KEC INTERNATIONAL LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners carry on business of process of galvanising various structural steel pats supplied by their customers. It is the claim of the petitioners that the process of galvanising does not bring into existence any new product having any distinct name and therefore galvanising does not constitute manufacture under Section 2 (f) of the Central Excises and Salt Act. Since march 1975 the petitioners were compelled to pay excise duty by the Department under the residuary Item 68 of the erstwhile first schedule to the Act. The petitioners entered into correspondence with the Departments but the Superintendent of Excise by order dated February 4, 1980 held that the duty was payable. The petitioners carried appeal before the Collector of central Excise (Appeals) and the appeal was allowed by order dated August 13, 1981 and it was held that the process of galvanising does not amount to manufacture.

(2.) THE petitioners thereupon requested the Superintendent to grant refund under Section 11b (3)of the Central Excise Act for the period from January 1978 and ending with July 1981. The petitioners also forwarded the details of the amount of duty paid during the period. The amount of refund was not paid because the order of the Collector (Appeals) was carried in appeal before the Customs Excise and Gold (Control) Appellate Tribunal. The Tribunal also came to the conclusion in April 1988 that the process of galvanising does not amount to manufacture. The petitioners were therefore entitled to the refund of duty. As the amount of refund was not paid by the Department, the petitioners preferred Writ Petition no. 1084 of 1990 in this Court and the petition was disposed by Justice Mrs. Manohar by order dated April 11, 1990. The learned Judge directed the Department to verify the claim of the petitioners for refund and grant the refund within three weeks. The learned Judge noted the claim of the petitioners that the verification has already been done.

(3.) IN pursuance of the order passed by the learned Judge, the Assistant Collector of Central excise by order dated April 30, 1990 verified the claim and held that out of the amount of Rs. 2,76,786. 10 the amount refundable is only Rs. 1,71,626. 20. As regards the balance amount of Rs. 1,05,159. 90 the Assistant Collector held that the same is hit by limitation as prescribed under section 11b of the Central Excises and Salt Act. The refusal to pay an amount of Rs. 1,05,159. 90 has given rise to filing of the present petition.