MERYFUR INDUSTRIES Vs. UNION OF INDIA

JUDGEMENT

(1.) Parties entered into a Rate contract bearing Nos. ES-3/RC-1432/PVC/ALUM CABLES/II/85-86/33/MERYFUR/1337/COAD dated 17 2.1986, ES-3/RC-1431/PVC/ALUM CABLES/I/85-86/33/MERYFUR/COAD/1358 dated 31.1.1986, and ES-3/RC-1430/RC- 1430/UGAC/85-86/III/MERYFUR/1419/COAD dated 19.3.1986, for the supply of PVC cables. Clause 6 of the Conditions of the Contract provided for the payment of Excise duty by the purchaser. The said clause reads as under:

(2.) It is the admitted case of the parties that after entering into the said contract, a major change was brought about in the excise policy of the Government and MODVAT scheme was introduced in terms of which the rate of excise duty on such type of commodity i e. P.V.C. cables was increased from 10% plus + 50% ED to 30% w.e.f. 1.3.1986 and later to 25% w.e.f. 3.4.1986. The supplier admittedly paid excess duty at this enhanced rate for the supplies made during that period. The supplier claimed the excise duty at the enhanced rate which the department disputed on the ground that under the MODVAT scheme, the supplier had received certain benefits which he was liable to set off and the respondent was entitled deduction in the excise duty to that extent. However, without prejudice to their rights, the respondent paid 50% of the enhanced duty to the supplier/ petitioner. Disputes arose between the parties in regard to the payment of the enhanced duty. The petitioner claimed the balance 50% of the enhanced duty which remained unpaid by the respondent. The dispute was referred to the named Arbitrator who entered upon the reference. There was a change in the Arbitrators from time to time and lastly the Sole Arbitrator Mrs. Shall Goel made and published her Award dated 15.3.2000 thereby allowing the claim of the petitioner along with interest @ 18% p.a.

(3.) Pursuant to a petition under Sections 14 and 17 of the Arbitration Act. 1940 (hereinafter referred to as the "Act"), the Award and proceedings were filed and notice inviting objections, if any, against the said Award of the Arbitrator was issued. A petition under Sections 30 and 33 challenging the Award of the Sole Arbitrator and seeking to set it aside has been made on behalf of the respondent/ UOI inter alia challenging the Award on the grounds that the Arbitrator has misconducted the proceedings and that the claim has been allowed on no material or insufficient material and without adhering to the conditions of the Contract. In the reply, objections have been controverted and it is denied that there are any grounds much less sufficient grounds for setting aside the Award of the Sole Arbitrator. On the pleadings of the parties, following issue was framed: