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Tuesday, September 15, 2015

Section 35G(3) of the Central Excise Act, 1944 (hereinafter referred to as the 'Act'),“Whether Section 11B of the Central Excise Act, as amended, applies to cases where though an order has been passed directing refund, implementation of the order is pending?”= In the first instance, it requires to be remarked that only after amendment in Section 11B of the Act in the year 1991, any person applying for refund has to establish that incidence of such duty has not been passed on by him to any other person. The unamended provision did not contain any such stipulation. Therefore, under the old provision, the only obligation of the person claiming refund was to make such an application before the expiry of six months from the relevant date and to show how the refund was admissible to the applicant. In such a case, the Assistant Collector of Central Excise was to only examine as to whether excise duty was paid in excess etc. and was refundable to the claimant as a result of adjudication of the dispute or otherwise. It is only in the amended provision that additional stipulation is provided as per which the claimant is required to file, along with application for refund, such documentary or other evidence including documents referred to any Section 12A of the Act to establish that the amount of duty of excise was collected from the claimant or paid by the claimant and that “incidence of such duty had not been passed on by him to any other person”. It clearly follows from the above that before the amendment of Section 11B of the Act, principle of unjust enrichment was not incorporated under the unamended provision. In fact that was precisely the reason for amending the provision so that this doctrine of “unjust enrichment” is incorporated, viz., to take care of the mischief that was prevailing under the unamended provision which was removed by making amendment, popularly known as Heydon's Mischief Rule. Proviso to sub-section (1) of Section 11B, as amended, would be applicable in a situation where an application for refund made before the said amendment was still pending at the time when the provisions of Section 11B were amended. This is how the said proviso is interpreted by this Court in Mafatlal Industries Ltd. (supra). Once we find that no such application was pending and the orders on the said application had already been passed, the proviso ceases to have any application. The reason, even otherwise, is very obvious. Section 11B relates to claim for refund of duty and the procedure for such a refund is stipulated in this section. As per sub-section (1) thereof, any person claiming refund of any duty of excise has to move an application for refund of such duty to the Assistant Commissioner of Central Excise. Once such an application is made, the same is to be considered in accordance with this provision. As already pointed out above, under the unamended provision, the Assistant Commissioner was not required to go into the question as to whether incidence of such duty had been passed on by the applicant claiming refund to any other person or not. However, if the application was not decided till the time amendment was incorporated in the year 1991, as per the proviso, while dealing with such an application for refund, the Assistant Commissioner is still empowered to go into this question even when the application was filed before the commencement of the amended provision. This situation would prevail only when there is a pending application before the Assistant Commissioner of Central Excise, which is yet to be decided. If the order for refund on such an application had already been passed before coming into force the amended provision and no application was pending at the commencement of the Central Excise and Customs Laws (Amendment) Act, 1991 before the Assistant Commissioner and, therefore, question of applying the said proviso and going into the issue as to whether incidence of such duty had been passed by the applicant to any other person or not would not arise. Thereafter, order passed on the application is only to be implemented by giving the refund as per that order. By no stretch of imagination, the Officer, at the time of carrying out the orders for refund, which have already been passed, can be invested with the powers to go into the question of unjust enrichment by invoking the proviso to sub-section (1) of Section 11B. In the instant case, the order on the refund application of the respondent had been passed on 06.06.1989, which was much before the amended provision came into operation. In fact, even after the order of refund was passed, the appellant had not refunded the amount and it is in these circumstances that writ petition was filed in the High Court for initiation of contempt proceedings against the defaulting officers. In such proceedings, the High Court had passed the order dated 18.07.1995. In this order, no doubt, the Court observed that the Assistant Commissioner would go into the question if the respondent should be granted the refund in spite of Section 11B of the Act. However, merely because of such observations, it cannot be said that the Assistant Commissioner was entitled to look into the issue of unjust enrichment when if, otherwise, he he was otherwise had no jurisdiction to do so in the facts of the present case. Such observations were given in view of the statement of the counsel for the Government who brought to the notice of the Court the amended provisions contained in sub- section (3) of Section 11B of the Act. The High Court did not go into the issue as to whether such a course of action was permissible or not. Another pertinent aspect which needs to be kept in mind is that the interpretation that is to be accorded to the amended provision had not been decided by this Court till that time and the law on this issue came to be settled in the year 1997 only when the judgment in Mafatlal Industries Ltd. (supra) was pronounced by this Court. Thus, when the order of the Assistant Commissioner was challenged and the matter came before the Tribunal, the Tribunal was duty bound to apply the law laid down in Mafatlal Industries Ltd. (supra), which it did. Similar exercise is done by the High Court in the impugned judgment. We find that the view taken by the High Court is in consonance with the law laid down by this Court in the aforesaid case. We find that there is no scope to interfere with the impugned decision of the High Court and, accordingly, dismiss this appeal. No costs.

                                                                'REPORTABLE'

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 3600 OF 2006


|COMMISSIONER OF CENTRAL EXCISE,            |.....APPELLANT(S)            |
|TIRUCHIRAPALLI                             |                             |
|VERSUS                                     |                             |
|M/S. DALMIA CEMENT (BHARAT) LTD.           |.....RESPONDENT(S)           |


                               J U D G M E N T


A.K. SIKRI, J.
                 On an application  under  Section  35G(3)  of  the  Central
Excise Act, 1944 (hereinafter referred to as the 'Act'), the Customs  Excise
and Gold (Control)  Appellate  Tribunal  (hereinafter  referred  to  as  the
'CEGAT') referred the following question to the High Court of Delhi for  its
opinion :-
“Whether Section 11B of the Central  Excise  Act,  as  amended,  applies  to
cases  where  though  an   order   has   been   passed   directing   refund,
implementation of the order is pending?”


The High Court has answered the aforesaid question  in  favour  of  assessee
holding that since the proceedings under the old Section 11B of the Act  had
attained finality, the amended provision of  Section  11B  of  the  Act,  in
particular, proviso to sub-section (1) shall not apply. In other words,  the
principle of 'unjust enrichment' which was introduced by  way  of  amendment
of Section 11B in the year 1991 shall not be attracted in the  instant  case
as the proceedings under the unamended  Section  stood  finalised  with  the
direction in the application filed under unamended Section 11B  of  the  Act
to refund the excise duty that was paid by the respondent/assessee.  To  put
it pithily, the High Court has held that merely  because  implementation  of
the aforesaid order was pending, in the sense that direction to  refund  the
amount had not been carried  out,  the  authority  could  not  go  into  the
question of unjust enrichment by invoking the proviso to sub-section (1)  of
Section 11B of the Act that had been introduced  by  that  time  by  way  of
amendment in Section 11B of the Act.  Therefore, it  was  not  open  to  the
concerned officer, who was only supposed to carry out the implementation  of
the order, to go into the question  as  to  whether  there  was  any  unjust
enrichment  on  the  part  of  the  assessee  or  not.  In  coming  to  this
conclusion, the High Court has extensively referred to a  9-Judge  Bench  of
this Court in the case of Mafatlal Industries Ltd. and Others  v.  Union  of
India and Others[1].

