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1989 Supreme(Pat) 33
PATNA HIGH COURT
S.B.Sinha, J.
Tata Iron And Steel Company Limited
Versus
Union Of India
Appeal from Original Decree No. 102 of 1977 ;
Decided On : JANUARY 31, 1989
Headnote:
CENTRAL EXCISE AND SALT ACT - EXEMPTION NOTIFICATION - INTERPRETATION - CIVIL COURT JURISDICTION - MAINTAINABILITY OF SUIT - REMAND FOR RETRIAL - FACT OF THE CASE - FINDING OF THE COURT - ISSUES - RATIO DECIDENDI - FINAL DECISION
Fact of the Case:
The plaintiff, a manufacturer of steel ingots, filed two suits for recovery of excise duty paid on steel ingots manufactured from old steel skull scraps. The plaintiff claimed exemption from excise duty under a notification issued by the Central Government, which exempted steel ingots manufactured from old iron and steel scraps or scraps obtained from duty-paid steel ingots or products. The defendants, the Central Excise Department, denied the exemption and contended that the notification was not applicable to the plaintiff's case. The trial court dismissed both suits, holding that the notification was not applicable and that the plaintiff had not been able to prove its claim.
Finding of the Court:
The High Court held that the trial court erred in its interpretation of the notification. The court held that the notification was clear and unambiguous and that it applied to the plaintiff's case. The court also held that the trial court erred in rejecting the plaintiff's evidence and that the plaintiff had been able to prove its claim to some extent. The court remanded the case to the trial court for retrial, directing the trial court to consider all the evidence and to determine the amount of exemption that the plaintiff was entitled to.
Issues: 1. Whether the civil court has jurisdiction to entertain a suit for refund of excise duty? 2. Whether the exemption notification issued by the Central Government is applicable to the plaintiff's case? 3. Whether the plaintiff has been able to prove its claim for exemption from excise duty?
Ratio Decidendi: 1. The civil court has jurisdiction to entertain a suit for refund of excise duty, as the Central Excise and Salt Act does not expressly or impliedly bar the jurisdiction of the civil court. 2. The exemption notification issued by the Central Government is clear and unambiguous and applies to the plaintiff's case. The notification exempts steel ingots manufactured from old iron and steel scraps or scraps obtained from duty-paid steel ingots or products. The plaintiff has been able to prove that it manufactured steel ingots from old steel skull scraps, which are covered by the exemption. 3. The plaintiff has been able to prove its claim for exemption from excise duty to some extent. The plaintiff has produced evidence of the quantity of old steel skull scraps that it used to manufacture steel ingots, and the amount of excise duty that it paid on those steel ingots.
Final Decision: The High Court remanded the case to the trial court for retrial, directing the trial court to consider all the evidence and to determine the amount of exemption that the plaintiff was entitled to.
Satya Brata Sinha, J.
1. Both these appeals were heard together and are being disposed of by this common judgment. First Appeal No. 102 of 1977 (R) arises out of a judgment and decree dated 20th December, 1976 passed by Shree J.K. Prasad, First Additional Subordinate Judge, Jamshedpur in Money Suit No. 61 of 1966, whereby and whereunder, the said learned court dismissed the plaintiff-appellants suit. The said suit was filed by the plaintiff, inter alia, for recovery of a sum of Rs. 41,79,141.68 paisa and therein it prayed for following reliefs:-
(i) A declaration that the Central Excise and Salt Act of 1944 and the Rules thereunder are invalid in so far as they impose the obligation of payment of duty on articles as a condition of their removal without any machinery or procedure for assessment of disputed liabilities.
(ii) A direction to the defendants to refund the disputed amount of Rs. 41,79,141.68 of Excise Duty levied which has been collected from the plaintiff along with interest at the rate of 6 per cent per annum from the date of the institution of the suit till date of realisation.
(iii) A decree quashing the aforesaid orders passed (a) by the Assistant Collector of Central Excise, Jamshedpur;
(b) by the Collector for Central Excise, Patna and
(c) by the Government of India in the Ministry of Finance.
(iv) A direction cancelling the debit made in the current account of the plaintiff in respect of duty levied on steel ingot produced out of old steel skull scraps.
(v) A decree for the costs of the suit may also be passed against the defendants with future interest.
(vi) Such other reliefs as may appear fit and proper.
2. First Appeal No. 14 of 1979 (R) arises out of a judgment and decree dated 11th September, 1978 passed by Shree Ram Chandra Prasad, Second Additional Subordinate Judge, Jamshedpur, in Money Suit No. 62/2 of 1966/ L976. In the said suit, the plaintiff-appellant prayed for following reliefs:-
(i) A declaration that the Central Excise and Salt Act, 1944 and the Rules thereunder are invalid in so far as they impose the obligation of payment of duty on articles as a condition of their removal without any machinery or procedure for assessment of disputed liabilities.
(ii) A decree quashing the orders passed (a) by the Assistant Collector of Central Excise, Jamshedpur;
(b) by the Collector of Central Excise, Patna and
(c) by the Government of India in the Ministry of Finance referred to above,
(iii) A direction to the defendants to refund the disputed amount of Rs. 2,80,593.44 of Excise Duty levied which has been collected from the plaintiff along with interest at the rate of 6% per annum from the date of the institution of the suit till date of realisation.
(iv) Issue of directions cancelling the debit made in the current account of the plaintiff in respect of duty levied on steel ingot produced out of scrap obtained from paid steel ingots and products.
(v) A decree for costs of the suit with future interest.
(vi) Such other reliefs as may appear fit and proper.
3. Suffice it to say, in both the suits the allegations made in the plaint are identical. As the facts of the cases have been stated in details in the impugned judgments of the learned trial court, it is not necessary to deal with the facts of case in great details. According to the plaintiff, it manufactures steel ingots out of the iron and steel scraps collected from their slag dump. It is an admitted case of the parties that the Central Government in exercise of its power conferred upon it under Rule 8 Sub-rule 1 of Central Excise Rules of 1944 issued a Notification dated 24-4-1962 bearing No. G.S.R. 7:5 of 1962, whereby and whereunder, certain exemption was granted in respect of payment of excise duties on steel ingots if the manufacture thereof is made out of duty paid pig iron or out of old Iron and steel scraps obtained from duty paid products.
4. According to the plaintiff, it had been manufacturing steel ingots from duty paid steel scr
