Case: M/s. Dabur India Limited and Another Vs. State of Uttar Pradesh and Others

said Act show that multipoint tax on medicinal preparations containing alcohol was within the contemplation of the legislature otherwise there was no purpose in incorporating Section 4 into the Act. In this connection Section 4 of the 1955 Act may be referred to which is as follows: "4. Rebate of duty on alcohol, etc. supplied for manufacture of dutiable goods. - Where alcohol, narcotic drug or narcotic had been supplied to a manufacturer of any dutiable goods for use as an ingredient of such goods by, or under the authority of, the collecting government and a duty of excise on the goods so supplied had already been recovered by such government under any law for the time being in force, the collecting government shall, on an application being made to it in this behalf, grant in respect of the duty of excise, leviable under this Act, a rebate to such manufacturer of the excess, if any, of the duty so recovered over the duty leviable under this Act." * 26. In this case, however, the case of the petitioner is that duty has been recovered under the 1944 Act; if any refund has to be made, it must be made in accordance with law. There is a question of limitation for claiming refund of this duty. The provisions are not clear. In such a situation, it appears to us that the justice requires that provisions should be made more clear and in the view of the facts and the circumstances that have happened, we would direct that if the petitioners are entitled to any refund of the duty already paid to the Central Government in view of the duty imposition now upheld against them in favour of the State Government such refund application should be entertained and considered in accordance with law. We are conscious in giving this direction, we are not strictly following the letter and the provision of the Act. But in a case of this nature, where there is some doubt as to whether duty was payable to the Central Government under the 1944 Act or whether the item was dutiable under the 1955 Act, it would be just an proper and in consonance with justice in fiscal administration that the Central Government should consider in the light of the facts found, if an application is made under Section 11-B of the 1944 Act and pass appropriate order. Such application should be made within four months from the date of the judgment. In the facts and the circumstances of this case, the limitation period under Section 11-B of the 1944 Act should not apply. This direction, in our opinion, must be confined in the facts and the circumstances of this case only. 27. Our attention was drawn to the observation of this Court in Union of India v. Bombay Tyre International Ltd. in respect of the valuation. But the point not having been taken at any stage before the authorities, it is not proper for us at this stage to go into this question. We will proceed in view of the facts and the circumstances of this case and to do justice between the parties on the basis that the duty has been correctly imposed. We have looked into the order of the District Excise Officer, Ghaziabad and we find that all relevant facts have been considered and no facts were brought before us contrary to the findings nor any contentions of substance raised which can induce us to hold to the contrary. 28. Reference may also be made to the observations of this Court in Mohanlal Maganlal Bhavsar v. Union of India for the test to determine whether an item of medicinal preparation falls under Item 1 of the Schedule to the 1955 Act. It has been determined by the authorities enjoined to enforce that Act and such finding has not been assailed on any cogent or reliable ground in any proper manner. If that is the position, then that order must be upheld but it must be upheld that Homeodent was dutiable and as such the impugned order was correctly passed by the District Excise Officer. 29. Our attention was drawn to the observation of this Court in N. B. Sanjana, Assistant Collector of Central Excise v. Elphinstone Spinning and Weaving Mills Co. Ltd. But in view of the facts on which the parties rested their case before the authorities, it is not necessary at this stage to go into this controversy. 30. In the aforesaid view of the matter, we are of the opinion that the impugned order dated January 18, 1989 passed by the District Excise Officer, Ghaziabad, must be given effect to and thereafter the petitioners application for refund, if any, made before the authorities under Section 4 of the 1944 Act within the time indicated as before should be disposed of in the manner indicated above, if made. 31. Before we part with this case, two aspects have to be adverted to - one was regarding the allegation of the petitioner that in order to compel the petitioners to pay which the petitioners contented that they were not liable to pay, the licence was not being renewed for a period and the petitioner were constantly kept under threat of closing down their business in order to coerce them to make the payment. This is unfortunate. We would not like to hear from a litigant in this country that the Government is coercing citizens of this country to make payment of duties which the litigant is contending not to be leviable. Government, of course, is entitled to enforce payment and for that purpose to take all legal steps but the government. Central or State, cannot be permitted to play dirty games with the citizens of this country to coerce them in making payments which the citizens were not legally obliged to make. If any money is due to the government, the government should take steps but not take extra-legal steps or manoeuvre.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]26. In this case, however, the case of the petitioner is that duty has been recovered under the 1944 Act; if any refund has to be made, it must be made in accordance with law. There is a question of limitation for claiming refund of this duty. The provisions are not clear. In such a situation, it appears to us that the justice requires that provisions should be made more clear and in the view of the facts and the circumstances that have happened, we would direct that if the petitioners are entitled to any refund of the duty already paid to the Central Government in view of the duty imposition now upheld against them in favour of the State Government such refund application should be entertained and considered in accordance with law. We are conscious in giving this direction, we are not strictly following the letter and the provision of the Act. But in a case of this nature, where there is some doubt as to whether duty was payable to the Central Government under the 1944 Act or whether the item was dutiable under the 1955 Act, it would be just an proper and in consonance with justice in fiscal administration that the Central Government should consider in the light of the facts found, if an application is made under Section 11-B of the 1944 Act and pass appropriate order. Such application should be made within four months from the date of the judgment. In the facts and the circumstances of this case, the limitation period under Section 11-B of the 1944 Act should not apply. This direction, in our opinion, must be confined in the facts and the circumstances of this caseOur attention was drawn to the observation of this Court in Union of India v. Bombay Tyre International Ltd. in respect of the valuation. But the point not having been taken at any stage before the authorities, it is not proper for us at this stage to go into this question. We will proceed in view of the facts and the circumstances of this case and to do justice between the parties on the basis that the duty has been correctly imposed. We have looked into the order of the District Excise Officer, Ghaziabad and we find that all relevant facts have been considered and no facts were brought before us contrary to the findings nor any contentions of substance raised which can induce us to hold to theReference may also be made to the observations of this Court in Mohanlal Maganlal Bhavsar v. Union of India for the test to determine whether an item of medicinal preparation falls under Item 1 of the Schedule to the 1955 Act. It has been determined by the authorities enjoined to enforce that Act and such finding has not been assailed on any cogent or reliable ground in any proper manner. If that is the position, then that order must be upheld but it must be upheld that Homeodent was dutiable and as such the impugned order was correctly passed by the District ExciseOur attention was drawn to the observation of this Court in N. B. Sanjana, Assistant Collector of Central Excise v. Elphinstone Spinning and Weaving Mills Co. Ltd. But in view of the facts on which the parties rested their case before the authorities, it is not necessary at this stage to go into thisIn the aforesaid view of the matter, we are of the opinion that the impugned order dated January 18, 1989 passed by the District Excise Officer, Ghaziabad, must be given effect to and thereafter the petitioners application for refund, if any, made before the authorities under Section 4 of the 1944 Act within the time indicated as before should be disposed of in the manner indicated above, ifBefore we part with this case, two aspects have to be adverted to - one was regarding the allegation of the petitioner that in order to compel the petitioners to pay which the petitioners contented that they were not liable to pay, the licence was not being renewed for a period and the petitioner were constantly kept under threat of closing down their business in order to coerce them to make the payment. This is unfortunate. We would not like to hear from a litigant in this country that the Government is coercing citizens of this country to make payment of duties which the litigant is contending not to be leviable. Government, of course, is entitled to enforce payment and for that purpose to take all legal steps but the government. Central or State, cannot be permitted to play dirty games with the citizens of this country to coerce them in making payments which the citizens were not legally obliged to make. If any money is due to the government, the government should take steps but not take extra-legal steps or manoeuvre.