1986 (4) TMI 62 - HC - Central Excise

Issues Involved:
1. Application for impleading as a respondent or intervener.
2. Classification of Hydrogenated Rice Bran Oil (HRBO) under Central Excise Tariff.
3. Refund of excise duty paid by the writ petitioner.
4. Allegation of undue enrichment by the writ petitioner.
5. Jurisdiction and discretion of the court in adding parties.

Detailed Analysis:

1. Application for Impleading as a Respondent or Intervener:

Messrs Hindustan Lever Limited filed Civil Misc. No. 992 of 1986 under Order I, rule 10, read with section 151 Civil Procedure Code, seeking to be impleaded as a respondent or intervener in the writ petition filed by Messrs Oswal Oil and Soap Industries. The applicant argued that they would be seriously affected and gravely prejudiced if the writ petition was allowed, as it might have to pay a substantial amount to the Department under a notice issued by the Range Superintendent, Central Excise, Bombay. They contended that their presence was necessary to present material facts withheld by the writ petitioner.

2. Classification of Hydrogenated Rice Bran Oil (HRBO) under Central Excise Tariff:

The writ petitioner, Messrs Oswal Oil and Soap Industries, sought the classification of HRBO under Central Excise Tariff Item No. 12, which attracted no excise duty. However, the Assistant Collector, Central Excise (ACE), Ludhiana, classified HRBO under Tariff Item No. 68, which attracted 8% to 10% duty. The Collector (Appeals) and the Tribunal later held that HRBO should be classified under Item No. 12, but the Revenue's appeal against this decision was still pending before the Tribunal.

3. Refund of Excise Duty Paid by the Writ Petitioner:

The writ petitioner sought a writ of mandamus directing the respondents to refund Rs. 1,31,04,811.89 paid as excise duty on HRBO. Despite the orders of the Collector (Appeals) and the Tribunal, the Assistant Collector refused to refund the excise duty. The respondents opposed this refund, arguing that the writ petitioner had already recovered the duty from purchasers like the applicant and had obtained a refund by way of proforma credit from the Department.

4. Allegation of Undue Enrichment by the Writ Petitioner:

The applicant argued that allowing the writ petition would lead to the writ petitioner's undue enrichment, as they had already recovered the excise duty from the applicant and other purchasers. The applicant cited judgments from the Supreme Court, emphasizing that the writ petitioner should not be allowed to unjustly enrich themselves at the expense of others.

5. Jurisdiction and Discretion of the Court in Adding Parties:

The court examined whether the applicant was a necessary party under Order I, rule 10 of the Code of Civil Procedure. The court noted that the applicant was not directly affected by the orders passed by the respondents and was not a necessary party to the writ petition. The court cited precedents, emphasizing that a person could only be added as a party if they had a direct interest in the subject matter of the litigation. The court concluded that the applicant's interest was merely commercial and not direct, and their presence was not necessary for the complete adjudication of the issues in the writ petition.

Conclusion:

The court dismissed Civil Misc. Petition No. 992 and Civil Misc. Petition No. 1083 of 1986, holding that the applicant was not a necessary party and their interest was merely commercial. The court emphasized that the writ petitioners were the dominus litis and could not be compelled to fight against a party against whom they did not seek any relief. The court also dismissed Civil Misc. Petition No. 1088 of 1986, which sought permission to file a rejoinder to the reply of the writ petition. The court assessed the counsel fee at Rs. 500/-.

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