SHIV STEEL WORKS Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE are two cross appeals arising out of the judgment and decree dated August 5, 1977, by the Additional District Judge, Sirobi, whereby the learned Judge decreed the suit of the plaintiffs in part to the extent of Rs. 40,485/ - only on account of the excise duty paid under mistake and dismissed the suit for the rest of the amount, i.e., Rs. 1,12,517.35 paise out of the total amount of Rs. 1,53,002.35 paise as being time barred. The plaintiffs have, therefore, filed this appeal for the amount of Rs. 1,12, 517.35 paise disallowed by the court below. Their appeal is registered as No. 76 of 1977. The defendant Union of India has also filed the appeal for setting aside the decree for Rs. 40,485/ - passed against it by the trial court. The defendent's appeal is registered as No. 5 of 1978.

(2.) THE facts of the case are that the plaintiffs firm M/s. Shiv Steel Works, Falna, carries on the business of rerolling and making iron, angles, bars etc., from ingots purchased by them from third parties. It is alleged that in January, 1972, the Inspector, Central Excise, Rani, while inspecting the premises of the plaintiffs factory, realised excise duty to the tune of Rs. 2,850.75 on 38.010 kg. angles manufactured by the plaintiffs. The plaintiffs' case is that they paid in all excise duty totalling Rs. 1,53,002.35 paise during the period 21 -1 -1972 to 28 -2 -1974. However, the High Court of Allahabad held in M/s, Bansal Steelsons Co. Pvt. Ltd. v. Union of India and Ors. (decided on 18 -1 -74) -1979 E.L.T. (J 262) that so long as Notifications No. 206/63 -C. and 123/65 -C of the Central Government were in force, no excise duty was leviable on Iron and Steel products falling under sub -item i.e., of Item No. 26 -AA of the First Schedule of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). The plaintiffs alleged that they came to know about the aforesaid judgment in February, 1976 that the impugned duty had been realised from them under a mistake. Thereupon, the plaintiffs made an application for refund of the same before the Assistant Collector, Customs and Central Excise, Jodhpur, on 20 -3 -1976 but by this order dated 30 -8 -1976, the Assistant Collector, Customs and Central Excise, Jodhgur, dismissed the application on the ground that it was time -barred under Rule 11 of the Central Excise Rules of 1944 (hereinafter referred to as the Rules). After serving a notice under Section 80, Civil Procedure Code, the plaintiffs filed the present suit on 12 -11 -1976 for refund of Rs. 1,53,002.35 paise along with interest, pendentelite and future interest with costs.

(3.) WE shall first take up the appeal filed by the defendant Union of India. It is urged by Mr. Ram Raj Vyas that the whole suit is time barred and no part of it should have been decreed. His contention is that under Section 40 of the Act read with Rules 11 and 173 -J of the Rules, the suit for refund of excise duty erroneously paid does not lie after the expiry of one year from the date of payment of adjustment, as the case may be. At this stage, we may observe, that Mr. Vyas has not challenged the right of the plaintiffs to file a suit under ordinary law. His contention, however, is that even though the suit is maintainable yet in the present case it is barred by time, as it has been instituted after more than 12 months from the date of payment. We may, here, take note of the relevant provisions of the Act and the Rules relied upon by the defendant.