to the collector of central excise (appeals), bombay, and the same was dismissed upholding the order dated 28th november, 1981. the petitioners carried the matter in appeal to the cegat. by the order dated 27th december, 1993, the cegat set aside the order of the collector of central excise (appeals) and remanded the matter to the respondent no. 2 for re-examination of the refund claim on merits without raising any objection as to the non-submissions of the accounts within a period of six months.6. on remand, a show cause notice dated 13th april, 1994 came to be issued by the superintendent of central excise calling upon the petitioners to show cause as to why the said nine applications should not be rejected on the ground that the refund claim was barred by the provisions of law in terms of section 11b(1) read with explanation (b)(b) to section 11b of the central excises and salt act, 1944 (hereinafter called as 'the said act') and on the ground of unjust enrichment as the conditions laid down in proviso (d) to sub-section (2) of section 11b of the said act had not been fulfilled.7. the respondent no. 2 by the impugned order dated 28th april, 1994 rejected the said nine refund applications ton two grounds, viz. that the applications were filed beyond the period of six months from the date of return of the goods and even after the expiry of six months from the date of processes carried out on payment of duty, and secondly that the petitioners had failed to furnish any documentary evidence in support of their claim that they had not recovered the amount of duty from the persons who had rejected the original materials. hence, the present petition.8. though the challenge in the present petition also includes the challenge to the provisions of law contained in section 11b, the learned advocate for the petitioners has candidly submitted that the said challenge no more survives in view of the decision of the apex court in the matter of mafatlal industries ltd. and ors. v. union of india and ors., reported in : 1997(89)elt247(sc) .9. the impugned order is however sought to be challenged on three grounds, viz. that the respondent no. 2 could not have rejected the claim on the point of bar of limitation as the cegate in its remand order had specifically directed the respondent no. 2 to examine the refund claims without raising any objection as to the non submissions of the accounts within a period of six months and thereby not to reject the claims on the basis of limitation of six months prescribed under rule 173l and hence the respondent no. 2 could not have even addressed to the said issue and under no stretch of imagination could have rejected the claim for refund on the said ground. the reliance is placed in the decision of the apex court in that regard in the matter of bhopal sugar industries v. ito, bhopal, reported in : [1960]40itr618(sc) . secondly that the refund relates to the period 1978-79 whereas, the provisions of law contained in section 11b(2) of the said act came into force with effect from september, 1991, and, therefore, the refund claim could not have rejected retrospectively applying the provisions of section 11b(2) to the claim for refund made by the petitioners. the provisions for limitation being in relm of procedural law, they cannot be made retrospectively applicable and for that purpose, reliance is sought to be placed in the decision of the division bench of this court in the matter of uttam steel ltd. v. union of india, reported in : 2003ecr898(bombay) . thirdly, the period of six months prescribed under the rule 173l of the said rules cannot be construed to be a mandatory provision, and on that count, the refund claims could not have been rejected. while seriously disputing the contention sought to be raised on behalf of the petitioners, the learned advocate for the respondents placing reliance in the decision of the apex court in mafatlal industries ltd. v. union of india (supra), has submitted that the law on the point of applicability of the provisions of section 11b of the said act to the pending claim being well settled by the said decision, no fault could be found with the impugned order in the absence of necessary evidence being placed by the petitioners before the authorities regarding non-receipt of the amount of duty from the purchasers of the goods. as regards the provisions contained in rule 173l relating to submissions of the accounts, placing reliance in the decision of the gujarat high court in alembic glass ind. ltd. v. union of india, reported in : 1992(60)elt64(guj) , it is sought to be contended on behalf of the respondents that the provision in that regard is not a rule of technical formalities and, therefore, the provisions in relation to the limitation prescribed therein are to be construed strictly.10. it is a matter of record that the cegat in its judgment dated 27th december, 1993 had remanded the matter to the respondent no. 2 to examine the refund claims on merits with a rider that the same should be 'without raising any objection as to the non-submissions of the accounts within a period of six months'. in other words, as rightly submitted by the learned advocate for the petitioners, the point relating to the non-submissions of the accounts within a period of six months in terms of rule 173l(2) of the said rules was concluded between the parties by the said judgment and in favour of the petitioners. hence, it was not open for the respondent no. 2 to deal with the said issue while deciding the matter. the apex court in bhopal sugar industries case (supra) was dealing with the matter wherein the income-tax officer had refused to carry out the clear and unambiguous directions which the income-tax appellate tribunal had given to him in respect of an order of the assessment made by him and yet the learned judicial commissioner of bhopal had refused to interfere in the order of the income-tax officer. the apex court therein had held that:-'we think that the leaned judicial commissioner was clearly in error in holding that no manifest injustice resulted from the order of the respondent conveyed in his letter dated march 24, 1955. by that order the respondent virtually refused to carry out the directions which a superior tribunal had given to him in exercise of its appellate powers in respect of an order of assessment made by him. such refusal is in effect a denial of justice, and is furthermore destructive of one of the basic principles in the administration of justice based as it is in this country on a hierarchy of courts. if a subordinate tribunal refuses to carry out directions given to it by a superior tribunal in the exercise of its appellate powers, the result will be chaos in the administration of justice and we have indeed found it very difficult to appreciate the process of reasoning by which the learned judicial commissioner while roundly condemning the respondent for refusing to carry out the directions of the superior tribunal, yet held that no manifest injustice resulted from such refusal.'11. undisputedly, in the case in hand, the cegate was dealing with the matter in the exercise of its powers in the appellate jurisdiction under section 35 of the said act while issuing the remand order and the directions thereunder. it was within the jurisdiction of the cegate to issue such directions and the respondent no. 2 was, infact, exercising the jurisdiction to decide the matter consequent to the said remand