TaxTMI 
TaxTMI 
1981 (4) TMI 267
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....ing powder. The basic ingredients of phenolic resin are Phenol and Formaldehyde. The Phenolic Resin is the result of Phenol and Formaldehyde being reacted with each other. The Phenolic Moulding Powder is manufactured by processing phenol formaldehyde synthetic resin along with other ingredients like fillers, colouring matter, etc. While manufacturing phenolic moulding powder, the phenolic resin is not blended with any other artificial or synthetic resins. 3.  Prior to June 1, 1971, the phenolic resin was assessed for the purposes of excise duty under Item No. 15-A of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as the `Act') read with Notification dated September 23, 1965. The relevant portion of the said Item No. 15-A is as under :- '15A. Artificial or Synthetic Resins and Forty per cent Plastic Materials and Articles thereof.- Ad valorem (1) Artificial or synthetic resins and plastic materials in any form, whether solid, liquid, or pasty, or as powder, granules or flakes, or in the form of moulding ....
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.... ad valorem Explanation : For the purpose of this notification. (1)  X X   X   X   X (2)  X X   X  X   X (3) The expression 'Phenolic Resins' means synthetic resins manufactured by reacting any of the phenole with an aldehyde and includes chemically modified phenolic resins and liquid phenolic resins but does not include blends of the phenolic resins with other artificial or synthetic resins." 5.  The petitioners claim that the phenolic moulding powder manufactured by the petitioners falls within Item 3 read with Explanation III of the Notification. The petitioners claim that the phenolic moulding powder is phenolic resin in the form of moulding powder. The petitioners further claim that though the petitioners were entitled to exemption in respect of payment of excise duty on the manufacture of phenolic moulding powder, the Excise Department wrongfully and illegally levied and recovered from the petitioners a sum of Rs. 74,96,740.80 from June 1, 1971 till August 24, 1974. The petitioners by their letter dated August 24, 1974 made an application for refund of the excise duty recovered by the respondents for the period from ....
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....on, Shri V.N. Kullarwar, Assistant Collector of Central Excise, Bombay Division, filed a return sworn on April 25, 1979. By this return, it was contended that the phenolic moulding powder is neither a phenolic resin in pure form, nor a chemically modified resin but is a physically modified compound of phenolic resin with other materials like fillers, colouring matter etc. It was claimed that the petitioners are not entitled to the advantage of the Notification dated June 1, 1971. The respondents also filed an Affidavit of Shri T.R.S. Krishnan, Deputy Chief Chemist, Central Excise Laboratory, Bombay, sworn on April 25, 1979. Dr. Krishnan claimed that phenolic moulding powder is a plastic material and, in any event, is not a chemically modified phenolic resin but is a physically modified phenolic resin. In paragraph 13 of this affidavit, Krishnan gave his opinion that the product is not a pure "Straight" phenolic resin. The petitioners filed joint affidavit-in-rejoinder of petitioner No. 2, and Dr. S.P. Potnis and Dr. R.M. Thakkar. The affidavit sworn on July 16, 1979 reiterates that phenolic moulding powder is a phenolic resin and/or a chemically modified phenolic resin. In the affi....
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....se, the petitioners by letter dated October 14, 1977 informed the Assistant Collector that the report is not accurate and the view of Shri Krishnan is clearly erroneous. In support of the contention that the product is chemically modified phenolic resin, the research carried out by the Department of Chemical Technology, University of Bombay was relied upon. The petitioners also requested that Shri Krishnan should be tendered for cross-examination to establish that his report was not accurate. Accordingly, Shri Krishnan was cross-examined at length by the petitioners before the Assistant Collector and Dr. Potnis was tendered in support of the claim that the phenolic moulding powder is entitled to exemption given under the Notification. The Assistant Collector of Central Excise thereafter gave his further report on September 3, 1979. The petition is posted thereafter before me for further hearing. 10.  Shri Sorabjee, the learned Counsel appearing in support of the petition, submitted that the product manufactured by the petitioners is (a) synthetic resin manufactured by reacting any of the phenols with an aldehyde and (b) chemically modified phenolic resin. Shri Sorabjee subm....
