Arbitral award on excess excise duty refund upheld where evidence supported findings and adverse inference was justified.

An arbitral award directing refund of excess excise duty, with interest and costs, was upheld because the challenge failed to dislodge the factual basis of the arbitrator's findings. After withdrawal of the letter enhancing duty, the contractual position reverted to the original rate, yet the higher duty continued to be charged. The court also accepted the arbitrator's adverse inference from the respondent's non-production of material evidence on Modvat benefits and raw material purchase dates. In proceedings under sections 30 and 33 of the Arbitration Act, 1940, the court refused to reappraise evidence as on appeal and found no ground to interfere with the award.

---

---

Issues: Whether the arbitral award granting refund of excess excise duty with interest and costs was liable to be set aside on the ground that the letter enhancing the duty and referring to Modvat was later withdrawn.

Analysis: The challenge was examined on the contractual terms and the material placed before the arbitrator. On the withdrawal of the letter dated 5 June 1986, the contractual position reverted to the original rate, yet the higher rate of excise duty continued to be charged. The Court also accepted the arbitrator's approach that the respondent had withheld relevant information regarding Modvat benefits and had not produced material to show the actual dates of purchase of raw material or to disprove the benefit claimed under the scheme. In proceedings under sections 30 and 33 of the Arbitration Act, 1940, the Court found no basis to reappraise the evidence as if sitting in appeal.

Conclusion: The objection to the award was rejected and the award allowing refund of excess excise duty, interest and costs was upheld.

Final Conclusion: The arbitral determination on entitlement to refund was left undisturbed, and the award was made rule of the Court with interest as directed.

Ratio Decidendi: A court dealing with objections to an arbitral award under sections 30 and 33 of the Arbitration Act, 1940 will not interfere where the award is supported by evidence and the objector fails to dislodge the factual basis of the arbitrator's findings, including findings drawn from adverse inference for non-production of material evidence.

---