The court emphasized the importance of exhibiting a judicial approach and adhering to fundamental principles of the Indian legal system in arbitration decisions.

1. Heard learned Counsel for the parties.

2. This arbitration petition challenges an award passed by a Sole Arbitrator in a reference arising out of a contract for manufacture and supply of Glued Insulated Rail Joints of particular type and quantity as per an order placed by General Manager, Western Railway on the Petitioner. The disputes between the parties involve a claim for reimbursement of excise duty paid by the contractor, the Petitioner herein, for the rail joints manufactured and supplied for the Respondent-Union of India.

3. In pursuance of an invitation to tender issued by the Respondent herein, the Petitioner gave its offer of manufacture and supply of rail joints. A purchase order was placed by the Respondent on the Petitioner, accepting its tender. The purchase order provided that, as of that date, no excise duty was payable on the goods, but if any duty became applicable by the time of the dispatch, the same would be reimbursed by the Respondent, subject to production of documentary evidence of payment of such duty. According to the purchase order, for this purpose, excise duty would be considered as 16 per cent; any variation due to increase in turnover was not to be applicable. It is the case of the Petitioner that it supplied the requisite quantities of glued insulated rail joints to the Respondent, paying excise duty in the sum of Rs.8,07,340/-. It produced documentary proof of having made such payment, in the form of a certificate issued by the Superintendent, Central Excise, Range III, Kota (Rajasthan) dated 16 October 2003. Out of this amount, a sum of Rs.3,66,336/- was reimbursed to the Petitioner by the Respondent in March 2003, leaving a balance of Rs.4,41,004/-. The Respondent contested the Petitioner's claim for reimbursement of this balance. As a result, disputes arose between the parties, which were referred to the sole arbitrator, who was the Deputy Chief Engineer, Planning, Western Railway. The claims referred were as per a submission made by General Manager, Western Railway, who was the appointing authority. These were contractor's claims for sums of Rs.4,41,004/- towards excise duty and of Rs.1,04,400/- towards fabrication and transport charges. As for railways, their counter claim was said to be of nil amount. It was in accordance with this submission that the learned arbitrator adjudicated the reference. The arbitrator, in his impugned award, not only disallowed the Petitioner's claim for balance reimbursement of Rs.4,41,004/-, but even allowed refund of the reimbursement of Rs.3,66,336/- already made by the Respondent. Both these aspects have been challenged in the present petition.

4. The Petitioner claimed reimbursement on the basis that fabrication of glued rail joints was covered under subheading 8530 of Central Excise Tariff Act, 1985, in which there was no exemption of excise duty at the relevant time and accordingly, the Petitioner had paid the applicable excise duty. The Petitioner produced documentary evidence of having paid the duty. The Petitioner also relied upon a judgment of Customs, Excise and Gold (Control) Appellate Tribunal in the case of Dynamic Engineers & Madan Mohan Gupta Vs. CCE Jaipur, delivered on 16 January 2001, by which classification by the excise authorities of GIR Joints, that is to say, goods involved in the present petition, under tariff item 8530 of the Schedule to the Central Excise Tariff Act, 1985, was accepted as correct. Despite the Petitioner having thus made out a case of classification of the subject goods under tariff item 8530 and having paid duty there under, the learned arbitrator held that glued joints, which were articles of iron or steel, were liable to be termed as construction material for railway or tramway falling within Chapter 73 and particularly, subheading 7302 of Central Excise Tariff Act, 1985 and were, accordingly, entitled to exemption from payment of excise duty under subheading 7302 under Notification No.3/2001C. E. 1st Ma