It is not disputed before us  that  the  law  laid  down  in  the  aforesaid
judgment would be applicable. However, the appellant contends that there  is
a small window left  open  in  the  said  judgment  which  would  cover  the
situation that has arisen in the present case. As per the  case  set  up  by
the appellant, even where order is yet  to  be  implemented,  though  passed
under the unamended provision, at this stage of implementation as  well  the
question of unjust enrichment can be gone into by the concerned authority.

We may point out at this stage itself that Section 11B, as it existed  prior
to its amendment in the year 1991, did not contain any provision  of  unjust
enrichment. Thus, if the assessee was entitled to refund of duty  under  the
Act, it could make an  application  for  such  a  refund  to  the  Assistant
Collector of Central Excise before the expiry of six months from the  refund
date and the procedure  how  such  application  is  to  be  dealt  with  was
stipulated in the said provision. This Section was amended with effect  from
20.09.1991 by Central Excise and Customs Laws (Amendment) Act,  1991.  Under
the amended provision, while considering the  application  for  refund,  the
Assistant Collector of Central Excise is empowered to go into  the  question
as to whether incidence of such duty  has  been  passed  on  by  the  person
claiming refund to any other person. If  the  claimant  has  passed  on  the
incidence of excise duty to other person then  the  application  for  refund
can be rejected on the ground that it would amount to unjust  enrichment  to
that person who is not out of pocket even when the excise duty was  paid  in
excess etc. Proviso to this sub-section (1) further provides that even  when
application for refund was filed before the amendment of  this  Section  and
still pending, it shall be  deemed  that  such  an  application  made  under
amended sub-section (1) of Section 11B of the Act and is to  be  dealt  with
in accordance with the provisions of sub-section  (2),  substituted  by  the
amendment.  Thus, the applications even filed under the  unamended  Act,  if
not disposed of and still pending, are to be  treated  as  filed  under  the
amended Section 11B and the consequence thereof is that even in  respect  of
such applications doctrine of “unjust enrichment” would  be  applicable.  In
this scenario, when an application  was  not  pending,  in  the  sense  that
orders thereon had already been passed directing refund but the  amount  had
not been refunded so far,  we  have  to  determine  as  to  whether  such  a
situation has also to be  dealt  with  under  the  amended  section  thereby
bringing into operation the doctrine of “unjust  enrichment”?  As  mentioned
above, the High Court has answered this question in the  negative  and  this
Court is called upon to decide the veracity of the said view  taken  by  the
High Court in the instant appeal.

The facts which need to be noted for the purposes  of  this  appeal  do  not
need a large canvass and are recapitulated in brief, as under:

The period involved for which the respondent wanted  refund  of  the  excise
duty paid by it is 1970-1978. It may be mentioned that there was  a  dispute
regarding the assessable value of cement cleared by the assessee during  the
aforesaid period, when excise duty of cement was  ad  valorem.  The  dispute
related to freight involved  in  the  dispatch  of  the  cement  to  various
destinations. The Department had included the cost of freight as well  while
determining the assessable value in  terms  of  Section  4  of  the  Central
Excise and Salt Act, 1944 (hereinafter referred to as  the  'Act').  It  was
decided in favour of the assessee vide order dated 06.06.1989 passed by  the
CEGAT. In spite of this decision, amount was  not  refunded.  This  prompted
respondent to file Civil Writ No. 3225 of 1991 in the High  Court  of  Delhi
seeking  writ,  order  or  direction  for  initiating  contempt   of   court
proceedings against the Collector  of  Central  Excise,  Tiruchirapalli  and
Assistant Collector of Central Excise, Tiruchirapalli for not  granting  the
refund despite the order of the CEGAT. The said writ petition  was  disposed
of on 18.07.1995. Taking note of the  statement  of  counsel  for  both  the
parties that a date may be fixed before  the  Collector/Assistant  Collector
to go into the question if the appellant should be granted refund  in  spite
of Section 11B of  the  Act,  direction  was  given  to  appear  before  the
Collector/Assistant Collector  on  22.09.1995  and  the  writ  petition  was
disposed of. Pursuant to the said direction,  hearing  was  granted  by  the
Assistant Commissioner who  passed  orders  dated  28.03.1996  holding  that
assessee was not eligible to get the refund as  per  amended  provisions  of
Section 11B of the Act and directed that this  amount  be  credited  to  the
Consumer Welfare Fund established under Section 12C of the Act.  The  reason
for rejecting the claim of the assessee was that the case of the  respondent
fell within the four walls of the concept of “unjust  enrichment”.   Feeling
aggrieved by this  order,  appeal  was  filed  before  the  Commissioner  of
Customs and Central Excise  (Appeal)  which  was  dismissed  on  20.12.1996.
Further, appeal was preferred before the  CEGAT  and  in  this  attempt  the
assessee triumphed inasmuch as  Tribunal  decided  the  case  in  favour  of
assessee  holding  that  since  no  proceedings  were  pending  before   the
Assistant Commissioner as far as application for refund is concerned and  it
was only the execution of the order of refund that was passed much prior  to
1991,  amended  provision  of  Section  11B  would  not  be  attracted.  The
appellant  filed  rectification  application  which  was  dismissed  by  the
Tribunal on 20.02.2002. Thereafter, appellant  filed  reference  application
before the High Court of Delhi in terms of 35G(3) of  the  Act  raising  the
question of law which has already been reproduced in  the  earlier  part  of
this judgment. Again, as pointed out above,  the  High  Court  has  answered
this question in favour of assessee, recording the following findings:
“(a)  It has been held that there are no merits in this  reference,  as  the
question involved is clearly settled by the 9-Judge Bench decision  of  this
Hon'ble Court in the case of Mafatlal Industries Ltd. (supra)  wherein  this
Hon'ble Court held that if an application for refund has been disposed  off,
and the order had become final before the  1991  amendment  to  Section  11B
came into force, the principles of unjust enrichment will not apply.

