1985 (3) TMI 63 - HC - Central Excise

Issues Involved:
1. Whether 'flush doors' were dutiable under Tariff Item 16-B of the Central Excises and Salt Act, 1944.
2. Whether the petitioner is entitled to a refund of excise duty paid on 'flush doors'.
3. The applicability of the plea of limitation to the petitioner's claim for a refund.
4. The impact of the respondents' memo clarifying that 'flush doors' should be assessed under Tariff Item 68.

Detailed Analysis:

1. Dutiability of 'Flush Doors' under Tariff Item 16-B:
The petitioner, M/s. Mafatlal Plywood and Industries Ltd., contended that 'flush doors' were not dutiable under Tariff Item 16-B or any other entry of the Central Excises and Salt Act, 1944. The respondents, however, initially assessed 'flush doors' under Tariff Item 16-B and collected excise duty accordingly. This was challenged by the petitioner, leading to a series of appeals and a revision petition, all of which upheld the initial assessment. However, the respondents later filed a memo clarifying that 'flush doors' should be assessed under Tariff Item 68, effectively conceding the petitioner's point.

2. Entitlement to Refund of Excise Duty:
The petitioner sought a mandamus for the refund of excise duty paid from 1962-63 to the date of the writ petition. The court noted that the respondents' memo acknowledged that 'flush doors' were not dutiable under Tariff Item 16-B. Therefore, the court focused on the petitioner's claim for a refund and the defenses raised by the respondents. The court cited principles from Bhailal Bhai's and Vallabh Glass Work's cases, emphasizing that the exercise of discretion under Article 226 of the Constitution involves considering delay and the nature of the claim.

3. Plea of Limitation:
The respondents argued that the petitioner's claim was barred by limitation, as there was a delay of more than three years and eight months in approaching the court after the Government's final order. The court upheld this plea, noting that even in the exercise of extraordinary jurisdiction under Article 226, the plea of limitation cannot be ignored. The court rejected the petitioner's claim for periods prior to 1-1-1978 as barred by time, stating that the explanation for the delay was neither satisfactory nor convincing.

4. Impact of Respondents' Memo:
The respondents' memo clarified that 'flush doors' should be assessed under Tariff Item 68, which was consistent with a decision by the High Court of Delhi and the Supreme Court's dismissal of a related Special Leave Petition. This concession significantly impacted the court's decision, as it acknowledged that the initial assessment under Tariff Item 16-B was incorrect. Consequently, the court declared that the petitioner was entitled to a refund of the difference in excise duty paid from 1-1-1978 onwards.

Conclusion:
The court made the following orders and directions:
1. The petitioner is entitled to a refund of the difference in excise duty paid from 1-1-1978 onwards under Tariff Item 16-B, compared to the duty payable under Tariff Item 68.
2. The respondents are directed to compute and refund the difference in excise duty for the period from 1-1-1978, with the option to adjust the refund against any amounts due from the petitioner under the Act, within four months from the date of the order.
3. The petitioner's claim for refund for periods prior to 1-1-1978 is dismissed as barred by time.
4. Each party is to bear its own costs.

The writ petition was disposed of in these terms, balancing the petitioner's partial success with the respondents' legitimate defenses.

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