UNION OF INDIA Vs. GRASIM INDUSTRIES LTD

JUDGEMENT

(1.) RESPONDENT No. 1 is a public limited company engaged amongst other things in manufacture of caustic soda for which it uses titanium anodes as an input. It claimed Modvat credit for Excise duty paid by it on purchase of titanium from 23-8-1986 to 29-4-1989 and refund of Rs. 43,96,116. 42 on this count. The case set up was that though it had received such benefit earlier also up to 28-2-1982 pursuant to Notification No. 201/79 but it had somehow omitted to stake the claim for the period in question under the mistaken impression that metal anodes were not inputs within the terms of Rule 57a. But now that CEGAT had recently treated these as inputs under Rule 57 in Gujarat Alkalies and Chemicals Ltd. v. Collector -1989 (41) E. L. T. 424 which decision was later affirmed by the Supreme Court in Salonah Tea Company case [1988 (33) E. L. T. 249], the company had woken up to file its claim under Section 11b of Central Excise Act for refund of duty totalling Rs. 43,96,116. 42. But it was surprisingly put on show cause notice for proposed disallowance of claimed refund and its claim was eventually rejected by appellant No. 4 by order dated 15-10-1990 on the ground that it was not covered by expression 'refund' occurring in Section 11b and that it was time barred having been filed expiry of prescribed period of 6 months.

(2.) FEELING aggrieved the company filed M. P. No. 599/91 seeking declaration that it was entitled to Modvat credit under Notification No. 177/86-C. E. , dated 1-3-1986 and mandamus directing appellants to refund the paid excise duty. This petition was resisted by appellants primarily on the ground that company's claim was time barred and that it had failed to exhaust the alternate remedy provided under Section 35 of the Central Excise Act.

(3.) THE writ court on consideration of the matter overruled the two pleas taken by appellants and disposed of the writ petition by providing as under :