INDIAN PLASTICS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The only point that I am called upon to decide is whether the petitioner is entitled to a refund of excise duty paid to the Excise authorities for the period 1st October, 1973 to 11th May, 1974, aggregating to Rs. 7,09,419.69.

(2.) The petitioner is a public limited company carrying on business of manufacturing, inter alia, a certain moulding powder technically known as phenol formaldehyde synthetic resin. Prior to 10th May, 1975, the petitioner submitted to the excise department its price lists for the excisable goods manufactured by it under the Self-Removal Procedure. These price lists included post-manufacturing costs and/or profits attributable to post-manufacturing operations and the petitioner paid excise duty on the value of the products thus computed. In December 1972, the Supreme Court delivered its judgment in A. K. Roy v. Voltas Ltd., which was reported in 1977 ELT (J 177) = AIR 1973 Supreme Court 225, holding that on a true construction of the Central Excises and Salt Act, 1944, the assessable value of manufactured products was to be ascertained on the basis of manufacturing costs, excluding from the sale price all post-manufacturing expenses and profits attributable to post-manufacturing operations. This view was confirmed by the Supreme Court in its later decision delivered in February 1975 in Atic Industries Ltd. v. H. H. Dave, Asstt. Collector, Central Excise = 1978 ELT (J 444) = AIR 1975 Supreme Court 960. In para 8 of the petition, it is averred that after the declaration of law by the Supreme Court the petitioner was advised that it was liable to pay excise duty in respect of its products after excluding the post-manufacturing costs and profits arising from post-manufacturing operations. On 10th May, 1975 the petitioner addressed a letter to the Superintendent, Central Excise and Customs, and referring to the decisions of the Supreme Court in Voltas case and the Atic case, pointed out that excise duty was being collected from the petitioner on post-manufacturing expenses also, which was included in the assessable value of the petitioner's products and that by reason of the aforesaid decisions of the Supreme Court post-manufacturing expenses could not be included in the assessable value. With this letter, the petitioner submitted its Revised Classification List and Revised Price Lists from 12th May, 1975, after deducting the post-manufacturing expenses. By its letter dated 12th May, 1975 addressed to the Assistant Collector, Central Excise, the petitioner enclosed its application for refund of duty paid on such post-manufacturing expenses in respect of the clearances made for the period 12th May, 1974 to 11th May, 1975, aggregating to Rs. 16,41,120.46. On 20th June, 1975, the Assistant Collector passed his order declining to approve the said price lists. The petitioner's appeal was rejected by the Appellate Collector on 13th March, 1976 on the ground that the "sale pattern remains the same". On 1st October, 1976, the petitioner filed the present petition for setting aside the order dated 13th March, 1976 and for refund of the amount of Rs. 16,41,120.46. On 15th March, 1976, a letter was addressed to the petitioner by the Superintendent stating that the petitioner's claim for refund of Rs. 16,41,120.46 was premature, the matter being sub-judice.

(3.) During the pendency of this petition, the petitioner took out a Chamber Summons on 29th January, 1981 for amendment of the petition claiming a refund of Rs. 7,09,419.69 being the excess duty paid for the period 1st October, 1973 till 11th May, 1974. By an order passed on 10th March, 1981, the petitioner's Chamber Summons was allowed "subject to the right of respondents to raise limitation".