9911796707
TMI Blog1991 (10) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... "patta-patti" and therefore it was falling within Tariff Item No. 26AA(iA) or 25(8). (since the description of the respective item is not material for determining the question at issue discription of each item is not mentioned). The petitioner had made claim of refund of the amount of excise duty paid by it on account of wrong classification. Ultimately, the case of the petitioner as regards proper classification was upheld and an amount of Rs. 6,05,122.62 ps. (Rupees six lacs five thousand one hundred twenty-two and paise sixty-two only) and another amount of Rs. 7,18,098.25 ps. (Rupees seven lacs eighteen thousand ninety-eight and paise twenty-five only) i.e. total amount of Rs. 13,23,820.88 ps. (Rupees thirteen lacs twenty-three thousand eight hundred twenty and paise eighty-eight only) have been ordered to be refunded to the petitioner. The amount of refund has been paid to the petitioner. 2.The petitioner filed claim for compensation of use and retention of its money collected unauthorisedly by the department. The compensation is measured in terms of interest at the rate of 18% and the amount claimed was Rs. 14,67,748.44 ps. (Rupees fourteen lacs sixty-seven thousand seven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st by the petitioner is wrongly denied by the department. It is also contended that the provisions of Section 40 of the Act which extends protection to the Government and its officers for actions taken in good faith would not control the powers of this Court under Article 226 of the Constitution of India. It is further submitted that the petitioner claims interest by way of damages. Interest is claimed as quantified damages, that is the only possible way to quantify damages and therefore it is termed as interest. 5.As for as the impugned order dated April 5, 1991 passed by the Assistant Collector of Central Excise produced at Annexure-B is concerned, it cannot be said that the order is in any way unlawful, unjust or arbitrary. Be it noted that the officers appointed under `the Act' and exercising powers under `the Act' are bound by `the Act'. They are creatures of the statute. They cannot go beyond the provisions of the statute. Learned Counsel for the petitioner has fairly conceded that the Act and the Rules framed thereunder did not make any provision whatsoever for payment of interest in respect of alleged or proved unlawful recovery of amount of excise duty. The Act and the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cers. It may also be noted that similar view was taken by the officers exercising powers even in Rajasthan area. Thus there was a scope for difference of opinion as regards correct classification of the product in question. Precisely such cases are covered by the provisions of Section 40 of the `the Act'. Hence even if it is assumed that on account of the erroneous interpretation of the provisions of Central Excise Tariff the petitioner was made to pay excise duty in excess of something which was lawfully payable, it cannot be said that the department has acted with mala fides or that the action of the department was lacking good faith. In view of the aforesaid position of law not only there is no provision for payment of interest but there is contrary provision which protects the Government and its officers in the event of any such erroneous action. In view of this position of law, the order passed by the Assistant Collector refusing to pay interest is eminently just and proper and the same cannot be said to be in any way contrary to law. 8.Realising the aforesaid difficulty the learned counsel for the petitioner submitted that this Court should exercise its power under Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers provision is made way back in the year 1940 in the Sale of Goods Act, 1930. By amending the provisions of Sale of Goods Act, Section 64A has been inserted and the vendor will be in a position to pass on the additional burden to excise duty, if before the delivery of the goods excise duty is increased. Similarly, the purchaser would be entitled to say that he would pay less amount if the amount of excise duty is decreased. Later on in this section similar provision is made with regard to the amount of sales tax also. This indicates that the legislature is conscious of the reality of the world of business and commerce. It is also settled position of law that the duty of excise is indirect tax or it is a tax on commodity. It is not required to be borne by the manufacturer or the subsequent seller. The burden of it is made to pass on to the ultimate consumer. That is why in economic jargon it is also called commodity tax. This position of law is made clear by the Supreme Court in the case of R.C. Jall v. Union of India, reported in AIR 1962 SC 1281. In view of the aforesaid position of law and having regard to the realities of the world of commerce, one would be acting in unbusines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business always involves element of risk. Business means adventure. It does not mean safe and regular return on capital invested. If there is no risk there is no profit. One who enters the world of business enters the same with open eyes and calculated risk. In some such adventures one may suffer loss. This court at the most may sympathise with such entrepreneurs. But for such loss such unfortunate entrepreneurs cannot make any claim and even if such claim is made the High Court would not exercise its power under Article 226 of the Constitution of India because while exercising such powers in favour of businessmen the court would not be acting in aid of justice or preventing injustice, instead the court may inflict injury on the society and may do effective injustice to the society. 