1984 (12) TMI 195 - AT - Central Excise

Summary

Issues:
Claim for refund of differential duty on non-cellulosic spun yarn captively consumed in the manufacture of fabrics rejected by Assistant Collector and confirmed by Collector of Central Excise (Appeals) based on Section 51(2) of the Finance Act, 1982. Tribunal allowed the appeal, holding that Section 51(2) does not override or supersede Sections 11A and 11B of the Central Excises and Salt Act, 1944.

Analysis:

Issue 1: Claim for Refund Rejection
The Respondent filed a claim for refund of the differential duty paid on non-cellulosic spun yarn captively consumed in the manufacture of fabrics. The claim was rejected by the Assistant Collector of Central Excise (Annexure C) and confirmed by the Collector of Central Excise (Appeals), Madras (Annexure D). The rejection was based on Section 51(2) of the Finance Act, 1982, which deemed all duties of excise assessed or collected before 20-2-1982 as validly collected.

Issue 2: Tribunal's Decision
The Respondents appealed to the Tribunal under Section 35B of the Central Excises and Salt Act, 1944. The Tribunal, after hearing both sides, allowed the appeal. The Tribunal held that Section 51(2) of the Finance Act, 1982 does not override or supersede Sections 11A and 11B of the Central Excises and Salt Act, 1944. It referenced a Division Bench judgment of the Delhi High Court, which clarified that Section 51 of the Finance Act cannot repeal Sections 11A and 11B. The Tribunal found that the refund order in favor of the appellants had become final at the hands of a quasi-judicial authority and that Section 51 of the Finance Act must be read harmoniously with Sections 11A and 11B. Consequently, the Tribunal set aside the impugned order and allowed the appeal with consequential relief.

Issue 3: Reference to High Court
After hearing both sides, the Tribunal referred the question under Section 35G of the Central Excises and Salt Act, 1944 to the High Court of Judicature at Madras. The question referred was whether the Tribunal was correct in holding that, on a harmonious interpretation of Section 51 of the Finance Act, 1982 and Sections 11A and 11B of the Central Excises and Salt Act, 1944, the order of refund had become final at the hands of a quasi-judicial authority. This reference sought clarity on the legal interpretation of the interaction between the provisions of the Finance Act and the Central Excises and Salt Act in the context of the refund order issued by the quasi-judicial authority.