CREATIVE ENGINEERS Vs. UNION OF INDIA

JUDGEMENT

(1.) Heard learned Counsel for the parties.

(2.) This arbitration petition challenges an award passed by a Sole Arbitrator in a reference arising out of a contract for manufacture and supply of Glued Insulated Rail Joints of particular type and quantity as per an order placed by General Manager, Western Railway on the Petitioner. The disputes between the parties involve a claim for reimbursement of excise duty paid by the contractor, the Petitioner herein, for the rail joints manufactured and supplied for the Respondent-Union of India.

(3.) In pursuance of an invitation to tender issued by the Respondent herein, the Petitioner gave its offer of manufacture and supply of rail joints. A purchase order was placed by the Respondent on the Petitioner, accepting its tender. The purchase order provided that, as of that date, no excise duty was payable on the goods, but if any duty became applicable by the time of the dispatch, the same would be reimbursed by the Respondent, subject to production of documentary evidence of payment of such duty. According to the purchase order, for this purpose, excise duty would be considered as 16 per cent; any variation due to increase in turnover was not to be applicable. It is the case of the Petitioner that it supplied the requisite quantities of glued insulated rail joints to the Respondent, paying excise duty in the sum of Rs.8,07,340/-. It produced documentary proof of having made such payment, in the form of a certificate issued by the Superintendent, Central Excise, Range III, Kota (Rajasthan) dated 16 October 2003. Out of this amount, a sum of Rs.3,66,336/- was reimbursed to the Petitioner by the Respondent in March 2003, leaving a balance of Rs.4,41,004/-. The Respondent contested the Petitioner's claim for reimbursement of this balance. As a result, disputes arose between the parties, which were referred to the sole arbitrator, who was the Deputy Chief Engineer, Planning, Western Railway. The claims referred were as per a submission made by General Manager, Western Railway, who was the appointing authority. These were contractor's claims for sums of Rs.4,41,004/- towards excise duty and of Rs.1,04,400/- towards fabrication and transport charges. As for railways, their counter claim was said to be of nil amount. It was in accordance with this submission that the learned arbitrator adjudicated the reference. The arbitrator, in his impugned award, not only disallowed the Petitioner's claim for balance reimbursement of Rs.4,41,004/-, but even allowed refund of the reimbursement of Rs.3,66,336/- already made by the Respondent. Both these aspects have been challenged in the present petition.