Back
High Court Of Calcutta
Ruma Pal
INDO METAL INDUSTRIES - Appellant
Versus
ASSTT.COLLECTOR OF CENTRAL EXCISE - Respondent
Matter 922 Of 1991
Decided On : 12/20/1991
CENTRAL EXCISE - REFUND - EXCISE DUTY PAID ON GOODS CLASSIFIED UNDER TARIFF ITEM NO. 50 OF THE FIRST SCHEDULE TO THE CENTRAL EXCISES AND SALT ACT, 1944 - GOODS SUBSEQUENTLY CLASSIFIED UNDER TARIFF ITEM NO. 26AA (IA) OF THE FIRST SCHEDULE TO THE ACT - WHETHER THE PETITIONER ENTITLED TO REFUND OF EXCISE DUTY PAID - HELD, YES.
Fact of the Case:
The petitioner, engaged in the business of copper coating and coiling of welding wires, anodizers, and electro-platings, had its goods seized by the Excise Authorities in 1975 for carrying on business in violation of the provisions of the Central Excises and Salt Act, 1944 (the Act). The goods were classified under Tariff Item No. 50 of the First Schedule to the Act, and the petitioner challenged this classification through various appeals. The Customs, Excise, and Gold (Control) Appellate Tribunal (CEGAT) eventually held that the goods did not fall under Tariff Item No. 50 and directed the Department to consider classifying them under Tariff Item 26aa (ia) or Item 68 of the First Schedule. The petitioner applied for reclassification and refund of excess Central Excise duty paid, but the Assistant Collector rejected the application. The petitioner filed a writ petition, which was disposed of with a direction to the adjudicating authority to reconsider the refund application on merits. The Assistant Collector, upon reconsideration, rejected the refund claim on the ground that the petitioner was not the actual payer of Central Excise duty, but the ultimate consumer of the goods.
Finding of the Court:
The court held that the petitioner was entitled to a refund of the excess Central Excise duty paid on the goods, as the goods were ultimately classified under Tariff Item 26aa (ia) of the First Schedule to the Act. The court rejected the Assistant Collector's contention that the petitioner was not the actual payer of Central Excise duty, holding that the petitioner was the assessee who had paid the duty to the Excise Authorities, and that the refund was due to the petitioner by virtue of the order of CEGAT.
Issues: 1. Whether the petitioner was entitled to a refund of the excess Central Excise duty paid on the goods. 2. Whether the Assistant Collector was justified in rejecting the refund claim on the ground that the petitioner was not the actual payer of Central Excise duty.
Ratio Decidendi: 1. The court held that the petitioner was entitled to a refund of the excess Central Excise duty paid on the goods, as the goods were ultimately classified under Tariff Item 26aa (ia) of the First Schedule to the Act. The court relied on the provisions of Section 11b of the Act, which provides for the refund of excise duty paid in excess of what was lawfully due. The court also relied on various judicial precedents holding that the manufacturer who pays excise duty is entitled to a refund if the duty is subsequently found to be excessive. 2. The court held that the Assistant Collector was not justified in rejecting the refund claim on the ground that the petitioner was not the actual payer of Central Excise duty. The court held that the petitioner was the assessee who had paid the duty to the Excise Authorities, and that the refund was due to the petitioner by virtue of the order of CEGAT.
Final Decision: The court allowed the writ petition, set aside the impugned order of the Assistant Collector, and directed the respondents to grant a refund of Rs. 10,70,973.04 to the petitioner within 15th January 1992.
( 1 ) THE subject matter of this writ application is an order dated 6th March 1991 passed by the Assistant Collector of Central Excise Calcutta rejecting the petitioner's application for refund of monies paid by the petitioner to the Excise Authorities in excess of what was lawfully due.
( 2 ) THE petitioner carries on business of copper coating and coiling of welding wires, anodizers and electro-platings (hereinafter referred to as the goods ). In 1975 the Excise Authorities conducted a raid on the petitioner's factory and seized the goods on the ground that the petitioner was carrying on business in violation of the provisions of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act ). Proceedings were commenced against the petitioner and an adjudication order was passed classifying the goods produced by the petitioner under Tariff Item No. 50 of the First Schedule of the Act as it then stood. The petitioner preferred an appeal from the adjudication order. The appeal was rejected. The petitioner preferred a further appeal to the Customs, Excise and Gold (Control) Appellate Tribunal (referred to as CEGAT) against the order of the Appellate Collector. The Tribunal held that the goods did not fall under the Tariff Item No. 50 of the First Schedule to the Act. The Order of the Appellate Collector was accordingly set aside. The Department was given the option to consider classification of the goods either under Tariff Item 26aa (ia) or Item 68 of the First Schedule to the Act.
( 3 ) BY letters dated 7-12-1983, 17-12-1983, 4-1-1984 and 1-2-1984 the petitioner prayed for reclassification of the goods and consequent refund of excess Central Excise duty paid by the petitioner.
( 4 ) THE Excise Authorities, however, preferred an appeal from the order of the Tribunal before the Supreme Court. By an order dated 27-2-1984 the Supreme Court dismissed the appeal. During this entire period the petitioner had continued to pay excise duty on the goods on the basis that they were excisable under Tariff Item No. 50 of the Schedule to the Act under protest.
( 5 ) ON 3rd December 1986, the Assistant Collector classified and approved the Classification List submitted by the petitioner in respect of the goods for the periods 1-3-1986 to 21-3-1986 and from 1-4-1986 onwards. The goods were classified under Heading No. 7213. 90 of the Schedule to the Central Excise Tariff Act, 1986 (hereinafter referred to as the 1986 Act) being equivalent to Tariff Item No. 26aa (ia) of the erstwhile First Schedule to the Act.
( 6 ) ON 25-2-1987 the petitioner filed an application for refund claiming the refund of the Central Excise duties which had been paid by the petitioner on the basis that the goods were classifiable under Item No. 50 of the erstwhile First Schedule to the Act. By an Order dated 1/23-8-1989, the Assistant Collector rejected the petitioner's application. The petitioner preferred an appeal from the order of rejection. The appeal was allowed by the Collector of Central Excise (Appeals) on 11-4-1990. The Assistant Collector was directed by the Collector to "reconsider the case of the appellant for refund on merits in the light of the clear orders of the CEGAT".
( 7 ) NO steps were however taken by the Assistant Collector to comply with the orders of the Collector (Appeals ). By letters dated 25-4-1990, 12-6-1990 and 12-7-1990, the petitioner wrote to the Assistant Collector to dispose of the petitioner's application for refund. The Assistant Collector did not respond. Being aggrieved by the inaction on the part of the Assistant Collector, the petitioner filed a writ petition before this Court (referred to as the first writ petition) for inter alia a direction on the respondents to consider the petitioner's application for refund. The first writ petition was disposed of by an order dated 12-2-1991 by this court. That order provides as follows:"this application is disposed of by directing the adjudicating autho
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
