HINDUSTAN LEVER LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE appeals are directed against the order dated May 14, 1987 passed by the learned Single Judge in C. W. P. No. 3120 of 1985. Oswal Oil and Soap Industries and Anr. v. Customs, Excise and Gold Appellate Tribunal and Ors. whereby he directed the official respondents to refund excise duty amounting to Rs. 1,31,811. 89 to the writ petitioners.

(2.) OSWAL Oil and Soap Industries (hereinafter described as respondent-Company) is a manufacturer of hardened rice bran oil. M/s Hindustan Levers Ltd. , (hereinafter described as appellant-company) is engaged in the manufacture of soap for which hardened rice bran oil is one of the raw materials. The appellant company has been purchasing a part of its requirement from the respondent company. For this purpose, they entered into contract whereunder price, exclusive of the excise duty was stipulated and the appellant company was to pay the excise duty In terms of the notification No. 201/79, issued by the Central Govt, the excise duty was paid by the respondent company on hardened rice bran oil under tariff item 68 at the time of its clearance. After the receipt of the, raw material by the appellant company the Central Govt. used to refund the element of excise keeping in view the finished goods manufactured by the appellant company and the appellant used to return the entire duty to the respondent company. In this manner the liability of the respondent company to pay the excise duty on hardened rice bran oil was nil. Notwithstanding that the respondent company raised a dispute regarding the classification of hardened rice bran oil. It pleaded that the goods were classifiable under tariff item No. 12 and not under tariff item No. 68. At one stage it had raised protest against the payment of excise duty under tariff item No. 68 but vide letter dated 29. 3. 1984 written to the Superintendent, Central Excise, Range-II, Ludhiana. The respondent company withdrew its protest. The dispute relating to classification of the goods came to the finally resolved by the Customs; Excised Gold (Control) Appellate Tribunal which accepted the plea of the respondent company. Soon thereafter the respondent company filed a refund claim before the Assistant Collector, Central Excise Ludhiana, who rejected the same vide order dated 10. 5. 1985. The relevant extract of the Order passed by the Assistant Collector is reproduced below :

(3.) THE respondent company challenged the order of the Assistant Collector in CWP No. 3120/1985. After its appeal was rejected by the Central Excise (Appeals) respondent No. 5, the respondent company amended the writ petition and challenged the legality of the appellate order as well. The appellant company which was likely to be affected by the decision of the writ petition sought its impleadment as party respondent. The learned single Judge rejected its application. However, on appeal, the Supreme Court reversed that order and directed the High Court to hear the appellant company as a party respondent.