order. apparently, therefore, the jurisdiction of the respondent no. 2 to adjudicate upon the refund claims was subject to the restrictions imposed in the remand order and the respondent no. 2 could not have travelled beyond the scope of adjudication restricted by the said remand order. indeed, by adjudicating the issue in relation to the non-submissions of the accounts within a period of six months in terms of rule 173l(2) of the said rules and therefore holding the claim to be barred by law of limitation, the respondent no. 2 has clearly acted in excess of its jurisdiction, inasmuch as that the said finding has been arrived at contrary to the specific directions given by the cegate in its order dated 27th december, 1993 whereby it was directed to decide the matter without considering the objections regarding the non-submissions of the accounts within the period of six months. the findings arrived at on the point of bar of limitation, i.e. being not within the period of six months from the date of return of the goods to the factory with reference to the provisions of rule 173l of the said rules, therefore, cannot be sustained and are liable to be set aside.12. as regards the second ground of challenge, the apex court in mafatlal sugar industries case (supra) has in no uncertain terms held that the provisions contained in section 11b are retrospective in nature, inasmuch as that they apply to all the proceedings where the refund has not been made finally and unconditionally. in the case in hand, it is not in dispute that even after the enforcement of section 11b, the claims for refund were not finally adjudicated and it was pending for a long time and infact the order of the cegate was passed on 27th december, 1993 much after the enforcement of the provisions of law contained in section 11b of the said act had come into force i.e. much after the day of 20th september, 1991. hence the provisions of section 11b of the said act are clearly applicable to the matter in issue, and in that regard, no fault can be found with the impugned order.13. as regards the claim of unjust enrichment, in terms of section 11(1)(b), it is necessary for the persons claiming refund to establish that the incidence of duty has not been passed on by him to any other person and the same shall primarily be established by the documentary evidence, except in cases where it is impossible to produce the documentary evidence, and in such cases some other evidence can be led. sub-section (1) of section 11b of the said act, in fact, clearly provides that 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 in such form as may be prescribed and the application shall be accompanied by such documentary or other evidence, including the documents referred to in section 12a, as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person. further, in terms of clause (d) to proviso of sub-section (2) of section 11b of the said act, the adjudicating authority is empowered to reject the claim of the applicant, if it is found that the applicant had not passed on the incidence of such duty to any other person. the law on the point therefore specifically provides that a person approaching the authorities with a claim for refund under the said act or the said rules has to establish the same primarily with the documentary evidence, and in case of impossibility of furnishing any documentary evidence, he is required to produce some other evidence in that regard. the incidence of such duty paid by him should not be passed on by him to any other person to justify the claim for refund. the burden clearly lies on the applicant and the onus does not shift till and until the said burden is discharged.14. it is sought to be contended on behalf of the petitioners that the petitioners had clearly stated on oath that they had not recovered the duty from the person who had rejected the materials. certainly, a mere statement of the petitioners in that regard can be of no help to the petitioners. the statutory provisions contained in section 11b(1) of the said act clearly requires the documentary evidence or other evidence to be accompanied by the applicant for claim of refund and it apparently discloses that a mere application even if it is supported b y a statement on oath by the claimant cannot substitute the necessary evidence of unjust enrichment to the claim of the applicant for refund of the duty. the provisions of law contained in section 11b clearly discourage the unjust enrichment. allowing the persons to claim refund merely on the basis of a statement by such person that he had not collected the duty from any other person would virtually amount to render the provisions of law contained therein nugatory and will defeat the very purpose behind the said provision of law. besides, the apex court in range forest officer v. s.t. hadimani, reported in : (2002)illj1053sc followed in essen deinki v. rajiv kumar, reported in : (2002)iiillj1111sc , has clearly ruled that a mere statement on oath by the interested party cannot be regarded as sufficient evidence to arrive att eh conclusion regarding the claim of the party. mere statement on oath of the claimant, and for that matter any interested party cannot substitute the proof which is otherwise required under the law to substantiate the claim of such party. besides, when the law requires a thing to be done in a particular manner, the thing should be done in that manner itself. if the law requires documentary proof regarding non-collection of duty from the third party, it should be primarily established by following the said mode prescribed by the law. therefore, the statement of the petitioners that they had not collected the amount of duty from the person who had rejected the product cannot substitute the proof in support of their claim. apparently, there was no proof placed before the authority by the petitioners to discharge their burden which was otherwise required to be discharged in terms of section 11b of the said act in support of heir claim for refund and, therefore, no fault can be found with the findings of the authority that the petitioners have failed to establish the claim for refund.15. the contention of the petitioners that double duty has been recovered on the said goods cannot be accepted. at the time of clearance of the reprocessed goods whether excise duty was payable or not is not an issue raised in this petition. the only question required to be considered is whether the petitioners discharged their burden and established that the excise duty collected at the time of first clearance has not been passed on to the customer. since the assessees have failed to discharge their burden, the assessing officer was justified in rejecting the refund claim of the petitioners.16. even though the rejection of the applications for refund by applying the period of limitation under rule 173l could not be sustained, nevertheless, on account of the failure of the petitioners to produce necessary documentary evidence in support of their claim for refund as required under section 11b of the said act, the impugned order does not warrant any interference in writ jurisdiction. in view of what is stated hereinabove, it is not necessary to deal with the third ground of challenge nor it is necessary to refer to other decisions sought to be relied upon by the parties.17. in the result, therefore, the petition fails and is dismissed accordingly. rule is discharged with no order as to costs.