VINYLLORA INDUSTRIES LTD Vs. CENTRAL EXCISE

JUDGEMENT

(1.) It is not very often we are called upon to adjudicate a rare case of this nature in which the petitioner company, an assessee under the Central Excise Act, 1944 (hereafter, the Act), seeks redressal by way of a mandamus declaring the action of the third respondent in encashing the Bank Guarantee (BG) given by the petitioner in 1978 - which stood extended from time to time - even while the petitioner's appeal filed about three decades ago is still pending with the first respondent, as arbitrary and illegal. The shocking state of affairs notwithstanding dispassion calls for an impartial consideration of the short issue that falls for consideration in the background of the following short facts, which are not seriously in dispute.

(2.) The brief fact of the matter is that the petitioner at the relevant time in 1970s was a manufacturer of PVC cloth (cotton fabrics). He was paying excise duty. In 1973 - 1974, he claimed certain discounts - quantity discounts, packing charges and forwarding & handling charges, in respect of consignment to M/s.General Plastics and Leather Company, Secunderabad, and M/s.Vasundhara Plastic Corporation, Madras. The third respondent, the jurisdictional assessment officer, however, passed an order on 31.01.1978 disallowing the discounts claimed by the petitioner.

(3.) The petitioner filed an appeal under Section 35 of the Act before the first respondent, who was at the relevant time stationed at Chennai, exercising territorial jurisdiction over Andhra Pradesh, Kerala and Tamil Nadu. Pending the appeal, the petitioner sought stay of the collection of duties. The first respondent passed orders on 31.07.1978 staying the collection of duty on condition of the petitioner furnishing BG for an amount of Rs. 65,800/-. The petitioner complied with the same. He also executed general security bond for an amount of Rs. 1,00,000/-and Rs. 40,000/-supported by a BG of Rs. 25,000/-and Rs. 10,000/-respectively to cover the provisional assessment order of the third respondent. Thereafter, with or without any official reminders, the petitioner extended the validity of the BG till 2009. The appeal was, however, not disposed of. It is still pending even after about thirty three years.