1978 (1) TMI 162 - HC - Central Excise

Summary

Issues:
1. Interpretation of excise duty charges on levy sugar sales.
2. Refund of excess excise duty paid by the petitioner.
3. Application of Levy Sugar Price Equalization Fund Act, 1976.

Detailed Analysis:

1. The petitioner, a sugar manufacturing company, was directed to sell a specific quantity of sugar to the government at a fixed price under the Essential Commodities Act, 1955. The company was initially asked to sell the unlifted quantity of sugar to its own nominees at a price not exceeding the levy price, with an excise duty of 37 1/2%. However, a previous judgment clarified that only 25% ad valorem excise duty was lawfully chargeable on the sugar. The Excise Department demanded the petitioner to deposit the entire excise duty charged, leading to a dispute over the correct excise duty rate.

2. Basti Sugar Mills filed a writ petition challenging the demand for the difference between 37 1/2% and 25% ad valorem excise duty. The court held that the correct excise duty rate was 25% and restrained the department from collecting any additional sum. Subsequently, the petitioner requested a refund of the excess amount paid but was denied. The petitioner appealed, leading to the current petition seeking the quashing of the orders refusing the refund and requesting a mandamus for the refund.

3. The court acknowledged that the petitioner unlawfully charged 37 1/2% excise duty on the sugar sales, although only 25% was permissible. The court also noted the complexities in identifying the ultimate consumers who may have borne the burden of the excess excise duty. Considering the Levy Sugar Price Equalization Fund Act, 1976, the court directed the respondents to pay the excess amount to the Controller Levy Sugar Price Equalization Fund to ensure reimbursement to the actual consumers who may have overpaid due to the unlawful charges. The court allowed the petition in part, emphasizing the objective of the Act to benefit the consumers and ordered the payment to the Fund, while each party was to bear its own costs.