UNION OF INDIA Vs. ADVANI OERLIKON LIMITED

JUDGEMENT

(1.) This appeal arises out of the judgment and order of Pendse, J. making absolute the writ petition filed by the Respondents and permitting the Appellants to ascertain the amount of excise duty to be refunded within three months.

(2.) The Respondents manufacture and sell electrodes. The electrodes are sold in the course of wholesale trade to dealers at the factory gate. Excise duty was levied on the electrodes on 29th May, 1971. Between June 1971 and March 1972 the Respondents paid excise duty on the basis of a price list submitted by them and approved by the Appellants. It was assessed on the maximum list price fixed by the Respondents and the maximum price chargeable by the Respondents' dealers from their customers. The price charged by the dealers was loaded with, inter alia, the trade discount allowed to the dealers by the Respondents. The Respondents became aware, it was their case, by reason of the judgment of the Supreme Court in A.K. Roy v. Voltas Ltd. - 1977 ELT (J 177) (S.C.) = A.I.R. (1973) S.C. 225, delivered on 1st December 1972, that they had made a mistake of law in including the amount of the trade discount in the assessable value of the electrodes. Accordingly, by letters dated 10th April 1973 and 12th June 1973, the Respondents filed a refund application in the sum of Rs. 3,31,933.12 for the period between June 1971 and March 1973. This was the amount of excise duty attributable to the inclusion of the amount of the trade discount in the assessable value of the Respondents' electrodes. On 12th November 1973 the Respondents were issued a notice to show cause why their refund application should not be dismissed on the ground of limitation as provided by the Central Excise Rules. The Respondents were given a hearing and, on 7th February 1974, the Assistant Collector of Central Excise rejected the refund application on the ground that Rule 11 of the aforementioned Rules was mandatory and the application was, accordingly, barred by limitation. The appeal preferred by the Respondents was rejected, as also the revision application.

(3.) On 11th October 1977 the Respondents filed the writ petition impugning the orders of the Assistant Collector, the order in appeal and the order in revision. The learned single Judge upheld the contention of the Respondents that the payment of excise duty in the manner in which it has been made was due to a mistake of law; that the receipt of the amount thereof by the Appellants was without authority of law and that, therefore, Rule 11 had no application. The learned Judge referred to the decisions of Division Benches of this Court in Maharashtra Vegetable Products Pvt. Ltd. v. Union of India, 1981 ELT 468 and Vipro Products Ltd. v. Union of India, 1981 ELT 531. The learned Judge rejected the Appellants contention that the Respondents could have discovered their mistake with some diligence before the decision in the Voltas case and noted that the identical contention had been rejected by the Division Bench in the case of Maharashtra Vegetable Products Ltd. The learned Judge permitted the Appellants to ascertain within 3 months the amount of the trade discount that had been given by the Respondents to their dealers during the relevant period, and, on the basis, to determine the amount of excise duty to be refunded.