GANGES JUTE PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) This is the second time that this petition has been taken up and is required to be adjourned because instructions have not been received by Advocate appearing for the Director, Directorate of Supplies and Disposals. Pursuant to a notification of January 11, 2011 gunny bags were supplied by the first petitioner company to such government organisations as identified by the DGS & D. Such bags are required to be compulsorily used under clause 3 of the Jute and Jute Textiles Control Order, 2000.

(2.) The notification of January 11, 2011, as published in the Official Gazette on January 27, 2011, specified that the price fixed under the notification was exclusive of duty of excise, cess payable under the Jute Manufacture Cess Act, 1983 and sales tax. Excise, cess and sales tax were specifically mentioned in the notification to be payable by the purchaser, in addition to the ex -factory price. The gunny bags were supplied and invoices raised on the purchasers on the mistaken understanding of both the DGS & D and the petitioner company that no excise duty was payable on the transaction. However, a subsequent excise claim has been made on the ground that since the bags were branded, excise was payable. The issue as to whether branded gunny bags attract excise duty for the mere branding is pending before the Supreme Court.

(3.) In excise claims pertaining to other assessment years, the petitioners herein and similarly situated persons have contested the claims and have carried the initial orders in appeal to the tribunal. The petitioners say that in view of the notification of January 11, 2011, it would be the purchasers who would be liable to pay the excise duty; but even to contest the claim it costs money, including the substantial statutory pre -deposit that has to be made under Section 35F of the Central Excise Act, 1944. The petitioners say that even if DGS & D is not required to pay the excise claim immediately and the petitioners pursue their remedies against the excise claim, any remission on such account would, ultimately, be to the benefit of DGS & D. As such, the petitioners claim that the substantial statutory pre -deposit that has to be made should be furnished by the DGS & D. Since the matter involves payment, no instructions appear to have been forthcoming.