1988 (3) TMI 71 - HC - Central Excise

Summary

Issues:
1. Whether the petitioners are entitled to a refund of countervailing duty paid on imported glass yarn.
2. Interpretation of the notification dated 16th March, 1976 exempting glass yarn from excise duty.
3. Validity of the demand made by Customs authorities for countervailing duty.
4. Government's decision in a similar case involving glass yarn import.
5. Delay in filing a reply by the respondents.

Analysis:

Issue 1:
The petitioners, engaged in manufacturing fiber glass, imported glass yarn from Japan between 1978 and 1981 and were forced to pay countervailing duty of Rs. 1,76,421.62 by Customs authorities. The petitioners claimed exemption from duty based on a notification dated 16th March, 1976. They approached the High Court seeking a refund of the amount paid under protest.

Issue 2:
The notification dated 16th March, 1976, exempts yarn spun wholly out of glass fiber from excise duty. The petitioners, after making inquiries, were informed that no countervailing duty was payable on the import of fiber glass filament yarns. Some consignments were allowed without duty payment. The Government's order in a revision application for a similar case confirmed that glass yarn made of glass filaments was covered by the exemption under the notification.

Issue 3:
The respondents did not file an affidavit in reply despite the petition being admitted in 1982. The Court noted the delay in filing replies by the Union of India in such matters and refused an adjournment requested by the respondents. The Court emphasized the need for timely responses and decided in favor of the petitioners due to the lack of a counter to the petition.

Issue 4:
The Government's decision in a similar case involving glass yarn import supported the petitioners' claim for exemption from countervailing duty. The Court found no basis to reject the petition and ruled in favor of the petitioners, directing the respondents to pay costs.

In conclusion, the High Court ruled in favor of the petitioners, granting a refund of countervailing duty paid on imported glass yarn based on the exemption notification. The delay in filing responses by the respondents and the Government's decision in a similar case supported the petitioners' claim, leading to a successful outcome for the petitioners.