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....henolic resins' given in Explanation (3) to the Notification. It would be appropriate to quote the Explanation (3) once again to appreciate the submissions made by both the counsels in support of their claims : 'For the purpose of this Notification :- (1) X X X X X (2) X X X X X (3) the expression 'phenolic resins' means synthetic resins manufactured by reacting any of the phenols with an aldehyde and includes chemically modified phenolic resins and liquid phenolic resins but does not include blends of the phenolic resins with other artificial or synthetic resin.' The expression 'phenolic resins' given in Explanation can be advantageously divided into three parts: (1) synthetic resins manufactured by reacting any of the phenols with an aldehyde and includes (2) chemically modified phenolic resins and (3) liquid phenolic resins, but does not include blends of the phenolic resins with other artificial or synthetic resins. The latter portion of Explanation (3) excluding blending with artificial or synthetic resin is not applicable to the facts of the present case. Both Shri Kullarwar and Shri Krishnan who filed affidavits in answer to the petition have admitte....
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....ts, or other compound ingredients and that can retain the new solid often rigid shape under conditions of use. (2) any of a large group of materials of high molecular weight that use, contain as the essential ingredient a synthetic or semi-synthetic organic substance made by polymerization or condensation (as polystyrene or a phenol formaldehyde resin) or derived from a natural material by chemical treatment (as nitrocellulose from cellulose), that are moulded, cast, extruded, drawn, or laminated under various conditions (as by heat in the case of thermoplastic materials, by chemical condensation in the case of thermo-setting materials or polyesters or by casting during polymerization of monomers) into object of all sizes and shapes including films and filaments." In Encyclopaedia Britannica, Volume 18, the following passage appears regarding 'plastics' : "PLASTIC' - The term 'plastic', derived from the Greek plastikes, appears to have been used first as a suffix implying growing, developing and forming. Later it was used as an adjective meaning capable of being formed. The manufacture of pottery and earthenware depends on the plastic qualities of the clay ; the making of ....
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....ticity or clastomers nor the very high crystallinity of most fibres. In the engineering sense, however, a plastic is a mixture containing one or more resins compounded with fillers, plasticizers, lubricants, dyes, etc. which has been subsequently fabricated." The Expression 'moulding powder' has been defined in the book 'The Condensed Chemical Dictionary (9th Edition) Revised by Gesener G. Hawley as under: "Plastic material in varying stages of granulation and comprising resin, fillers, pigments, plastic and other ingredients, ready for use in the said operation." 15.  Though large number of references from the standard books and dictionaries were pointed out by both the sides in respect of the words "plastic", 'resins' and 'moulding powder', no definition in regard to the 'phenolic moulding powder' was available. In Encyclopaedia Britannica, Volume 18, dealing with 'Plastics' to 'Resin' under the heading of 'Plastics' and sub-heading of 'Phenol-Formaldehyde Resins', the following passage appears :- "When Leo H. Backeland patented a phenol-formaldehyde resin in 1909, nitrocellulose plastics were being used extensively in the U.S. Yet this new material found a ready....
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....nolic resin and becomes a plastic material. I enquired from Shri Dhanuka as to whether his submission is supported by any passage from any other Text Book and the learned Counsel was unable to answer in the affirmative. Shri Dhanuka strongly relied upon the fact that 'phenolic resin' with the chemical properties of formaldehyde resins are considerably influenced by the moisture contained and that fact applies still more to plastic made from the resins by combination of fillers, plasticizers and other ingredients. It was urged that the basic component of phenolic moulding powder though is a phenolic resin by addition of other materials like plasticizers, fillers, wood flour etc., the end product ceases to be the phenolic resin but becomes a plastic material. Shri Sorabjee did not dispute that the end product 'moulding powder' is the result of the mixing of phenolic resin with other ingredients but submitted that mixing of such ingredients does not change the basic character of phenolic resin. The submission of Shri Sorabjee is supported by a passage on page 676 of the Condensed Chemical Dictionary by Aurther R. Ross, a copy of which is annexed at page 229 (i) in the compilation. The....
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....bserved on page 6 is that the product is called plastic material after it is formed to shape and the words 'after it is formed to shape' are very crucial. The phenolic resin can be obtained either in liquid form or in powder form. 'Phenolic moulding powder' cannot be termed as plastic material as long as powder is not used to form an article to shape. Mere powder has no shape and what the Author has observed on page 6 is that the product is called plastic material only after it is formed to shape. In my judgment, the submission that the phenolic moulding powder should be termed as plastic material is not correct. The book Encyclopaedia of Chemical Technology, Second Edition-1968 Volume 15, defines 'Phenolic Resins' in the following terms : - 'Phenolic resin' is a term that describes a wide variety of products resulting from the reaction of phenols with aldehydes. The Phenol aldehyde reaction product may be a liquid or a solution, a solid or a powder, and it may be pure resin or modified with fillers or polymeric compounds. Most phenolic resins are heat-hardenable or thermosetting.' Shri Dhanuka submits that the expression 'phenolic resin' must be restricted to pure resin and ....