(b)  Section 11-B, after the 1991 amendment, stated that the party  applying
for refund had to establish that the incidence of such  duty  had  not  been
passed  on  by  him  to  any  other  person.  It  follows,  therefore,  that
Parliament did not apply  the  principles  of  unjust  enrichment  to  cases
covered by  the  unamended  Section11B  and  it  was  the  reason  that  the
amendment was made in Section 11-B in 1991.”



On the basis of what is pointed out above, it is clear that the exercise  to
be undertaken is to find out the ratio  laid  down  in  Mafatlal  Industries
Ltd. (supra) in the given situation. Before we advert to the same,  we  deem
it appropriate to refer to, at this stage, unamended and amended  provisions
of Section 11B.
“Section 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)  Where as a result of any order passed in appeal or revision under  this
Act refund of any duty of excise becomes due to any  persons  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  no  excisable  or  were  entitled  to
exemption from duty and no court shall have any jurisdiction in  respect  of
such claim.”

After 1991 amendment, the material part of Section 11B reads as follows:
“11B. Claim for refund of duty and interest, if any, paid on such  duty.—(1)
Any person claiming refund of any duty of excise and interest, if any,  paid
on such duty may make an application for refund of such [duty and  interest,
if any, paid on such duty to the Assistant Commissioner  of  Central  Excise
or Deputy Commissioner of Central Excise before the expiry of one year  from
the relevant date in such form and manner  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  and  interest,  if
any, paid on such duty in relation to  which  such  refund  is  claimed  was
collected from, or  paid  by,  him  and  the  incidence  of  such  duty  and
interest, if any, paid on such duty had not been passed on  by  him  to  any
other person:

            Provided that where an After 1991 amendment, the  material  part
of Section 11B reads as follows:application for refund has been made  before
the commencement of the Central Excises and Customs  Laws  (Amendment)  Act,
1991 (40 of 1991), such application shall be deemed to have been made  under
this sub-section as amended by the said Act and  the  same  shall  be  dealt
with in accordance with the provisions of sub-section (2) as substituted  by
that Act:

            Provided further that the  limitation  of  one  year  shall  not
apply where any duty and interest, if any, paid on such duty has  been  paid
under protest.

(2) If, on receipt of any such application, the  Assistant  Commissioner  of
Central Excise or Deputy Commissioner of Central Excise  is  satisfied  that
the whole or any part of the duty of excise and interest, if  any,  paid  on
such duty paid by  the  applicant  is  refundable,  he  may  make  an  order
accordingly and the amount so determined shall be credited to the Fund:

            Provided that the amount of [duty of  excise  and  interest,  if
any, paid on such duty  as  determined  by  the  Assistant  Commissioner  of
Central Excise or Deputy Commissioner of Central Excise under the  foregoing
provisions of this sub-section shall,  instead  of  being  credited  to  the
Fund, be paid to the applicant, if such amount is relatable to--

(a) rebate of duty of excise on excisable goods exported out of India or  on
excisable materials used in the manufacture of goods which are exported  out
of India;

(b) unspent advance deposits lying in balance  in  the  applicant's  account
current maintained with the Commissioner of Central Excise  or  Commissioner
of Central Excise;

(c) refund of credit of duty paid on  excisable  goods  used  as  inputs  in
accordance with the  rules  made,  or  any  notification  issued,After  1991
amendment, the material part of Section 11B reads  as  follows:  under  this
Act;

(d) the duty of excise and interest, if any, paid on such duty paid  by  the
manufacturer, if he had not  passed  on  the  incidence  of  such  duty  and
interest, if any, paid on such duty to any other person;

(e) the duty of excise and interest, if any, paid on such duty borne by  the
buyer, if he had not passed on the incidence of such duty and  interest,  if
any, paid on such duty to any other person;

(f) the duty of excise and interest, if any, paid on such duty borne by  any
other  such  class  of  applicants  as  the  Central  Government   may,   by
notification in the Official Gazette, specify:

            Provided further that no notification under clause  (f)  of  the
first proviso  shall  be  issued  unless  in  the  opinion  of  the  Central
Government the incidence of duty and interest, if any,  paid  on  such  duty
has not been passed on by the persons concerned to any other person.

(3) Notwithstanding anything to the  contrary  contained  in  any  judgment,
decree, order or direction of the Appellate Tribunal or  any  Court  in  any
other provision of this Act or the rules made thereunder or  any  other  law
for the time being in force, no refund shall be made except as  provided  in
sub-section (2).

(4) Every notification under clause (f) of the first proviso to  sub-section
(2) shall be laid before each House of Parliament,  if  it  is  sitting,  as
soon as may be after the issue of  the  notification,  and,  if  it  is  not
sitting, within seven days of its reassembly,  and  the  Central  Government
shall seek the approval of Parliament to the notification  by  a  resolution
moved within a period of fifteen days beginning with the day  on  which  the
notification is so laid before the House of the  People  and  if  Parliament
makes any modification in the notification or directs that the  notification
should cease to have effect, the notification shall thereafter  have  effect
only in such modified form or be of no effect,  as  the  case  may  be,  but
without prejudice to the validity of anything previously done thereunder.

(5) For the removal of doubts, it is hereby declared that  any  notification
issued under clause (f) of the first proviso to sub-section  (2),  including
any such notification approved or modified under  sub-section  (4),  may  be
rescinded by the Central Government at  any  time  by  notification  in  the
Official Gazette.

