IN THE HIGH COURT OF JUDICATURE AT PATNA CIVIL WRIT JURISDICTION CASE No.4125 of 2011 ====================================================== Harinagar Sugar Mill Ltd., a company registered under the provision of the Indian Companies Act, 1956, having its registered office at 207, Kalbadevi Road, Mumbai and its sugar factory at Harinagar, P.O. – Harinagar, P.S. – Ramnagar, District – West Champaran through its Chief General Manager, S.N. Poddar @ Satya Narayan Poddar and the Chief Cane Controller H.P. Pancharia holders of power of attorney on behalf of the company. .... .... Petitioner/s Versus 1. The Commissioner of Central Excise, Patna, 5th Floor, Central Revenue Building, Birchand Patel Marg, Patna -1 2. Assistant Commissioner, Central Excise, Laheriasarai, (Darbhanga) .... .... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Ramesh Kumar Agrawal and Mr. Anupa Nand Jha, Advocates. For the Respondent/s : Mrs. Nivedita Nirvikar and Mrs. Archana Sinha, Advocates. ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE JYOTI SARAN ORAL ORDER (Per: HONOURABLE THE CHIEF JUSTICE) 4. 13.05.2011. With the consent of the learned Advocates, the petition is heard and decided today. This petition under Article 226 of the Constitution is filed by a manufacturer to challenge the order dated 23rd Patna High Court CWJC No.4125 of 2011 (4) dt.13-05-2011 2 December 2010 made by the Assistant Commissioner, Central Excise Division, Laheriasarai under Order No. 2/10-C. Ex/Asstt. Commr/L’sarai/2010-11. The petitioner is a manufacturer of Sugar and also a manufacturer of Molasses, Ethanol and Rectified Spirit. For the months of July 2008 to May 2009, the petitioner calculated Education Cess and Higher Education Cess of Rs. 8,74,205.82 on the rectified spirit manufactured by it and reversed the entries for the like amount. Having realised that the petitioner was not liable to pay Education Cess or Higher Education Cess on the rectified spirit manufactured by it, on 20th November 2010 it claimed a refund of the said amount of Rs. 8,74,25.82. The Assistant Commissioner of Central Excise under the impugned order rejected the claim as time barred. The Assistant Commissioner did observe that the amount of Education Cess / Higher Education Cess was not required to be reversed. Nevertheless, he rejected the claim as it was made after lapse of the statutory period of one year from the relevant date. Therefore, the present Appeal. The learned Advocate Mr. Ramesh Kumar Agrawal has appeared for the petitioner. He has submitted that having agreed that the aforesaid sum of Education Cess and Higher Education Cess was not payable on the Rectified Spirit, the Assistant Commissioner ought to ordered refund of the said amount. The rejection of the claim as time barred was manifestly wrong. In support thereof, he has relied upon the judgment of the Hon’ble Supreme Court in the matter of Salonah Tea Co. Ltd. & Patna High Court CWJC No.4125 of 2011 (4) dt.13-05-2011 3 Ors. V. Superintendent of Taxes, Nowgong & Ors. [(1988) 1 SCC 4091]. In the said judgment the Hon’ble Supreme Court was considering the claim for refund of the amount of tax paid under mistake. The Court observed, “that taxes collected without the authority of law as in this case from a citizen should be refunded because no State has the right to receive or to retain taxes or moneys realised from citizens without the authority of law”. The petition is contested by learned Advocate Mrs. Nivedita Nirvikar. She has relied upon the counter affidavit made by Sri Mihir Ranjan, Joint Commissioner of Central Excise, Patna. She has also relied upon Section 11B of the Central Excise Act, 1944 (hereinafter referred to as `the 1944 Act’). She has submitted that Section 11B of the 1944 Act provides for limitation of period of one year for claiming the refund. In the present case, admittedly, the claim for refund was made by the petitioner after more than a year. The Assistant Commissioner has, therefore, rightly rejected the claim as time barred. She has also relied upon the Central Excise Tariff 2007-08. She has particularly relied upon Section 6 of the Provisional Collection of Taxes Act, 1931 (hereinafter referred to as `the 1931 Act’). She has submitted that under the said Section 6 of the 1931 Act, the provisions contained in the Finance Act, 2004 relating to levy of Education Cess on excise goods are incorporated. Section 93 thereof provides, “The Education Cess levied under section 91, in the case of goods specified in the First Schedule to the Patna High Court CWJC No.4125 of 2011 (4) dt.13-05-2011 4 Central Excise Tariff Act, 1985, being goods manufactured or produced, shall be a duty of excise …..”. In the submission of Mrs. Nirvikar, the Education Cess paid by the petitioner is a duty of excise within the meaning of the 1944 Act. The refund, if any, should have been claimed within one year from the relevant date. We are unable to agree with Mrs. Nirvikar. At first, she is not able to establish before us that the rectified spirit is one of the items specified in the First Schedule to the Central Excise Tariff Act, 1985 and that the petitioner was liable to pay Education Cess / Higher Education Cess on the rectified spirit manufactured by it; second, the Assistant Commissioner has in the impugned order admitted that the amount of Education Cess / Higher Education Cess was not required to be reversed by the petitioner. The Assistant Commissioner having accepted the fact that the amount of Education Cess / Higher Education Cess was not required to be reversed by the petitioner, the refund ought to have been a matter of course. The only question that arises for consideration is whether such a claim should have been rejected by the Assistant Commissioner on specious ground of limitation prescribed under Section 11B of the 1944 Act. Section 11B of the 1944 Act refers to claim for refund of duty. It provides that the claim for refund of any duty of excise will be made within one year from the relevant date. The opening words, “Any person claiming refund of any Patna High Court CWJC No.4125 of 2011 (4) dt.13-05-2011 5 duty of excise and interest having paid on such duty” disclose the legislative intent to confine the provision to the excise duty alone and not to any money not being the excise duty or the interest thereon. In our opinion, if the amount of Education Cess or Higher Education Cess was not payable by the petitioner, the said amount of Education Cess or Higher Education Cess cannot be said to be the excise duty within the meaning of the 1944 Act or the 1931 Act. The refund of the amount inadvertently paid under the head “Education Cess or Higher Education Cess” will not be governed by the limitation prescribed under Section 11B of the 1944 Act. As held by the Hon’ble Supreme Court in Salonah Tea Co. Ltd. & ors. (supra), the limitation, in such cases, would be three years as provided under Article 113 of the Limitation Act. Indisputably, the petitioner did make the claim for refund within the period of three years, such claim should not have been rejected by the Assistant Commissioner as time barred. We hold that the petitioner is entitled to refund of the amount of Rs. 8,74,205.82 reversed by him under the head Education Cess or Higher Education Cess on the Rectified Spirit manufactured by it. For the aforesaid reason, the petition is allowed. The respondents are directed to refund the aforesaid sum of Rs. 8,74,205.82 to the petitioner at the earliest, but not later than 30th June 2011. In the event the respondents fail to refund the amount as directed, the petitioner will be entitled to interest over the aforesaid sum of Rs. 8,74,205.82 at the rate of 10% per annum commencing Patna High Court CWJC No.4125 of 2011 (4) dt.13-05-2011 6 from 1st July 2011 till the date of payment. The parties will bear their own cost. Dilip ( R.M. Doshit, CJ ) ( Jyoti Saran, J )