TaxTMI 
TaxTMI 
1993 (8) TMI 66
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....or short MSTC), a canalising agency for importing old and unserviceable ships and vessels for breaking. Ships and vessels are allotted to the ship breakers who are registered with MSTC. The petitioners are registered ship breakers who obtain the ships and vessels from MSTC. After dismantling/breaking the old vessels, the petitioners sell the metal scrap in open market. In 1985, the Central Excise authorities took the view that dismantling or breaking of old unserviceable ships constitutes `manufacture' within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944 (hereinafter referred to as `the Act') and the petitioners were, therefore, required to pay excise duty on the said material and in this connection show cause notice....
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....cerned parties on all relevant points, if ultimately the petitioners succeed in the petitions." 4.During the pendency of the said writ petitions, the parties arrived at an agreement and the following consent terms bearing the signatures of the advocates for both the parties were filed in the writ petitions on May 1, 1986 : "The petitioner herein applies for the aforesaid petition being withdrawn pursuant to the agreement reached between the parties hereto regarding levy of central excise duty on ship scrap. The respondents agree that they shall not cause enforcement1. of the personal bonds/security/surety executed by the petitioner in respect of 75% excise liability and allow the undertaking to be revoked. Upon withdrawal of the....
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.... specified in the said Schedule : Provided that the said goods have been obtained from breaking of ships, boats and other floating structures. on which duty of customs leviable thereon under the First(i) Schedule to the Customs Tariff Act, 1975 (51 of 1975) has been paid at the rate of Rs. 1400/- per light displacement tonnage, or imported on or bef(ii)ore the 28th day of February, 1986, and on which appropriate additional duty leviable thereon under Section 3 of the Customs Tariff Act, 1975 (51 of 1975) has been paid. Sd/- (S.C. Jana) Under Secretary to the Govt. Of India" 6.By letter No. F. No. 139/49/86-CX. 4, dated April 6, 1989 sent by the Under Secretary to the Government of India, Ministry of Finance, Department ....
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.... have been allowed by a Division Bench of the Gujarat High Court by the judgment under appeal. The High Court has directed the appellants to refund the excise duty paid by the petitioners in pursuance to the interim order passed by the High Court in the earlier writ petition. Feeling aggrieved by the said decision of the High Court, the appellants have filed these appeals. 8.The learned Additional Solicitor General has raised two contentions before us : (i) in the consent terms there is no reference to the refund of the amount of 25% of the excise duty which had been paid by the petitioners during the pendency of the writ petitions and the High Court was, therefore, not justified in directing refund of the said amount; and (ii) the petit....
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....ned parties on all relevant points, if ultimately the petitioners succeed in the petitions. The interim order thus postulated a specific direction by the High Court with regard to refund of 25% of the duty of excise paid in pursuance of the interim order. The order dated May 1, 1986 passed by the High Court disposing of the writ petitions in terms of the consent terms is completely silent on the question of refund of 25% of the duty of excise paid by the petitioners. This would mean that while disposing of the writ petitions the High Court did not give any direction with regard to refund of 25% of the duty of excise paid by the petitioners in pursuance of the interim order passed by the High Court. 10.The notification dated August 20, 19....
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...." in paragraph 2 of the said letter. We are unable to agree with this interpretation of the letter dated April 6, 1989 by the High Court. In our opinion the letter dated April 6, 1989 is confined in its scope to the matter referred to paragraph 3 of the consent terms. The said paragraph is confined to "waiver of the arrears of excise duty". At the time when the consent terms were agreed upon by the parties the only arrears of excise duty were the balance amount of 75% of duty of excise, the recovery of which had been stayed by the High Court. Paragraph 3 of the consent terms was thus related only to the waiver of the liability in respect of the said 75% of the duty of excise. 25% duty of excise, which had already been paid by the petitioner....