UNION OF INDIA Vs. BHARAT CARPETS LIMITED

JUDGEMENT

(1.) The respondent-company manufactures tufted carpets. The excise duty was levied on the said carpets manufactured by the petitioner under Item 21 of the Schedule to the Central Excises and Salt Act on the ground that these carpets were covered by the following relevant description of the excisable article :

(2.) In pursuance of the orders levying the duty the respondent paid various amounts of duty. A summary of the treasury challans of duty paid by the respondent is at Annexure 'A' annexed to the plaint in Suit No. 142 of 1973. It is found that payments of which Seriall numbers are 1 to 55 were made up to 12-1-1970. The payments of Seriall numbers 56 to 183 were made from 24-1-1970 to 20-04-1972.

(3.) Suit No. 142 of 1973 was filed by the petitioner on the 26th March, 1973 claiming a refund of all these amounts from the Excise Authorities on the ground that Item No. 21 of the Schedule to the Central Excises and Salt Act relating to 'woollen fabrics' was not applicable to the carpets manufactured by the plaintiff and, Therefore, the duty of excise was illegally recovered from the plaintiff. It was also pleaded that Section 40 of the Central Excises and Salt Act which is a bar to the filing of suit against anything which is done or intended to be done in good faith in pursuance of the Act or any rule made there under does not apply inasmuch as the levy of duty against the plaintiff being illegal could not said to have been done under the Act at all. The suit was decreed in full by the learned Single Judge. Hence, this appeal.