1991 (9) TMI 162 - SC - Central Excise

Whether concessional rate of octroi duty was available only if the declaration in Form 14 was filed with the octroi authorities? Held that - In the instant case the octroi duty paid by the petitioner Company would naturally have been passed on to the consumers. Therefore there is no justification to claim the same at this distance of time and the Court in its discretion can reject the same. For the above reasons, this Special Leave Petition is dismissed with costs.

Issues Involved:
1. Levy of octroi duty on aluminium raw materials.
2. Eligibility for concessional rate of octroi duty.
3. Procedural compliance for claiming concessional rate.
4. Claim for refund of excess octroi duty paid.
5. Jurisdiction of the court to grant refund despite procedural non-compliance.

Detailed Analysis:

1. Levy of Octroi Duty on Aluminium Raw Materials:
The petitioner company, engaged in the manufacture of aluminium products, imported aluminium raw materials to its factory in Kalwa, Thane District. Initially, the factory was not under the jurisdiction of Thane Municipality and thus did not pay octroi. However, post the inclusion of Kalwa in Thane Municipal Corporation's jurisdiction from 1-10-1982, the company had to pay octroi as per the Maharashtra Municipalities (Octroi) Rules, 1968. The octroi rates for non-ferrous metals, including aluminium, ranged from 0.5% to 4%, and the respondent Corporation levied octroi at 1.3% initially and later increased it to 2%.

2. Eligibility for Concessional Rate of Octroi Duty:
The petitioner company later discovered that under Rule 4 of the said Rules, goods specified in Part IA of Schedule II, including aluminium, when imported by an industrial undertaking for use as raw material, were eligible for a concessional octroi rate of not exceeding 1.25% and not less than 0.25%, provided a declaration in Form 14 was filed. The petitioner, however, did not file Form 14, which was a prerequisite to avail the concessional rate.

3. Procedural Compliance for Claiming Concessional Rate:
The company, under a mistaken belief, paid octroi at higher rates and did not comply with the procedural requirement of filing Form 14. The respondent Corporation, upon receiving a representation from the petitioner, clarified that the concessional rate was applicable only if the declaration in Form 14 was filed, which allowed the authorities to verify the use of raw materials within the industrial undertaking.

4. Claim for Refund of Excess Octroi Duty Paid:
The petitioner company, realizing the mistake, sought a refund of the excess octroi paid. The respondent Corporation rejected the claim, reiterating the non-compliance with the procedural requirement of filing Form 14. The petitioner then filed a writ of mandamus seeking a refund, which was dismissed by the High Court on the grounds of non-compliance with the procedural requirement.

5. Jurisdiction of the Court to Grant Refund Despite Procedural Non-Compliance:
The petitioner argued that procedural failure should not bar the claim for a refund if the company was otherwise eligible. However, the court held that the filing of Form 14 was essential for verification purposes and that failure to comply with this procedural requirement disentitled the petitioner from claiming the concessional rate. The court distinguished this case from Kirpal Singh Duggal v. Municipal Board, Ghaziabad, where procedural non-compliance did not bar the claim for refund, stating that in the present case, the non-filing of Form 14 prevented the necessary verification. The court also noted that a concession must be availed at the time it is available and in the prescribed manner, and that the petitioner could not claim the refund at a later stage as a matter of right.

The court further observed that the octroi duty paid would have been passed on to the consumers, and thus there was no justification for the refund claim at this distance of time. Consequently, the Special Leave Petition was dismissed with costs.

← Previous Next →