1991 (3) TMI 160 - HC - Central Excise

Summary

Issues:
1. Dispute over liability to pay excise duty on yarn manufactured for captive consumption.
2. Validity of the order passed by the Assistant Collector regarding the rebate claim.
3. Resolution of the dispute through payment of excise duty and consideration of rebate claim.

Detailed Analysis:
1. The petitioner mill company disputed its liability to pay excise duty on yarn manufactured for captive consumption, leading to litigation up to the Supreme Court. The bank guarantee furnished by the petitioner was partially encashed, and an amount remained outstanding. The High Court directed the Assistant Collector to entertain the rebate claim, which was initially challenged by the petitioner. The Assistant Collector refused the rebate claim, citing non-payment of excise duty as a prerequisite for claiming rebate. The parties reached a consensus during the hearing, with the petitioner agreeing to pay the outstanding excise duty by a specified date.

2. The petitioner challenged the legality and validity of the Assistant Collector's order, which was based on the non-payment of excise duty by the petitioner. The Assistant Collector's decision was supported by the petitioner's history of litigation up to the Supreme Court, where the claim for rebate was not successful. The petitioner's argument that the bank guarantee should be treated as payment of excise duty was rejected by the Assistant Collector, leading to the challenge by the petitioner.

3. The resolution of the dispute involved the petitioner agreeing to pay the outstanding excise duty by a specified date, after which they could file an application for export rebate. The High Court directed the Assistant Collector to entertain the rebate claim within the specified time frame and to decide on the application promptly. Upon payment of the excise duty, necessary documents for the rebate claim were to be forwarded to the Assistant Collector. The bank guarantee was to be returned to the petitioner once the excise duty was paid. The petition was withdrawn by the petitioner with the court's permission, and the interim relief granted earlier was vacated. The case was disposed of with no order as to costs.