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....y reacting a Phenol with an aldehyde, including Phenolic Moulding Powders. I crave leave to refer to and rely upon the relevant references from the Standard Text Books in support of the above statements. Relying upon these averments made in paragraph 29 (a) and (c) of the Affidavit-in-rejoinder, Shri Dhanuka claims that the petitioners have admitted that phenolic moulding powder is known or described as a plastic material. The submission is not correct for more than one reason. In the first instance, Dr. Potnis has nowhere admitted that phenolic moulding powder is a plastic material but what Dr. Potnis stated is that in technical reference books, the material is described as plastic material and the term 'phenolic resin' is synonymous and connotes synthetic resin in variety of forms. If the relevant paragraphs are read in its proper context, it is obvious that the petitioners or Dr. Potnis has nowhere admitted that the phenolic resin powder is a plastic material." 19.  In this connection, Shri Sorabjee relied upon the letter dated October 14, 1979 addressed by the petitioners to the Assistant Collector after Shri Krishnan made his report in pursuance of the order of this Co....
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....traight resin manufactured by reacting any of the phenols with an aldehyde. Query (b) : Whether the product is a chemically modified phenolic resin ? Answer : Material is an intimate mixture of phenolic resin which is registered hereunder No. 713 and described by the party as phenolic resin, 'A Stage' with fillers, pigments, additives, plasticizers, hexamine, accelerators etc. This process consists of intimate mixture of phenolic resin with fillers, hardners, neutralisers, lubricants, colouring matter, plasticizers to improve the physical properties of moulded articles. Such phenolic moulding powder can be considered as compounded or at best physical modified phenolic resin. This is phenolic resin modification intimately combined in the uncured or partially cured condition with fillers, pigments and dyes to obtain the properties desired. Query (c) : Whether the product is a blend of phenolic resins with other artificial or synthetic resin ? Answer : The product is not a blend of phenolic resin with other artificial or synthetic resin. Quary (d) : Whether the products fall in a c....
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.... Collector in his letter dated 17-9-1979 which you have answered by your letter addressed to the Assistant Collector and dated 18-9-1979. In item '8' you have at various stages used the word 'mixture', 'Compounded', 'combined'. In respect of the ingredients forming part of the moulding powder. Can you explain why different terms have been used ? Answer : The correct term would be mixture, the word compunded has become because the ingredients added are called compounding ingredients and the elastimers and plastimers technology. The masticated product is referred to as compound. So I used the word compound. The word combined has been used with idea just like water and milk when mixed together is called combined. I have used from that point because it is an homogenous mixture and not a hetrogenous mixture. Query 276 : In para 3 of item 'B' you have described the moulding powder as plastic material. Can you explain why ? Answer : Because it is told in the technology as plastics material. Query 277 : Are you now going by the definition of plastic as found in the Chemical Dictionary or in Encyclopaedia ? Answer : Based on Chemical Dictionary. ....
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....8 : I put it to you that study of the process at the factory could not tell you the individual ingredients or the present ingredients thereof which went into the moulding powder ? Answer : I have not gone to the percentage aspects. Nor I have given in the report. Whatever the factory showed that they were adding is corroborated with the Technology and I did not have any doubt whatsoever and hence I have incorporated in the report. Shri Sorabjee submitted that the answers given by Shri Krishnan clearly indicate that the witness relies solely upon the contents of Chemical Dictionary. Shri Sorabjee complains that the witness conceded that he was not a polymer chemist and he had not applied any test to find out the percentage of ingredients mixed with phenolic resin and, therefore, it is difficult to conclude that by adding certain ingredients, the characteristic of phenolic resin was lost and the end product became a plastic material. I find considerable merit in the submission of the learned Counsel. From the cross-examination of Shri Krishnan, it is clear that the witness was unable to sustain his claim that phenolic moulding powder was a plastic material. 23.&e....
