Maheshwari Mills Ltd. Vs. Collector of Central Excise and Customs - Court Judgment

Excerpt:
exports - yarn captively consumed in making fabrics--duty liability on yarn cannot be discharged by adjustment of bank guarantee. it must be paid before claim for export rebate is to be considered. ce rule 12a. - orderravani, j.1. petitioner mill company disputed its liability to pay excise duty on the yarn manufactured for captive consumption. the matter was carried up to the supreme court and the supreme court decided against the petitioner mill company. during the course of the proceedings which went up to the supreme court, the petitioner mill company was required to furnish bank guarantee for the amount of excise duty payable by it. it is an undisputed position that except to the extent of rs. 6,10,751.68 ps. (rupees six lacs, ten thousand, seven hundred fifty one and paise sixty eight), the bank guarantee furnished by the petitioner with respect to its other liability for the payment of excise duty has been encashed and the amount has been realised by the department. however, in respect of the aforesaid amount, the bank guarantee had not been encashed by the department on account of the interim relief obtained by the petitioner mill company at one stage or another. in facts of the case and since the parties have arrived at a consensus, it is not necessary to refer to the earlier litigation. suffice it to say that in special civil application no. 412 of 1990, this court directed respondent no. 2, i.e. assistant collector of central excise, division vi, ahmedabad, to entertain the rebate claim of the petitioner mill company and decide the same within stipulated time. ordinarily respondent no. 2 would have no power to decide such a claim as provided under rule 12a of central excise rules, 1944. however pursuant to the order passed by this court, respondent no. 2 decided the claim and held against the petitioner mill company. in facts of the case, we are of the opinion that the order cannot be said to have been passed without jurisdiction. respondent no. 2 has held against the petitioner mill company mainly on the ground that rebate of excise duty can be claimed only after the payment of excise duty. admittedly, in this case, the petitioner mill company has not paid excise duty. but the petitioners' case was that since the petitioner mill company has furnished bank guarantee the same should be treated as payment of excise duty and the claim for rebate of rs. 6,05,943.33 (six lacs, five thousand nine hundred forty three and paise thirty three) should be allowed and adjustment should be made accordingly. the assistant collector refused to adopt such a course while passing the order. he has referred to the earlier proceedings before the cegat and the supreme court in his order dated march 23, 1990. 2. the petitioner mill company has challenged the legality and validity of the order passed by the assistant collector, which is produced at annexure c to the petition. 3. today when the matter came up for hearing, learned counsel for the respondents stated that if the petitioners make payment of the amount of excise duty, the department has no objection to consider the rebate claim that may be made by the petitioner mill company. in view of this statement made by the learned counsel for the respondents, learned counsel for the petitioners stated that the amount of excise duty payable by the petitioner mill company, that is, rs. 6,10,751.68 (rupees six lacs ten thousand seven hundred fifty one and paise sixty eight only) will be paid by the petitioner mill company on or before april 15, 1991. in view of the aforesaid statements made by the learned counsels appearing for the petitioners and respondents, it is not necessary to go into the rival contentions raised by the parties and decide the same. 4. in the result, following directions are given : (i) petitioners shall make payment of an amount of rs. 6,10,751.68 ps. (rupees six lacs ten thousand seven hundred fifty one and paise sixty eight only) on or before april 15, 1991. thereafter the petitioners may file application for export rebate under rule 12a of the central excise rules, 194, latest before april 30, 1991, to respondent no. 3, assistant collector of central excise (refunds), bombay. the petitioners shall make declaration stating that amount of rs. 6,10,751.68 (six lacs ten thousand seven hundred fifty one and paise sixty eight) was paid and shall also enclose a xerox copy of the receipt of the amount paid. (ii) respondent no. 3, herein, assistant collector of central excise (refunds), bombay, on receipt of the rebate claim application shall entertain the same as having been filed within limitation having regard to the provisions of section 11b of the act, the application shall be considered as having been filed within limitation and shall be decided on merits. respondent no. 3 is further directed to decide the application as expeditiously as possible. (iii) within ten days after the amount is paid by the petitioner mill company, necessary documents pertaining to the export rebate claim shall be forwarded by respondent no. 2 to respondent no. 3. (iv) bank guarantee filed by the petitioners shall be returned to the petitioners by the department within ten days from the payment of the amount of excise duty of rupees six lacs ten thousand seven hundred fifty one and paise sixty eight. 5. in view of the aforesaid observations and directions, the learned counsel for the petitioners seeks permission to withdraw the petition. permission granted. subject to the aforesaid observations and directions, petition stands disposed of as withdrawn. rule discharged with no order as to costs. interim relief granted earlier stands vacated.

