By TIOL News Service

MUMBAI, JAN 23, 2017: PETITIONS have been filed praying for issuance of a writ of certiorari in relation to an order-in-original dated 16th September 2016, of the Dy. Commr. CE&ST, LTU, Mumbai.

Background: The order of CESTAT was set aside and it was held that the product "clinker" which was captively consumed is covered by this Excise Notification [67/95-CE]. It is based on the final order of the Supreme Court that the claim for refund was laid. It was stated that duty was paid on captively consumed clinker. The petitioner pointed out the details of availment of cenvat credit during the period under reference on a purely protective basis as claimed and the payments of duty under protest. The declaration was that no refund on this account has been claimed / received earlier. It is also declared that the duty in respect of which refund has been claimed has not been charged to nor realised from any customers or from any other person and hence it is refundable only to the petitioners in terms of the proviso to section 11B (2) of the Central Excise Act, 1944.

The order of the Dy. Commissioner sanctions a refund of Rs.652,41,66,464/- but directs that this sum shall be credited to the Consumer Welfare Fund since the same is held to be hit by unjust enrichment. Similar is the fate of another refund claim of Rs.276,68,53,222/-.

The ASG raised a preliminary objection that given the nature of the findings and which are purely factual or, in any event, factual and legal, a writ petition under Article 226 of the Constitution of India should not ordinarily be entertained. Inasmuch as since the refund claim is rejected by the Deputy Commissioner and there are multiple remedies to challenge this order,the High Court should not entertain the writ petition(s).

The petitioners justified the writ petitions by relying upon a host of case laws viz. Suvidhe Limited - 2003-TIOL-188-HC-MUM-CX, Finacord Chemicals (India) Limited = 2015-TIOL-104-SC-CUS,Allied Photographics (India) Limited = 2004-TIOL-27-SC-CX , Aircel Limited - 2016-TIOL-90-SC-CT, where it is inter alia held that when there are pure questions of law they could be gone into in writ jurisdiction.

After considering the elaborate submissions made, the High Court extracted the provisions of section 11B of the CEA, 1944 and inter alia observed -

++ We are of the opinion that the findings rendered by the Deputy Commissioner are not only by considering some legal aspect which may arise during the course of dealing with factual matters and brought before him. These are findings rendered purely on the correctness of the approach of the petitioner-manufacturer. The basis on which the claim was made, the maintenance of accounts and practices prevailing in the market and particularly amongst manufacturers of cement are all referred to with a view to ascertain whether there is substantiation by the petitioner of its claim that it has not passed on the liability or incidence of duty on to the consumer.

++ It is in relation to that, that the parties entered into detailed correspondence and produced voluminous documents. That is how the contents thereof have been analysed. They may not have been analysed strictly in accordance with the prevailing legal principles, according to the petitioners and emerging from precedents. They may or may not have been correctly applied, but surely this is not a matter which we can hold as raising only pure questions of law.

++ This is not an issue which we can decide only by considering whether any erroneous test of law has been applied. We will have to go into all the factual aspects and then alone find out which legal principle has application and the one that is applied was not applicable or otherwise. It is not that as an absolute proposition of law that the impugned order holds that assessee like the petitioners can avail of the refund provided a particular treatment is given in the accounts and essentially in the Profit & Loss Account. It is not whether the same has to be reflected only as receivable and there is no requirement to show that as a debit or a liability in the columns in that regard that has gone into consideration in the case before us. There are various principles of accounting and which have been invoked and applied, may be, according to the petitioners, erroneously. However, we do not think that such factual matters can be resolved by us in our limited jurisdiction and when it is not disputed that the alternate remedies are equally efficacious.

++ Once we have seen that this is not a case entirely based on refund of amounts deposited as pre deposit but there was a blend or mix of such sums with the amount paid under protest, then, all the more we do not think that the judgments on the point of a writ being maintainable despite availability of alternate efficacious remedy would be applicable in the facts of this case.

++ We are mindful of the fact that availability of an alternate equally efficacious remedy is not an absolute bar in entertaining a writ petition under Article 226 of the Constitution of India. It is not a prohibition but a rule of caution and prudence. Eventually everything must depend on facts and circumstances in each case.

++ We are of the opinion that these petitions cannot be entertained on the ground that there are factual issues involved. The mixed questions of fact and law are, therefore, capable of being properly resolved in the appellate remedies available to the petitioners under the scheme of the Central Excise Act.

The High Court also clarified that it has not expressed any opinion on the factual and legal controversy or for that matter on the merits of the refund claim and they are all kept open.

The Writ petitions were disposed of.

(See 2017-TIOL-162-HC-MUM-CX)