Explanation.--For the purposes of this section,--

(A) "refund" includes rebate of duty of excise on excisable  goods  exported
out of India or on excisable materials used  in  the  manufacture  of  goods
which are exported out of India;

(B) "relevant date" means,--

(a) in the case of goods exported out of India  where  a  refund  of  excise
duty paid is available in respect of the goods themselves or,  as  the  case
may be, the excisable materials used in the manufacture of such goods,--

(i) if the goods are exported by sea or air, the date on which the  ship  or
the aircraft in which such goods are loaded, leaves India, or

(ii) if the goods are exported by land, the date on which  such  goods  pass
the frontier, or

(iii) if the goods are exported by post, the date of dispatch  of  goods  by
the Post Office concerned to a place outside India;

(b) in the case of goods returned for being remade, refined,  reconditioned,
or subjected to any other similar process,  in  any  factory,  the  date  of
entry into the factory for the purposes aforesaid;

(c) in the case of goods to which banderols are required to  be  affixed  if
removed for home consumption but  not  so  required  when  exported  outside
India, if returned to a factory after having been removed from such  factory
for export out of India, the date of entry into the factory;

(d) in a case where a manufacturer is required to pay a sum, for  a  certain
period, on the basis  of  the  rate  fixed  by  the  Central  Government  by
notification in the Official Gazette in full discharge of his liability  for
the duty  leviable  on  his  production  of  certain  goods,  if  after  the
manufacturer has made the payment on the basis of such rate for  any  period
but before the expiry of that period such rate is reduced, the date of  such
reduction;

(e) in the case of a person,  other  than  the  manufacturer,  the  date  of
purchase of the goods by such person;

(ea) in the case of goods which  are  exempt  from  payment  of  duty  by  a
special order issued under sub-section (2) of section 5A, the date of  issue
of such order;

(eb) in case where duty of excise is paid provisionally under  this  Act  or
the rules made thereunder, the date of adjustment of duty  after  the  final
assessment thereof;

(ec) in  case  where  the  duty  becomes  refundable  as  a  consequence  of
judgment, decree, order  or  direction  of  appellate  authority,  Appellate
Tribunal or  any  court,  the  date  of  such  judgment,  decree,  order  or
direction;

(f) in any other case, the date of payment of duty.”


We have already narrated the facts and events in the instant case in  detail
above. However, it is pertinent  to  keep  in  mind  that  applications  for
refund of excise which were preferred  by  the  assessee  had  already  been
allowed finally by the orders of  CEGAT  dated  01.06.1989  and  06.06.1989.
This obviously happened before the amendment in  the  Section  in  the  year
1991. At the same time, the  refund  had  not  been  actually  paid  to  the
assessee till 1991 when the provisions of Section 11B came  to  be  amended.
We now advert to the decision  in  the  case  of  Mafatlal  Industries  Ltd.
(supra).

It is a nine Judge Bench decision. Majority opinion was  delivered  by  B.P.
Jeevan Reddy, J. for himself and  on  behalf  of  four  other  Judges.  K.S.
Paripoornan, J. and S.C.Sen, J. wrote their  separate  opinions.   Hansaria,
J. agreed with the conclusions and reasoning  of  Paripoornan,  J.  However,
insofar as issue at hand is concerned,  they  concurred  with  the  majority
opinion rendered by B.P. Jeevan Reddy, J.  Thus, eight out  of  nine  Judges
have taken the same view. A.M. Ahmadi, the then Chief Justice, was the  only
dissenting Judge, who took contrary view on  this  particular  issue.   With
this background in mind, we reproduce the following relevant  portions  from
the opinion of B.P. Jeeven Reddy, J.:
“57. The first decision of this Court to consider the amended  Section  11-B
is in Union of India v. Jain Spinners Ltd (1992) 4 SCC 389 The  validity  of
the 1991 (Amendment) Act was, however, neither raised nor considered by  the
court. The impugned orders of the High Court, made before  the  coming  into
force of the 1991 (Amendment) Act,  directing  refund  of  the  excess  duty
collected  to  the  manufacturers,  this  Court  held,  would   defeat   the
provisions of amended Section 11-B which had  come  into  force  during  the
pendency of the refund proceedings. The Court  held  that  so  long  as  the
refund proceedings are pending, the amended  provisions  get  attracted  and
disentitle the manufacturer-payer from claiming any refund contrary  to  the
said provisions. In other words, the contention of  the  manufacturers  that
the amended Section 11-B applies only to claims of refund arising after  the
coming into force of the said Amendment Act was rejected.

96. There is yet another circumstance: Section 12-B does not  create  a  new
presumption unknown till  then;  it  merely  gives  statutory  shape  to  an
existing situation, as explained hereinbefore. At the most, it can  be  said
that there were two views on the subject and Section  12-B  affirms  one  of
them. Even without Section 12-B, the true position is the same, as  held  by
us in the earlier part of this judgment. The obligation to prove  that  duty
has not been passed on to another person is always there as  a  precondition
to claim of refund. It cannot also be  said  that  by  giving  retrospective
effect to Section 11-B, any vested rights or substantive  rights  are  being
taken away. The deprivation, if at all, is not real.  The  manufacturer  has
already collected the duty  from  his  purchaser  and  has  thus  reimbursed
itself. By applying for refund  yet,  he  is  trying  to  reap  a  windfall;
deprivation of that cannot be said to be real or  substantial  prejudice  or
loss. A manufacturer had no vested legal right to refund even  when  he  had
passed on the burden of duty to others. No law conferred  such  a  right  in
him — not Article 265, nor Section 11-B.  It  was  only  on  account  of  an
incorrect view of law taken in Kanhaiya Lal 1959 SCR 1350 : AIR 1959 SC  135
: (1958) 9 STC 747 and that cannot be  treated  as  a  vested  legal  right.
Correction  of  judicial  error  does   not   amount   to   deprivation   of
vested/substantive rights, even though  a  person  may  be  deprived  of  an
unwarranted advantage he had under the overruled decision. In  cases,  where
the burden is not passed on, there is no prejudice; he can  always  get  the
refund.

97. There is yet another circumstance: Section 12-B does not  create  a  new
presumption unknown till  then;  it  merely  gives  statutory  shape  to  an
existing situation, as explained hereinbefore. At the most, it can  be  said
that there were two views on the subject and Section  12-B  affirms  one  of
them. Even without Section 12-B, the true position is the same, as  held  by
us in the earlier part of this judgment. The obligation to prove  that  duty
has not been passed on to another person is always there as  a  precondition
to claim of refund. It cannot also be  said  that  by  giving  retrospective
effect to Section 11-B, any vested rights or substantive  rights  are  being
taken away. The deprivation, if at all, is not real.  The  manufacturer  has
already collected the duty  from  his  purchaser  and  has  thus  reimbursed
itself. By applying for refund  yet,  he  is  trying  to  reap  a  windfall;
deprivation of that cannot be said to be real or  substantial  prejudice  or
loss. A manufacturer had no vested legal right to refund even  when  he  had
passed on the burden of duty to others. No law conferred  such  a  right  in
him — not Article 265, nor Section 11-B.  It  was  only  on  account  of  an
incorrect view of law taken in Kanhaiya Lal 1959 SCR 1350 : AIR 1959 SC  135
: (1958) 9 STC 747 and that cannot be  treated  as  a  vested  legal  right.
Correction  of  judicial  error  does   not   amount   to   deprivation   of
vested/substantive rights, even though  a  person  may  be  deprived  of  an
unwarranted advantage he had under the overruled decision. In  cases,  where
the burden is not passed on, there is no prejudice; he can  always  get  the
refund.