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....he Assistant Collector of Central Excise in his report made in pursuance of the order of this Court has observed in paragraph 23 that the term 'synthetic resin' and 'plastics' is overlapping from the academic and research point of view but in common parlance, moulding powder is a plastic material and not phenolic resin. The Assistant Collector has relied upon an extract from Condensed Chemical Dictionary by J.G Hawley in support of this conclusion. The extract has already been quoted hereinabove and in my judgment, the Assistant Collector did not properly appreciate the exact connotation of the extract and has erroneously assumed that phenolic moulding powder is a plastic material. On the material produced on record both by the petitioners and the respondents, it is not possible to conclude that the phenolic moulding powder is a plastic material and is, therefore, excluded from the advantage of the notification. 25.  Shri Dhanuka, in this connection, invited my attention to the Evolution of Tariff Item No. 15-A and submitted that it would be appropriate to take into consideration the Legislative history in interpreting the nature and scope of the Notification dated June 1, ....
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.... nitrate. (2) Articles made of plastics, all sorts, including tubes, rods, sheets, foils sticks, other rectangular or profile shapes whether laminated or not, and whether rigid or flexible, including layflat tubings and Polyvinyl choloride sheets, Explanation. - For the purpose of sub-item (2) 'plastics' means the various artificial or synthetic resins or plastic material included in sub-item (1)." The existing Item No. 15-A was substituted by Finance Act No. 2 (Bill) of 1971. Shri Dhanuka submits that from 1961 till 1964, the expression "moulding powder" was included in the term "Plastic", while after 1964 the terms "Artificial or Synthetic Resins" and "Plastic Materials" were split up. Shri Dhanuka submits that on September 23, 1965, the Central Government in exercise of powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 issued a notification giving exemption to artificial and synthetic resins as specified in the Notification and one of the item was phenolic resin. 26.  Shri Dhanuka submits that in spite of grant of exemption in payment of duty from September 23, 1965, the petitioner never made any claim for exemption because the petitio....
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.... sense, but in the sense which people dealing with or commercially conversant would attribute. Shri Justice Tulzapurkar, as he then was, accepted the contention of the Company and held that the polymer chips are not plastic and while interpreting the meaning of the item in the Act, the meaning should be given according to the general usage as known to persons dealing with or commercially conversant with these items. 28.  Shri Dhanuka also relied upon the decision of the Delhi High Court in the case of J.K. Synthetics Ltd., Kota (Rajasthan) v. The Collector of Central Excise, Delhi (Civil Writ No. 115-D/63), decided on August 28, 1970 where an identical question as involved in Nirlon's case was considered and answered in favour of the Company. The decision in Nirlon's case was cited before the Delhi High Court and was approved. Shri Dhanuka submits that in trade circles, 'phenolic resin' and 'plastic' are treated as two different articles. It was further urged that moulding powder was never considered as plastic in the trade circles and the petitioners even did not consider so right till 1974 when the first refund application was filed even though the exemption Notification ....
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....also supports the claim of the petitioners that the product is known in the trade circle as phenolic moulding powder. 31.  It was urged on behalf of the petitioners that in spite of this positive evidence led by the petitioners to establish that the phenolic moulding powder is known in the trade and commercial circles as phenolic resin, the Assistant Collector in his report has made no reference to the same but has made an observation that phenolic resin and phenolic moulding powders are two different articles known in the trade. The grievance of Shri Sorabjee seems to be justified. The Assistant Collector in his report dated September 3, 1979 has made no reference to the evidence led by the petitioners, and has recorded a finding without any evidence on behalf of the Department. 32.  Shri Dhanuka made a faint attempt to submit that it should be held that in the trade circles, phenolic moulding powder is not known as phenolic resin but as plastic material for two reasons. First, as the petitioners themselves have not sought the exemption though available from September 23, 1965 till August, 1974. Non-action on the part of the petitioners, submits Shri Dhanuka, is a ....
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....ion on the part of the petitioners to claim exemption. In my judgment the petitioners have established that in the trade circle, the phenolic moulding powder manufactured by the petitioners is known as synthetic resin and the conclusion of the Assistant Collector that synthetic resin and moulding powder are two different articles known to the trade is incorrect. 34.  In this connection, it would be appropriate to make reference to the decisions of the Supreme Court in the case of Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise and Customs, Surat and others reported in 1978 ELT (J 350) = A.I.R. 1970 Supreme Court 755 and in Innamuri Gopalan and others v. State of Andhra Pradesh and another reported in 1964 (2) Supreme Court Reports 888. In Hansraj Gordhandas case reported in A.I.R. 1970 Supreme Court 755, 1978 ELT (J 350) the Supreme Court was considering the question as to the scope and ambit of exemption notification in respect of duty for cotton fabrics produced on powerlooms owned by Co-operative Society, Shri Justice Ramaswami, speaking for the Court, observed : "It is well established that in a taxing statute there is no room for any intendmen....
