2010 (6) TMI 711

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.... as such the detention orders passed on failure of the petitioners to pay the amount of excise duty levied on the goods, are liable to be quashed and set aside. 3. In Writ Petition No. 3860/1993, the Aurangabad Paper Mills Ltd. Manufactures craft paper, which is exempt from excise duty. During the manufacturing process, a by-product - "Sodium Rosinate" is produced. The said product is used in the manufacture of craft paper. A show cause notice demanding excise duty on the said product for the period between 1986 to February, 1987 was issued by the Superintendent of Central Excise. The said demand came to be confirmed by the Collector. The said proceeding was carried by the petitioner to the Customs, Excise & Gold (Control) Appellate....

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....n the petitioner to pay an amount of Rs. 2,58,056/- along with penalty of Rs. 45,000/- i.e. total Rs. 3,03,056/-. Being aggrieved thereby, the said writ petition has been filed. 4. Shri Sharma, learned counsel appearing on behalf of the petitioner submits that since the learned CEGAT has held that the produce of Sodium Rosinate is not liable for payment of Excise duty, the authorities of the Central Excise have erred in passing the detention order. He submits that when the produce is held not liable to payment of Excise duty in one proceeding, the authorities could not have imposed the Excise duty on the said product. 5. It would be relevant to note that the Special Bench of CEGAT vide order dated 25th October, 1991 has held....

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....ejudice to public interest but is offensive to several well established principles of law. It also leads to grave public mischief. Section 72 of the Contract Act, or for that matter Section 17(1)(c) of the Limitation Act, 1963, has no application to such a claim for refund." 7. In the present cases, the petitioners have accepted the adjudicatory orders and not preferred appeals challenging the same. In that view of the matter, merely because subsequently in the year 1991, the learned CEGAT has held that the said product "Sodium Rosinate" is not assessable to payment of Excise duty, cannot entitle the petitioners, as a matter of right, to the benefit of the said judgment. Merely because some matters were pending before the learned CE....