98. A major attack is  mounted  by  the  learned  counsel  for  petitioners-
appellants on Section 11-B and its allied  provisions  on  the  ground  that
real purpose behind them was  not  to  benefit  the  consumers  by  refusing
refund to manufacturers (on the ground of passing on the  burden)  but  only
to enable the Government to retain the  illegally  collected  taxes.  It  is
suggested that the creation of the Consumer Welfare Fund is a mere  pretence
and not an honest exercise. By reading the Rules framed under Section  12-D,
it is pointed out, even a consumer, who has really borne the burden  of  tax
and is in a position to establish that fact, is yet not  entitled  to  apply
for refund of the duty since the Rules do not provide for such a  situation.
The Rules contemplate only grants being made to Consumer Welfare  Societies.
Even in the matter of making grants, it  is  submitted,  the  Rules  are  so
framed as to make it highly difficult for any consumer organisation  to  get
the grant. There is no provision in the  Act,  Shri  Nariman  submitted,  to
locate the person really entitled to refund and to make over  the  money  to
him. “We expect a sensitive Government not to bluff but  to  hand  back  the
amounts  to  those  entitled  thereto”,  intoned  Shri  Nariman.  It  is   a
colourable device — declaimed Shri Sorabjee — “a dirty trick” and “a  shabby
thing”. The reply of Shri Parasaran to this criticism  runs  thus:  It  ill-
becomes the manufacturers/assessees to espouse the cause of consumers,  when
all the  while  they  had  been  making  a  killing  at  their  expense.  No
consumers’ organisation had come forward to voice any grievance against  the
said provisions. Clause (e) of the proviso to sub-section (2) of Section 11-
B does provide for the buyer of the goods, to whom the burden  of  duty  has
been passed on, to apply for refund of duty to him,  provided  that  he  has
not in his turn passed on the duty to others. It is, therefore, not  correct
to suggest that the Act does not provide for refund of duty  to  the  person
who has actually borne  the  burden.  There  is  no  vice  in  the  relevant
provisions of the Act. Rules cannot be relied upon to  impugn  the  validity
of an enactment, which must stand or fall on its own  strength.  The  defect
in the Rules, assuming that there is any, can always  be  corrected  if  the
experience warrants it. The Court too may indicate the modifications  needed
in the Rules. The Government is always  prepared  to  make  the  appropriate
changes in the Rules since it views the  process  as  a  “trial  and  error”
method — says Shri Parasaran.

105. It would be evident from the  above  discussion  that  the  claims  for
refund under the said two  enactments  constitute  an  independent  regimen.
Every decision  favourable  to  an  assessee/manufacturer,  whether  on  the
question  of  classification,  valuation  or  any  other  issue,  does   not
automatically entail refund. Section 11-B of the Central  Excises  and  Salt
Act and Section 27 of the Customs Act, whether  before  or  after  the  1991
Amendment — as interpreted by us herein — make every  refund  claim  subject
to proof of not passing on the burden of duty to others. Even if a  suit  is
filed, the very same condition operates. Similarly,  the  High  Court  while
examining its jurisdiction under Article 226 — and this Court  while  acting
under Article 32 — would insist upon  the  said  condition  being  satisfied
before ordering refund. Unless the claimant for refund establishes  that  he
has not passed on the burden of duty to another, he would  not  be  entitled
to refund, whatever be the proceeding and whichever be  the  forum.  Section
11-B/Section  27  are   constitutionally   valid,   as   explained   by   us
hereinbefore. They have to be applied and followed implicitly wherever  they
are applicable.

108. The discussion in the judgment yields the  following  propositions.  We
may forewarn that these propositions are set out  merely  for  the  sake  of
convenient reference and are not supposed to be exhaustive. In case  of  any
doubt or ambiguity in these propositions,  reference  must  be  had  to  the
discussion and propositions in the body of the judgment.

(i) Where a refund of tax/duty is claimed on the ground  that  it  has  been
collected from the petitioner/plaintiff — whether  before  the  commencement
of the Central Excises and Customs Laws (Amendment) Act, 1991 or  thereafter
— by misinterpreting or misapplying the provisions of  the  Central  Excises
and Salt Act, 1944 read with Central Excise  Tariff  Act,  1985  or  Customs
Act, 1962 read with Customs Tariff Act or by misinterpreting or  misapplying
any of the  rules,  regulations  or  notifications  issued  under  the  said
enactments, such a claim has  necessarily  to  be  preferred  under  and  in
accordance with the provisions  of  the  respective  enactments  before  the
authorities  specified  thereunder  and  within  the  period  of  limitation
prescribed therein. No suit  is  maintainable  in  that  behalf.  While  the
jurisdiction of the High Courts under Article 226 — and of this Court  under
Article 32  —  cannot  be  circumscribed  by  the  provisions  of  the  said
enactments, they will certainly have due regard to  the  legislative  intent
evidenced by the provisions of  the  said  Acts  and  would  exercise  their
jurisdiction consistent with the provisions of the Act.  The  writ  petition
will be considered and disposed of in the light of and  in  accordance  with
the provisions of Section 11-B. This is for the reason that the power  under
Article 226 has to be exercised to effectuate the rule of law  and  not  for
abrogating it.

The said enactments including Section 11-B of the Central Excises  and  Salt
Act and Section 27 of  the  Customs  Act  do  constitute  “law”  within  the
meaning of Article 265 of the Constitution  of  India  and  hence,  any  tax
collected, retained or not refunded in accordance with the  said  provisions
must be held to be collected, retained or not refunded, as the case may  be,
under  the  authority  of  law.  Both  the  enactments  are   self-contained
enactments providing for levy, assessment, recovery  and  refund  of  duties
imposed thereunder. Section 11-B of the Central Excises  and  Salt  Act  and
Section 27 of the Customs Act, both before and after  the  1991  (Amendment)
Act are constitutionally valid and have to be followed and given effect  to.
Section 72 of the Contract Act has no application to such a claim of  refund
and cannot form a basis for maintaining a  suit  or  a  writ  petition.  All
refund claims except those mentioned under Proposition (ii)  below  have  to
be and must be filed and adjudicated under the  provisions  of  the  Central
Excises and Salt Act or  the  Customs  Act,  as  the  case  may  be.  It  is
necessary  to  emphasise  in  this  behalf  that  Act  provides  a  complete
mechanism for correcting any errors whether of fact  or  law  and  that  not
only an appeal is provided to a Tribunal  —  which  is  not  a  departmental
organ — but to this Court, which is a civil court.