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....stage the item is phenolic resin. It was urged that the pure phenolic resin is compounded further with adding several ingredients and the end product takes different shapes having different identity and different use. It is claimed that once, the phenolic resin undergoes modification, it ceases to be pure phenolic resin and becomes a plastic material. It is not possible to accept this submission because it is not established by the Department that the end product 'phenolic moulding powder' loses the character of phenolic resin and becomes plastic material. Shri Dhanuka was unable to suggest the characteristics of phenolic moulding powder which are different from that of phenolic resin. In my judgment, the petitioners have succeeded in establishing that they are entitled to the advantage of exemption notification as the phenolic moulding powder is nothing but the phenolic resin manufactured by reacting of the phenols with an aldehyde. 35.  Before concluding discussion on this point, reference must be made to the submission of Shri Dhanuka that where two views are possible as regards the meaning and interpretation of entry in the Act, the Court should not disturb the view tak....
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....itioners also relied upon the letter dated March 5, 1975 addressed by Dr. R.T. Thampy to the petitioners in regard to their product of moulding powder. Dr. Thampy has mentioned in the letter, a copy of which is annexed as Ex. "G" to the petition, that moulding powder of the petitioners is mainly phenolic resin and it is obtained by chemically modified resins with ingredients like hexamine, lime, Mg-oxide and wood flour etc. In answer to the petition, Shri Kullarwar in his affidavit-in-reply has stated that phenolic moulding powder is a substance compounded consisting mainly of Phenol Formaldehyde Resin intimately combined with fillers, colouring matter, lubricants and plasticisers and this intimately mixed substance is a physically modified compound as distinguished from a chemically modified Phenolic resin. Shri Krishnan, in his affidavit-in-reply to the petition has reiterated the statements of Shri Kullarwar in paragraphs 4 and 8 of the affidavit. Shri Krishnan has further stated that in a chemical compound one cannot separate the ingredients by simple physical process whereas in a physically compounded articles, the ingredients can be separated by simple physical means. In the ....
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....ment was unable to separate phenolic moulding powder into its individual components. Shri Krishnan was cross-examined before the Deputy Collector on the issue and it would be interesting to set out questions and answers in this connection : Query 139 : Phenolic Moulding Powder is a chemical compound ? Answer : No. Query 140 : Have you got any book to show that phenolic moulding powder is not a chemical compound ? Answer : Yes, there is a book, "Plastics Materials" by Brydson III Edition Page 520. Query 141 : Point out from this book where has it been stated that Moulding Powder is not a chemical compound ? Answer : It is not so stated. Query 142 : Are there any other books ? Answer : Polymers & Resins by Golding, page 261. Query 143 : Where in the passage it is stated that Phenolic Moulding Powder is not a Chemical Compound ? Answer : Nowhere it is stated that Phenolic Moulding Powder is a Chemical Compound and nowhere it is stated that it is not a Chemical Compound. Query 144 : Merely because it is not stated in the books that it is not a chemical compound nor that it is a Chemical C....
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....ished by reaction of which, alone or in combination with or without pressure ? Answer : That definition is correct. Query 157 : In cure there is chemical reaction ? Answer : Curing for the purpose of chemistry, plastic, technology etc. does involve a chemical reaction. Query 158 : In partial curing, you want to suggest that no chemical reaction takes place? Answer : Very slight chemical reaction may or may not take place. Query 159 : For the purpose of partial curing the help of heat and catalyst may be taken ? Answer : Yes. Query 160 : In cure, you say that there is a chemical reaction. In partial cure it might be a partial chemical reaction ?, Answer : Yes. Query 161 : In partial curing there would be partial chemical reaction ? Answer : Yes. Query 162 : You have seen the process at the factory of TIPCO. Had you an occasion to see the Affidavit-in-rejoinder made by Mr. Betai and Dr. Potnis and Dr. Thakkar ? Answer : I have casually seen. I have not been given the same by the Government Advocate. Query 163 : The process chart for manufacture of ....
