COLRIDGE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners are a Company registered under the Companies Act, and inter alia, manufacture diverse kinds of packaging materials, including tubes popularly known as 'aluminium Collapsible and Rigid Tubes' at their factory situated at Thane. The aluminium tubes manufactured by the petitioners are liable for payment of excise duty under Tariff Item No. 27 (e)of the Central Excise Tariff. A dispute arose between the petitioners and the Excise Authorities in respect of assessable value of the extruded tubes. The petitioners claimed that it was not permissible to take into account costs of post-extrusion operations while determining the assessable value of the aluminium extruded tubes. To post-manufacturing operations related to lacquering, coating and printing of the aluminium tubes, and also the costs of the plastic caps fitted on the tubes. The Department on the other hand claimed that post-extrusion operations are part of the manufacturing activities and the costs should be included while determining the assessable value.

(2.) THE petitioners filed Misc. Petition No. 771 of 1973 under Article 226 of the Constitution of india in this Court seeking a direction to the Department not to include the assessable value of the extruded aluminium tubes by including the costs or charges relating to the coating or printing of the tubes and the value of the plastic caps. The petition was decided by judgment dated July 24, 1979 delivered by one of us (Pendse, J.) and the claim of the petitioners was upheld. An identical issue arising in companion petition, being Miscellaneous Petition No. 511 of 1973 between Metal Box Company of India and Union of India was also decided. The Department preferred appeal No. 417 of 1980 before the Division Bench of this Court challenging the conclusion recorded in favour of the petitioners by the Single Judge. The appeal was summarily dismissed by the Division Bench by order dated August 22, 1980. The Department then filed special Leave Petition before the Supreme Court and the matter is pending hearing.

(3.) IN accordance with the decision of the Single Judge, the petitioners were entitled to refund of duty erroneously recovered by the Department between the period of June 2, 1973 and January 20, 1974. The petitioners while approaching this Court by filing petition under Article 226 of the constitution had also applied for refund of the duty for the relevant period before the superintendent of Central Excise. The claim was rejected by the Assistant Collector and the petitioners had preferred appeals before the Collector of Central Excise (Appeals ). The appeals remained pending in view of the petition filed by the Company in this Court. After the decision was recorded by the learned Single Judge on June 24, 1979, the Collector of Central Excise (Appeals) took up the appeals for hearing and by order dated December 21, 1979 directed refund of an amount of Rs. 9,70,989. 15 in accordance with directions of the High Court. On December 12, 1980 the Government of India, Ministry of Finance served show cause notice upon the petitioners in exercise of powers vested under Section 36 (2) of the Central Excises and salt Act to show cause why the order passed by the Appellate Collector awarding refund should not be set aside. The show cause notice recites :