Judgment:
ORDER

Ravani, J.

1. Petitioner mill Company disputed its liability to pay excise duty on the yarn manufactured for captive consumption. The matter was carried up to the Supreme Court and the Supreme Court decided against the petitioner mill company. During the course of the proceedings which went up to the Supreme Court, the petitioner mill company was required to furnish bank guarantee for the amount of excise duty payable by it. It is an undisputed position that except to the extent of Rs. 6,10,751.68 Ps. (Rupees six lacs, ten thousand, seven hundred fifty one and paise sixty eight), the bank guarantee furnished by the petitioner with respect to its other liability for the payment of excise duty has been encashed and the amount has been realised by the department. However, in respect of the aforesaid amount, the bank guarantee had not been encashed by the department on account of the interim relief obtained by the petitioner mill company at one stage or another. In facts of the case and since the parties have arrived at a consensus, it is not necessary to refer to the earlier litigation. Suffice it to say that in Special Civil Application No. 412 of 1990, this Court directed respondent No. 2, i.e. Assistant Collector of Central Excise, Division VI, Ahmedabad, to entertain the rebate claim of the petitioner mill company and decide the same within stipulated time. Ordinarily respondent No. 2 would have no power to decide such a claim as provided under Rule 12A of Central Excise Rules, 1944. However pursuant to the order passed by this Court, respondent No. 2 decided the claim and held against the petitioner mill company. In facts of the case, we are of the opinion that the order cannot be said to have been passed without jurisdiction. Respondent No. 2 has held against the petitioner mill company mainly on the ground that rebate of excise duty can be claimed only after the payment of excise duty. Admittedly, in this case, the petitioner mill company has not paid excise duty. But the petitioners' case was that since the petitioner mill company has furnished bank guarantee the same should be treated as payment of excise duty and the claim for rebate of Rs. 6,05,943.33 (six lacs, five thousand nine hundred forty three and paise thirty three) should be allowed and adjustment should be made accordingly. The Assistant Collector refused to adopt such a course while passing the order. He has referred to the earlier proceedings before the CEGAT and the Supreme Court in his order dated March 23, 1990.

2. The petitioner mill company has challenged the legality and validity of the order passed by the Assistant Collector, which is produced at Annexure C to the petition.

3. Today when the matter came up for hearing, learned counsel for the respondents stated that if the petitioners make payment of the amount of excise duty, the department has no objection to consider the rebate claim that may be made by the petitioner mill company. In view of this statement made by the learned counsel for the respondents, learned counsel for the petitioners stated that the amount of excise duty payable by the petitioner mill company, that is, Rs. 6,10,751.68 (Rupees six lacs ten thousand seven hundred fifty one and paise sixty eight only) will be paid by the petitioner mill company on or before April 15, 1991. In view of the aforesaid statements made by the learned counsels appearing for the petitioners and respondents, it is not necessary to go into the rival contentions raised by the parties and decide the same.

4. In the result, following directions are given :

(i) Petitioners shall make payment of an amount of Rs. 6,10,751.68 Ps. (Rupees six lacs ten thousand seven hundred fifty one and paise sixty eight only) on or before April 15, 1991. Thereafter the petitioners may file application for export rebate under Rule 12A of the Central Excise Rules, 194, latest before April 30, 1991, to respondent No. 3, Assistant Collector of Central Excise (Refunds), Bombay. The petitioners shall make declaration stating that amount of Rs. 6,10,751.68 (six lacs ten thousand seven hundred fifty one and paise sixty eight) was paid and shall also enclose a xerox copy of the receipt of the amount paid.

(ii) Respondent No. 3, herein, Assistant Collector of Central Excise (Refunds), Bombay, on receipt of the rebate claim application shall entertain the same as having been filed within limitation having regard to the provisions of Section 11B of the Act, the application shall be considered as having been filed within limitation and shall be decided on merits. Respondent No. 3 is further directed to decide the application as expeditiously as possible.

(iii) Within ten days after the amount is paid by the petitioner mill company, necessary documents pertaining to the export rebate claim shall be forwarded by respondent No. 2 to respondent No. 3.

(iv) Bank guarantee filed by the petitioners shall be returned to the petitioners by the department within ten days from the payment of the amount of excise duty of rupees six lacs ten thousand seven hundred fifty one and paise sixty eight.

5. In view of the aforesaid observations and directions, the learned counsel for the petitioners seeks permission to withdraw the petition. Permission granted. Subject to the aforesaid observations and directions, petition stands disposed of as withdrawn. Rule discharged with no order as to costs. Interim relief granted earlier stands vacated.