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.... Answer : I have already stated that I have only separated the fillers from other ingredients. I have not gone in the separation, isolation etc. of the curing agents and the phenolic resin. Hence I cannot say anything in this aspect. As far as I know, the curing of the phenolic moulding powder takes place at the time of moulding and at that time the reaction is irreversible. Just like the masticated rubber gets cured at the time of vulcanisation. There the reaction involved is irreversible and it is not possible to separate the rubber from the fillers etc. Similarly in a cured moulded product it will not be possible to physically separate resin from the fillers. Dr. Potnis has also deposed on this issue and the following part of his evidence would be relevant : Query 4 : Please define cure ? Answer : Cure is a chemical reaction. This can be seen from 'Plastics' by Harry Dubois on page 450. Query 5 : Is partial cure a chemical reaction ? Answer : Yes, even partial cure is a chemical reaction. Query 6 : Please define physical modification and chemical modification ? Answer : ....
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....physical means. Shri Krishnan admitted that he had not performed any chemical test but by mere microscopic test was able to separate wood flour from the product and arrived at the conclusion that it is a physically modified phenolic resin. In the first instance, I am not satisfied that Shri Krishnan had really done so, but even assuming that what Shri Krishnan said is correct, still by mere separation of the wood flour from the end product, it cannot be concluded that it was a physically modified phenolic resin. 38. In Brydson's book on 'Plastic Material' at page 397, it is stated that wood flour is a fine sawdust preferably obtained from soft woods such as pine, spruse and poplar. There is a good adhesion between phenol formaldehyde resin and the wood flour and it is possible that some chemical bending may occur. It would be convenient to quote an extract from the Book "Polymers and Resins" - "Their and Chemical Engineering" by Brage Soliding, Ph. D. page 256-257. "Wood flour is the most common filler and is used for general purpose moulding compounds. Wood-flour-filled resins flew easily in the mould and yield articles possessing excellent appearance. Poor to fair electrica....
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....the following passage appears :- "Fillers play a very important part in the manufacture of plastic compounds. They reduce cost, provide body, speed the cure or hardening, minimise shrinkage, reduce raxing, improve thermal endurance, add strength and provide special electrical, mechanical and chemical properties, Asbestos, for example, is widely used as a filler in compounds requiring high temperature and improved dimensional stability. Mica serves as a crack-stopper in glass bonded mica ; it also improves the electrical and thermal properties of all compounds. Ferrates are added to produce magnetic materials. Glass Fibres produce very high strength compound." It is difficult to appreciate how mixing of fillers would make the final product a plastic material and would lead to the conclusion that the moulding powder was not chemically modified phenolic resin. The submission of Shri Dhanuka that the moulding powder was not a chemically modified but a physically modified phenolic resin deserves to be repelled. 41. But even assuming that Shri Dhanuka is right that the phenolic moulding powder is a physically modified phenolic resin, still, the petitioners would be entitled to c....
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....ined certain additional information privately from Shri Krishnan and behind the back of the petitioners to record its finding. The observation made by the Assistant Collector in paragraph 14 and paragraph 20 of his report does support the grievance of Shri Sorabjee that the Assistant Collector secured privately additional information from Shri Krishnan. It hardly requires to be stated that the Assistant Collector in exercise of his quasi-judicial function was not justified in obtaining information privately and behind the back of the petitioners. It is inappropriate for any authorities to base the conclusion on the information secured privately and in respect of which the party affected had no opportunity to give explanation. In my judgment, the duty of excise leviable on the phenolic moulding powder manufactured by the petitioners would be in accordance with Item No. 15-A read with notification dated June 1, 1971. 42. That brings me to the relief sought by the petitioners in this petition. The petitioners have sought the writ of certiorari for quashing the order dated December 23, 1971, passed by the Assistant Collector. The second relief sought is for a writ of prohibition res....
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....ation on August 24, 1974 for a period commencing from August 25, 1973 to August 24, 1974. Shri Dhanuka submits that the Department is entitled to consider whether the claim made by the petitioners is within period of limitation before computing the same and refunding the amount. 43. Shri Desai, the learned Counsel appearing on behalf of the petitioners, on the other hand, points out that it is not open for the Department to decline to consider the claim of the petitioners for the relevant period on the ground that it is not in compliance with Rule 11 of the Central Excise Rules. The learned Counsel pointed out that the provisions of Rule 11 are attracted only in cases where repayment is claimed in consequence of the same having been paid through inadvertence, error or misconstruction and that contingency is not present in the case in hand. Shri Desai submits that excess duty was recovered on the phenolic moulding powder though it was not permissible in law in view of the notification and, therefore, such a levy clearly amounts to exercise in excess of jurisdiction or acting without jurisdiction and cannot be held merely an error of jurisdiction. The learned Counsel submitted tha....