(ii) Where, however, a refund is claimed on the ground  that  the  provision
of  the  Act  under  which  it  was  levied  is  or  has  been  held  to  be
unconstitutional, such a claim, being a claim outside  the  purview  of  the
enactment, can be made either by  way  of  a  suit  or  by  way  of  a  writ
petition. This principle is, however,  subject  to  an  exception:  Where  a
person approaches the High  Court  or  the  Supreme  Court  challenging  the
constitutional validity of a provision but fails, he cannot  take  advantage
of the declaration of unconstitutionality  obtained  by  another  person  on
another ground; this is for the reason that so far as he is  concerned,  the
decision has become final and cannot be reopened on the basis of a  decision
on another person’s case; this is the ratio of the opinion of  Hidayatullah,
C.J. in Tilokchand Motichand (1969) 1 SCC 110 : (1969) 2 SCR 824 : AIR  1970
SC 898  and we respectfully agree with it.  Such  a  claim  is  maintainable
both  by  virtue  of  the  declaration  contained  in  Article  265  of  the
Constitution of India and also by virtue of Section 72 of the Contract  Act.
In such cases, period of limitation would  naturally  be  calculated  taking
into account the principle underlying  clause  (c)  of  sub-section  (1)  of
Section 17 of the Limitation Act, 1963. A refund claim in such  a  situation
cannot be governed by the provisions of the Central Excises and Salt Act  or
the  Customs  Act,  as  the  case  may  be,  since  the  enactments  do  not
contemplate any of their provisions being struck down  and  a  refund  claim
arising on that account. In other words, a  claim  of  this  nature  is  not
contemplated by the said enactments and is outside their purview.
(iii) A claim for refund, whether made under the provisions of  the  Act  as
contemplated in Proposition (i) above or in a suit or writ petition  in  the
situations contemplated by Proposition (ii) above, can succeed only  if  the
petitioner/plaintiff alleges and establishes that he has not passed  on  the
burden of duty to another person/other persons. His refund  claim  shall  be
allowed/decreed only when he establishes that  he  has  not  passed  on  the
burden of the duty or to the extent he has not so passed  on,  as  the  case
may be. Whether the claim for restitution is  treated  as  a  constitutional
imperative or as a statutory requirement, it is neither  an  absolute  right
nor an unconditional obligation but is subject to the above requirement,  as
explained in the body of the judgment. Where the  burden  of  the  duty  has
been passed on, the claimant cannot say that he has suffered any  real  loss
or prejudice. The real loss or prejudice is suffered in such a case  by  the
person who has ultimately borne the burden and it is only  that  person  who
can legitimately claim its refund. But  where  such  person  does  not  come
forward or where it is not possible to refund the amount to him for  one  or
the other reason, it is just and appropriate that that  amount  is  retained
by the State, i.e., by the people. There is  no  immorality  or  impropriety
involved in such a proposition.

The doctrine of unjust enrichment  is  a  just  and  salutary  doctrine.  No
person can seek to collect the duty from  both  ends.  In  other  words,  he
cannot collect the duty from his purchaser at one end and also  collect  the
same duty from the State on the ground that it has been collected  from  him
contrary to law. The power of the Court is not meant  to  be  exercised  for
unjustly enriching a person. The doctrine of unjust enrichment is,  however,
inapplicable to the State. State represents the people of  the  country.  No
one can speak of the people being unjustly enriched.

(iv) It is not open to any person to make a refund claim on the basis  of  a
decision of a court or tribunal rendered in the case of another  person.  He
cannot also claim  that  the  decision  of  the  court/tribunal  in  another
person’s case has led him to discover the mistake of law under which he  has
paid the tax nor can he claim that he is entitled to prefer a writ  petition
or to institute a suit within three  years  of  such  alleged  discovery  of
mistake of law. A person, whether a manufacturer  or  importer,  must  fight
his own battle and must succeed  or  fail  in  such  proceedings.  Once  the
assessment or levy has become final in his case, he cannot  seek  to  reopen
it nor can he claim refund without reopening such  assessment/order  on  the
ground of a decision in  another  person’s  case.  Any  proposition  to  the
contrary not only results in substantial prejudice to  public  interest  but
is offensive to several well-established principles of law.  It  also  leads
to grave public mischief. Section 72  of  the  Contract  Act,  or  for  that
matter Section 17(1)(c) of the Limitation Act, 1963, has no  application  to
such a claim for refund.

(v) Article 265 of the Constitution has to be construed in the light of  the
goal and the ideals set out in the  Preamble  to  the  Constitution  and  in
Articles 38 and 39 thereof. The concept of economic justice demands that  in
the case of indirect taxes like Central Excises duties and  Customs  duties,
the tax collected without the authority of law shall not be refunded to  the
petitioner-plaintiff unless he alleges  and  establishes  that  he  has  not
passed on the burden of duty to a third party and that he has himself  borne
the burden of the said duty.

(vi) Section 72 of the Contract Act is based upon and  incorporates  a  rule
of equity. In such a situation, equitable  considerations  cannot  be  ruled
out while applying the said provision.

(vii) While examining the claims  for  refund,  the  financial  chaos  which
would result in the administration of the State by allowing such  claims  is
not  an  irrelevant  consideration.  Where  the   petitioner-plaintiff   has
suffered no real loss or prejudice, having passed on the burden  of  tax  or
duty to another person, it would be unjust to  allow  or  decree  his  claim
since it is bound to prejudicially affect the public exchequer. In  case  of
large claims, it may well result in financial chaos  in  the  administration
of the affairs of the State.