12.Even assuming that we were to decide the case on the basis that suit for claim of compensation is filed, then also the case of the petitioner is not on sound footing. One of the basic principles of awarding of damages in tort is that damages should not be remote. Remoteness of damages is good ground for denial of compensation. To say that the petitioner could not withstand the competition in the op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay interest to the policy holders. In fact the principal question before the Supreme Court was as regards the rate of interest. The High Court has granted 15% interest considering the same to be reasonable. It was contended that 12% interest should have been awarded and not 15%. In this connection the Supreme Court has inter alia observed as follows : "We are not impressed by this argument. The High Court has relied on the fact that interest @ 15% p.a. is reasonable, in the present case, particularly in view of the fact that the LIC itself charges interest at that rate. It is sufficient for us to state that there is no material produced, in the present case, to suggest that award of interest @ 15% p.a. is excessive to permit interference with the rate in this appeal particularly when the High Court has come to the conclusion that this is the reasonable rate. This argument also is, therefore, rejected." For the aforesaid reasons, the decision is of no help to the petitioner. 15.Learned Counsel for the petitioner has relied upon the case of Geep Industrial Syndicate Ltd. v. Union of India, reported in 1990 (47) E.L.T. 311 (All.). In that case the Division Bench of the Allah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Municipality v. Dhrangadhra Chemical Works Ltd., reported in 1988 (34) E.L.T. 605 (Guj.) = 29 (1) GLR 388 and Union of India v. Wood Papers Ltd. reported in 30 (2) GLR 1323]. For these reasons we are unable to persuade ourselves to agree with the view taken by the learned Judges of Allahabad High Court. 17.Learned Counsel for the petitioner has relied upon the decision of the Rajasthan High Court in the case of Swastik Metals v. Union of India, reported in 1990 (49) E.L.T. 45 (Raj.). This is a case in which the same product, i.e. stainless steel patta/patti was in question. It was wrongly classified as falling in Tariff Item No. 26AA(ii). The manufacturer paid duty under protest. However, ultimately the manufacturer succeeded at the highest level, i.e. at the stage of Tribunal under the Act. No reason is assigned as to why the manufacturer should be awarded interest although there is no provision in the Act. There is no reference to the provisions of Section 40 of the Act. In view of this position also we are not in a position to persuade ourselves to agree with the view taken by the Rajasthan High Court. 18.Be it noted that the case of Swastik Metals (supra) before Rajasthan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefits on his retirement. These terminal benefits are required to be paid within reasonable time after the retirement. In such cases liability to pay interest arises on account of the provisions of the Interest Act, 1978 inasmuch as the amount of wages as and when it becomes due forms the character of debt. Again, it is a sum certain. In such cases payment of interest is considered as an implied term of contract of employment. If such term is not read as part of the contract of employment no employer would pay the amount of wages and retirement benefits on due dates. In the contract of employment, it is necessary to read the condition of payment of interest as implied term of contract. This is the view taken by a Division Bench of this High Court in the case of Saijpur Bogha Nagarpalika Octroi Karmachari Mandal v. Ahmedabad Municipal Corporation, reported in 1991(2) G.L.H. 186. For these reasons the decisions of the Supreme Court in the case of Devaki Nandan Prasad (supra) and in the case of Ram Pal Singh (supra) are of no help to the petitioner. 22.Learned Counsel for the petitioner relied upon an unreported decision of the Delhi High Court in Civil Writ Petition No. 2422/90. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of Municipal Borough, Ahmedabad v. Vadilal, reported in AIR (31) 1944 Bombay pg. 233. In that case the case question arose before Bombay High Court as to whether the tax payer was entitled to claim refund with interest on the amount of tax illegally recovered. The lower court had allowed the claim of interest made by the tax payer. Beaumont C.J. reversed the judgment of the trial court and held that interest can be claimed only in circumstances provided under the Interest Act. Negativing the contention that interest can be claimed on the principle of justice, equity and good conscience, it is inter alia observed that interest cannot be allowed by way of damages. It may be allowed where there is an agreement for the payment of interest or it is payable by the usage of trade having the force of law. It is also held that the claim of interest would not be maintainable even in tort. Reference was made to Section 206 of Bombay Municipal Boroughs Act, 1925 which protected the Municipality and the officers for actions taken in good faith. While deciding Special Civil Application No. 998 of 1980, the Division Bench of this High Court agreed with the decision of the Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
