GARWARE POLYESTER LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) HEARD. Perused the records. The rejection of refund claim is sought to be challenged as being contrary to the directions issued by this Court in its order dated 7. 12. 1990 in Writ Petition No. 3040 of 1982 as well as the law laid down by the Apex Court in the matter of Mafatlal Industries Limited and others v. Union of India and others, while challenging the legislative competency and the constitutional validity of the provision of law contained in s. 1 IB of the Central Excises and Salt Act, 1944.

(2.) THE petitioners have their factory at Aurangabad for manufacturing polyester films in their factory at Aurangabad and such films are metallised or lacquered at their factory at Nasik. A question arose whether the process of metallising or lacquering of the manufactured polyester films amounted to "manufacture" under the provisions of s. 2 (f) of the Central Excises and salt Act, 1944, hereinafter called as "the said Act" and in the Writ Petition no. 3040 of 1982 the Division Bench of this Court held that the activity of metallising and/or lacquering of the already manufactured polyester films did not amount to manufacture within the meaning of the said expression under the said Act. Consequently, the said petition was allowed by its judgment dated 7. 12. 1990 in terms of prayer cls. (a) and (b) of the said writ petition. The prayer clause (a) related to quashing of the orders passed by the assessing authorities and the prayer cls. (b) included direction for refund of the excess duty paid from 20. 2. 1982 under protest on the lacquerated and/or metallised and/or laminated films at the petitioners' factory at Nasik. It was also directed that the refund should be made within a period of ten weeks from the date of the said judgment failing which the refund was to carry interest at the rate of 12% p. a. from the expiry of the said period. Along with a letter dated 31. 1. 1991 the petitioners forwarded a certified copy of the said judgment to the second respondent for the purpose of refund of the amount paid under protest during the period from 1. 3. 1982 to 30. 4. 1982 amounting to Rs. 20,90,354. 10 ps. and for further period from 1. 5. 1982 to 11. 7. 1982 amounting to Rs. 13,07,038. 71 ps. thus totalling to Rs. 33,97,392. 81 ps. Under's letter dated 15. 2. 1991 the third respondent called upon the petitioners to submit the refund claim in an appropriate proforma along with the relevant documents supporting the refund claim. In reply thereto, the petitioners by their letter dated 18. 2. 1991 filed a refund claim for the said amount of Rs. 33,97,392. 81 ps. Under letter dated 19. 2. 1991, the third respondent called upon the petitioners to report whether the refund amount claimed by them was already recovered from the customers or not. In reply, under letter dated 19. 2. 1991 the petitioners informed the third respondent that the petitioners did not charge excess duty from the customers as their price was the total price to the customers. By further letter dated 21. 2. 1991, the third respondent called upon the petitioners to submit copies of the respective invoices for the period under reference in relation to the refund claimed, along with the balance sheet. Same was furnished by the petitioners along with a letter dated 25. 2. 1991. Further by letter dated 25. 3. 1991 addressed to the respondent No. 2, the petitioners sought to point out that in terms of the judgment dated 7. 12. 1990 of the High Court, the respondents were required to refund the excise duty within ten weeks and as the said period had already expired, the respondents were required to expedite the refund of the amount. Reminders were sent thereafter on 30. 12. 1991 as well as on 6. 1. 1992. Further the petitioners sought to draw the attention of the respondents to the judgment of the Calcutta High Court in the case of M/s. Titaghar Paper mills Co. Ltd. , 1992 (57) E. L. T. 527 under a letter dated 20. 2. 1992. However, by his letter dated 16. 11. 1992 the respondent No. 2 informed the petitioners that consequent to the decision of the Apex Court in the matter of Union of India v. Jain Spinners Limited, the amendment brought about to the said act in terms of the provisions of law contained in s. 11b has retrospective effect and therefore the petitioners were required to produce documentary evidence showing that the duty for which the refund was claimed was not recovered by them from their customers. The petitioners were thereafter personally heard in the matter and by order dated 23. 6. 1993, relying upon the decision of the Apex Court in Jain Spinners' case (supra), the second respondent rejected the refund claim of the petitioners and ordered that the amount be credited to the Consumer Welfare Fund under s. 11b of the said act. The petitioners preferred appeal before the third respondent being appeal No. 278 of 1993 which came to be rejected on 24. 4. 1995. The petitioners have therefore preferred the present writ petition.

(3.) AS regards the challenge to the legislative competency and the constitutional validity of s. 11b of the said Act, the same does not survive any more in view of the decision of the Apex Court in Mafatlal Industries case (supra) and the same has been fairly conceded by the learned Advocate for the petitioners.