(viii) The decision of this Court in STO v.  Kanhaiya  Lal  Mukundlal  Saraf
must be held to have been wrongly decided insofar as  it  lays  down  or  is
understood to have laid  down  propositions  contrary  to  the  propositions
enunciated in (i)  to  (vii)  above.  It  must  equally  be  held  that  the
subsequent  decisions  of  this  Court  following  and  applying  the   said
propositions in Kanhaiya Lal have also been wrongly  decided  to  the  above
extent. This declaration — or the law  laid  down  in  Propositions  (i)  to
(vii)  above  —  shall  not  however  entitle  the  State  to  recover   the
taxes/duties already refunded and in  respect  whereof  no  proceedings  are
pending before any authority/Tribunal or Court as on this date. All  pending
matters  shall,  however,  be  governed   by   the   law   declared   herein
notwithstanding that the  tax  or  duty  has  been  refunded  pending  those
proceedings, whether under the orders of an authority, Tribunal or Court  or
otherwise.

(ix) The amendments made and the provisions inserted by the Central  Excises
and Customs Law (Amendment) Act, 1991 in the Central Excises  and  Salt  Act
and the Customs Act are constitutionally valid and are unexceptionable.

(x) By virtue of sub-section (3) to Section 11-B of the Central Excises  and
Salt Act, as amended by the aforesaid Amendment Act, and by  virtue  of  the
provisions contained in sub-section (3) of Section 27 of  the  Customs  Act,
1962, as amended by the said  Amendment  Act,  all  [pic]claims  for  refund
(excepting   those   which   arise   as   a   result   of   declaration   of
unconstitutionality of a provision whereunder the levy was created) have  to
be preferred and adjudicated only under the  provisions  of  the  respective
enactments. No suit for refund of duty is maintainable in  that  behalf.  So
far as the jurisdiction  of  the  High  Courts  under  Article  226  of  the
Constitution — or of this Court under Article 32 — is concerned, it  remains
unaffected by the provisions of the Act. Even so,  the  Court  would,  while
exercising the jurisdiction under the said articles, have due regard to  the
legislative intent manifested  by  the  provisions  of  the  Act.  The  writ
petition would naturally be considered and disposed of in the light  of  and
in accordance with the provisions of Section 11-B. This is  for  the  reason
that the power under Article 226 has  to  be  exercised  to  effectuate  the
regime of law and not for abrogating it. Even while acting  in  exercise  of
the said constitutional power, the High Court cannot ignore the law nor  can
it override it. The power under Article 226 is conceived to serve  the  ends
of law and not to transgress them.

(xi) Section 11-B applies to all  pending  proceedings  notwithstanding  the
fact that the duty  may  have  been  refunded  to  the  petitioner/plaintiff
pending the proceedings or under the orders of the  Court/Tribunal/Authority
or otherwise. It must be held that Union  of  India  v.  Jain  Spinners  and
Union of India v. ITC  have  been  correctly  decided.  It  is,  of  course,
obvious that where the refund proceedings have finally terminated —  in  the
sense that the appeal period has also expired — before the  commencement  of
the 1991  (Amendment)  Act  (19-9-1991),  they  cannot  be  reopened  and/or
governed by Section 11-B(3) [as amended by the 1991 (Amendment) Act].  This,
however, does not mean that  the  power  of  the  appellate  authorities  to
condone delay in appropriate  cases  is  affected  in  any  manner  by  this
clarification made by us.

(xii) Section 11-B does provide for  the  purchaser  making  the  claim  for
refund provided he is able to establish  that  he  has  not  passed  on  the
burden to another person. It, therefore, cannot be said  that  Section  11-B
is a device to retain the illegally collected taxes by the  State.  This  is
equally true of Section 27 of the Customs Act, 1962.”


It is clear from the above that in no  unambiguous  terms  and  with  utmost
clarity and  certainty,  the  majority  interpreted  amended  provisions  of
Section 11B including proviso to sub-section (1) thereof  to  hold  that  so
long as refund proceedings are pending,  the  amended  provision  would  get
attracted and would disentitle  the  manufacturer/payer  from  claiming  any
refund contrary to the said proviso.  However,  in  those  cases  where  the
refund proceedings had finally been terminated, in  the  sense  –  that  the
appeal period has also expired – before  the  commencement  of  the  amended
provision,  these  cannot  be  re-opened  and/or  governed  by  the  amended
provision.  Concurring  with  the  aforesaid  view,   K.S.  Paripoornan,  J.
expressed his opinion in the following manner:
“342.…..Sections 11-B(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  11-B,  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.........”

The same view has been expressed by S.C. Sen, J.:
“255. I shall now examine the other provisions of the newly-added  sections.
Sub-section (1) of Section 11-B requires an application  for  refund  to  be
made. Sub-section (2) requires the Assistant Commissioner to pass  an  order
of refund provided the  conditions  set  out  therein  are  fulfilled.  Sub-
section (3) merely lays  down  that  no  refund  shall  be  made  except  as
provided in sub-section (2). There is a non obstante clause that  this  will
operate notwithstanding anything to the contrary contained in any  judgment,
decree, order etc. It is obvious that new provisions  will  apply  in  cases
where applications for refund were made before the new provisions came  into
force and also subsequently. Sub-section (3) has  no  retrospective  effect.
When a case has been finally heard and disposed of and  no  application  for
refund need be made, sub-section (3) cannot apply. If there is  a  judgment,
decree or order which has to be carried out,  the  legislature  cannot  take
away the force and effect of that  judgment,  decree  or  order,  except  by
amending the law retrospectively on the basis  of  which  the  judgment  was
pronounced.”


Notwithstanding, the aforesaid dicta,  Mr.  Panda,  learned  senior  counsel
appearing for the appellant, still sees some light coming  through  a  small
window as he wants pending proceedings to include a situation  where  refund
had not been granted, even when the order was passed,  with  the  submission
that the Assistant Commissioner even at this stage was competent to go  into
the question of unjust enrichment as order regarding  grant  of  refund  was
post 1991 event.  To buttress this submission, he argued that the  principle
of unjust enrichment was in the domain of public interest and  intention  by
incorporating provisions like proviso to sub-section (1) of Section  11  was
clear, namely, so far as amount is not actually  refunded,  the  authorities
were competent to invoke  this  doctrine  of  “unjust  enrichment”.  It  was
argued that it will be totally inequitable and unfair to the public  as  the
party (assessee herein) would be unjustly enriched. He also relied upon  the
orders dated 18.07.1995 by the High Court in Civil Writ  No.  3225  of  1991
specifically permitting the Assistant Collector  to  go  into  the  question
whether the assessee is to  be  granted  the  refund  in  spite  of  amended
Section 11B of the Act with the following observation :
“Both the Counsel agree that a date may be fixed when the  petitioner  shall
appear   before   the   collector/Assistant   Collector,   Central   Excise,
Trichiapalli, to go into the question if petitioner should  be  granted  the
refund in spite of Section 11B of the Central  Excise  and  Salt  Act.   We,
accordingly, direct  that  petitioner  shall  appear  before  the  concerned
Collector/Assistant  Collector,  Central  Excise,  Trichirapalli   on   22nd
September 1995. no further orders  are  required  in  this  petition,  which
stands disposed of.”


