1990 (1) TMI 76 - HC - Central Excise

Summary

Issues Involved:
1. Quashing of the show cause notice issued by the Assistant Collector, Central Excise.
2. Compliance with the directions of the Appellate Collector by the Assistant Collector.
3. Jurisdiction and authority of the Assistant Collector in light of the Supreme Court decision in the case of Union of India and Others v. Bombay Tyre International Ltd.
4. Delay in the finalization of the refund claim.

Issue-wise Detailed Analysis:

1. Quashing of the Show Cause Notice:
The petitioner sought to quash the show cause notice dated 6-10-1986 issued by the Assistant Collector, Central Excise, Allahabad, which questioned the refund claim of Rs. 28,31,472.73. The court held that the show cause notice was a preliminary step and the petitioner could present all grounds of opposition during the proceedings before the Assistant Collector. The court emphasized that the notice was provisional, and the Assistant Collector was rightfully seized of the matter upon remand. Therefore, there was no valid ground to quash the notice at this stage.

2. Compliance with the Directions of the Appellate Collector:
The court underscored that the Assistant Collector was bound to follow the directions of the Appellate Collector, which had become final as they were not challenged by the Central Excise Department. The Assistant Collector could not disregard these directions even if they conflicted with the Supreme Court's later decision. The court stated, "So long as the order of the Appellate Collector was not set aside by any court or superior authority the Assistant Collector had no option but to scrupulously follow the directions issued by the Appellate Collector."

3. Jurisdiction and Authority of the Assistant Collector:
The Assistant Collector referenced the Supreme Court decision in Union of India and Others v. Bombay Tyre International Ltd. to assert that the refund claim was inadmissible. The court clarified that the Assistant Collector must ascertain whether the post-manufacturing expenses claimed were distinctly identifiable and actually incurred, as directed by the Appellate Collector. The court noted that the Assistant Collector should not reopen the issue about the admissibility of the refund claim, which was already settled by the Appellate Collector's decision.

4. Delay in the Finalization of the Refund Claim:
The court expressed concern over the delay in finalizing the refund claim, noting that the order of remand was passed on 3-4-1982, yet the Assistant Collector had not complied with the directions. The court observed that the delay appeared to be more on the part of the Assistant Collector rather than the petitioner, who was interested in expediting the matter.

Conclusion:
The petition was allowed in part. The Assistant Collector, Central Excise, was ordered to comply with the Appellate Collector's directions within four months from the date a certified copy of the court's order was submitted by the petitioner. The Assistant Collector was to inform the petitioner within one month about any further documents or material required, which the petitioner had to furnish within one month of receiving such intimation. The parties were to bear their own costs.