TaxTMI 
TaxTMI 
1992 (9) TMI 88
X X X X Extracts X X X X
X X X X Extracts X X X X
....ication under Tariff Item No. 18-III(i) as per the classification list effective from 5-7-1983. The main varieties were 40s and 60s and the rate of duty in July 1983 was Rs. 1.30 plus 15% (Additional Duty) plus 10% (Special Duty), i.e., total of Rs. 1.63 approximately, per kg. for 40s yarn. For the same count of yarn for Polyester/Viscose manufactured out of virgin fibre, the rate of duty was Rs. 9.00 plus 15% (Additional Duty) plus 10% (Special Excise Duty), i.e., total of Rs. 11.25 per kg. The difference in Central Excise duty on these two varieties was, therefore, Rs. 9.60 per kg. for 40s yarn. In the same manner, the difference in duty for 60s yarn was Rs. 6.75 per kg. The clearances of yarn manufactured out of NCSW/Viscose blend started from July 1983 onwards as the classification list was filed w.e.f. 5-7-1983. 4.At the initial stage, the Assistant Collector, Central Excise, Aurangabad Division granted provisional approval and forwarded samples in both the cases to the Chemical Examiner for his report. The classification claimed by the Company was subsequently finalised granting concessional rate of duty under Notification No. 275/82 dated 13-11-1983. (Should be 1982 - Ed.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r order in the writ petition when it came up for hearing again on 19-2-1986 :- "Permitted to withdraw subject to the condition that the Respondent in this Writ Petition should pay interest at Bank rate and refund the amount along with interest within two months of the decision of the Writ Petition provided that the Petitioners succeed ultimately." 11.The respondents deposited the said amount of Rs. 56 lakhs in six instalments between 29-1-1986 and 7-8-1986 after obtaining extensions in time for the relevant deposits. The appellant-Union of India received the said amount from the High Court between 24-2-1986 and 14-8-1986 in three different instalments. 12.The appeal filed by the respondents was allowed by the learned Collector on 19-4-1991. The operative part of the appellate order read as follows :- "The appeal is allowed and the appellants are eligible for the consequential reliefs, if otherwise admissible." [Emphasis supplied] 13.On 31-5-1991, the respondents filed an application for refund of Rs. 56 lakhs plus interest of Rs. 51,44,202.73 at the bank rate, upto 31-5-1991. The application was filed before the Assistant Collector, Central Excise, Aurangabad Divi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....trary contained in any judgment, decree, order or direction of the appellate Tribunal or any court or in any other provisions of the said Act or the rules made thereunder or any other law for the time being in force. The appellant-Union of India, therefore, took the stand that whether it was the High Court's order of 19-2-1986 or of 19-9-1991 [which was passed prior to the coming into operation of the amended provisions on 20-9-1991 and obviously without taking cognizance of them], it was the duty of the Assistant Collector to satisfy himself that no part of the duty in respect of which the refund was claimed, was recovered by the respondents from any other person, before making any order of refund. 17.Hence on November 16, 1991 the appellant-Union of India filed an application being Civil Application No. 3553 of 1991 before the High Court praying inter alia that two months' time be granted to them to consider the refund of the amount to the respondents in accordance with the amended provisions of Section 11B of the Act. 18.In November, 1991, the respondent-Company also filed a contempt petition being Civil Application No. 3608 of 1991 in the High Court making a griev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....51,44,202.73 and rejected the respondents' claim for the same. 22.Thereafter, the contempt petition filed by the respondent being Civil Application No. 3608 of 1991 along with Contempt Petition No. 57 of 1992 came up again for hearing on 20-4-1992 before the High Court. The order passed by the Assistant Collector, Central Excise was brought to the notice of the High Court. The learned counsel for the respondents admitted having received the said order and also made a statement that his client was filing writ petition challenging the said order of the Assistant Collector. However, the court held that the decision of the Assistant Collector was not the decision of the Government and that the representation made earlier by the counsel for the appellant-Union of India was that it was the Government which was going to consider the question regarding the application of the amended provisions of the Act and since the Government had not conveyed its decision regarding the application of the Act, the order passed by the Assistant Collector was irrelevant. The High Court, therefore, directed the Union of India to deposit the entire amount of Rs. 56 lakhs together with bank interest on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....such refunds. When the appellant-Union of India made an application to the High Court to consider the applicability of the said amended provisions to the present case, time was granted by the High Court for the purpose, and within that time the Assistant Collector considered the said question and passed his order of 13-4-1992 holding that the amended provisions of the Act applied to the present case and in view of the fact that on the material produced before him the respondents had failed to prove that they had not passed on the burden of the duty to others, they were not entitled to the refund of the said amount. The respondent-Company has stated before the High Court that they were filing writ petition to challenge the said order of the Assistant Collector. The High Court, however, did not consider either the order dated 13-4-1992 passed by the Assistant Collector or the question regarding the applicability of the amended provisions of the Act to the present case. 24.It is difficult to appreciate the reasoning of the High Court that it was the Government which ought to have considered the application of the amended provisions of the Act to the present case. Under the Act, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....986 is valid or not. Since we are of the view that the order of 19-2-1986 attracts the provisions of sub-section (3) of Section 11B of the Act which has come into force on 20-9-1991, the respondents are not entitled to take advantage of the said order unless they succeed in showing to the statutory authorities that they had not passed on the whole or any part of the duty in question to others. 25.All the submissions made by Shri Parshurampuria, learned counsel for the respondents revolved round the said order of 19-2-1986 and are merely different ways of expressing the same thing. The authorities cited by Shri Parshurampuria do not really bear on the point. It is not, therefore, necessary to discuss the said authorities here. Further, if the contention advanced by the learned counsel is accepted, it would defeat the amended provisions of the Act. It would then be open to the assessees to obtain orders from courts as in the present case, and instead of paying the assessed amount of duty to the authorities, deposit it in court and raise a plea that what is deposited in court is not duty and the assessees are entitled to get the refund either directly from the court or if it is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in respect of the duty paid inputs or in respect of finished goods which have used the goods in respect of which the duty has been paid, does not arise. Copy of the advice of the Ministry of Law is enclosed herewith. 3.The Board agrees with the aforesaid advice of the Ministry of Law and accordingly it is clarified that an assessee has got no option to pay duty on his own volition in case the goods are fully exempted from payment of duty. Board's earlier instructions as contained in letter F. No. 267/16/88-CX. 8 dated 15-2-1988 may therefore be treated as withdrawn." The contention of the learned Counsel based on the said circular has, therefore, to be rejected and the deposit made by the respondents in the Court has to be held as one towards the duty. 27.The present case has made it necessary to send a word of caution to the courts that when in rare cases it becomes necessary to pass interlocutory orders injuncting the statutory authorities from recovering the duty, they should keep in mind the amended provisions of the Act and provide adequate safeguards in the order itself for adjudication of the question whether the assessee has passed on the burden of duty to oth....