After examining the matter in its entirely, we find that it is not  possible
to  countenance  the  aforesaid  submission  of  Mr.  Panda.  In  the  first
instance, it requires to be remarked that only after  amendment  in  Section
11B of the Act in the year 1991, any  person  applying  for  refund  has  to
establish that incidence of such duty has not been passed on by him  to  any
other person. The unamended provision did not contain any such  stipulation.
Therefore, under the old  provision,  the  only  obligation  of  the  person
claiming refund was to make such an application before  the  expiry  of  six
months from the relevant date and to show how the refund was  admissible  to
the applicant. In such a case, the Assistant  Collector  of  Central  Excise
was to only examine as to whether excise duty was paid in  excess  etc.  and
was refundable to the claimant as a result of adjudication  of  the  dispute
or  otherwise.   It  is  only  in  the  amended  provision  that  additional
stipulation is provided as per which  the  claimant  is  required  to  file,
along with application  for  refund,  such  documentary  or  other  evidence
including documents referred to any Section 12A  of  the  Act  to  establish
that the amount of duty of excise was collected from the  claimant  or  paid
by the claimant and that “incidence of such duty had not been passed  on  by
him to any other person”. It clearly follows from  the  above  that   before
the amendment of Section 11B of the Act,   principle  of  unjust  enrichment
was not incorporated  under  the  unamended  provision.  In  fact  that  was
precisely the reason for amending the provision so  that  this  doctrine  of
“unjust enrichment” is incorporated, viz., to  take  care  of  the  mischief
that was prevailing under the  unamended  provision  which  was  removed  by
making amendment, popularly known as Heydon's Mischief Rule.

Proviso to sub-section (1) of Section 11B, as amended, would  be  applicable
in a situation  where  an  application  for  refund  made  before  the  said
amendment was still pending at the time when the provisions of  Section  11B
were amended.  This is how the said proviso is interpreted by this Court  in
Mafatlal Industries Ltd. (supra).

Once we find that no such application was pending  and  the  orders  on  the
said application had already been passed, the proviso  ceases  to  have  any
application.  The reason, even otherwise,  is  very  obvious.   Section  11B
relates to claim for refund of duty and the procedure for such a  refund  is
stipulated in this section.  As per  sub-section  (1)  thereof,  any  person
claiming refund of any duty of excise has to move an application for  refund
of such duty to the Assistant Commissioner of Central Excise.  Once such  an
application is made, the same is to be considered in  accordance  with  this
provision.  As already pointed out above,  under  the  unamended  provision,
the Assistant Commissioner was not required to go into the  question  as  to
whether incidence of such duty had been passed on by the applicant  claiming
refund to any other person or not.  However,  if  the  application  was  not
decided till the time amendment was incorporated in the year  1991,  as  per
the proviso,  while  dealing  with  such  an  application  for  refund,  the
Assistant Commissioner is still empowered to  go  into  this  question  even
when the application was  filed  before  the  commencement  of  the  amended
provision.  This situation would  prevail  only  when  there  is  a  pending
application before the Assistant Commissioner of Central  Excise,  which  is
yet to be decided.  If the order for  refund  on  such  an  application  had
already been passed before coming into force the amended  provision  and  no
application was pending at  the  commencement  of  the  Central  Excise  and
Customs Laws (Amendment) Act, 1991 before the  Assistant  Commissioner  and,
therefore, question of applying the said proviso and going  into  the  issue
as to whether incidence of such duty had been passed  by  the  applicant  to
any other person or not would not arise.  Thereafter, order  passed  on  the
application is only to be implemented by  giving  the  refund  as  per  that
order.  By no stretch of imagination, the Officer, at the time  of  carrying
out the orders for refund, which have already been passed, can  be  invested
with the powers to go into the question of  unjust  enrichment  by  invoking
the proviso to sub-section (1) of Section 11B.  In  the  instant  case,  the
order on the refund  application  of  the  respondent  had  been  passed  on
06.06.1989,  which  was  much  before  the  amended  provision   came   into
operation.  In fact,  even  after  the  order  of  refund  was  passed,  the
appellant had not refunded the amount and it is in these circumstances  that
writ petition was filed  in  the  High  Court  for  initiation  of  contempt
proceedings against the defaulting officers.  In such proceedings, the  High
Court had passed the order dated 18.07.1995.  In this order, no  doubt,  the
Court observed that the Assistant Commissioner would go  into  the  question
if the respondent should be granted the refund in spite of  Section  11B  of
the Act.  However, merely because of such observations, it  cannot  be  said
that the Assistant Commissioner was entitled  to  look  into  the  issue  of
unjust  enrichment  when  if,  otherwise,  he  he  was  otherwise   had   no
jurisdiction to do so in the facts of the present case.   Such  observations
were given in view of the statement of the counsel for  the  Government  who
brought to the notice of the Court the amended provisions contained in  sub-
section (3) of Section 11B of the Act.  The High Court did not go  into  the
issue as to whether  such  a  course  of  action  was  permissible  or  not.
Another pertinent aspect which  needs  to  be  kept  in  mind  is  that  the
interpretation that is to be accorded to the amended provision had not  been
decided by this Court till that time and the law on this issue  came  to  be
settled in the year 1997 only when the judgment in Mafatlal Industries  Ltd.
(supra) was pronounced by this Court.

Thus, when the order of the Assistant Commissioner was  challenged  and  the
matter came before the Tribunal, the Tribunal was duty bound  to  apply  the
law laid down in Mafatlal Industries Ltd. (supra), which  it  did.   Similar
exercise is done by the High Court in the impugned judgment.  We  find  that
the view taken by the High Court is in consonance with the law laid down  by
this Court in the aforesaid case.

We find that there is no scope to interfere with the  impugned  decision  of
the High Court and, accordingly, dismiss this appeal.
            No costs.


                             .............................................J.
                                                                (A.K. SIKRI)



                             .............................................J.
                                                     (ROHINTON FALI NARIMAN)

NEW DELHI;
SEPTEMBER 02, 2015.
-----------------------
[1]   (1997) 5 SCC 536

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