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TMI Blog2009 (2) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... herein. Resultantly, the said award stands set aside. 2. The appellant had made five claims before the Arbitrator of which claim nos. 1 and 3 to 5 were rejected. Claim No. 2 for Rs. 3,10,865/- towards excise duty @ 10%, with interest @ 15% p.a from the date of the award had been allowed by the Arbitrator. The counter claims preferred by the respondent-UOI were rejected. The respondent preferred objections to the award under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act') on the ground that the award of Rs. 3,10,865/- towards 10% excise duty is contrary to the terms of the agreement. As aforesaid, these objections were allowed, and the award set aside. 3. The relevant facts may be stated at this stage to app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s excise duty, as according to the appellant, the payment of 10% towards excise duty was a "firm" and "fixed" contract. Merely because the appellant had obtained excise duty exemption, according to the appellant, the respondent could not seek to derive the benefit of that exemption and the appellant was entitled to retain the said benefit for itself. The appellant, consequently, sought the upward revision of the contract price by 10%. Upon learning of the exemption obtained by the appellant from payment of excise duty, the respondent vide communication dated 4-6-1997 amended the rate contract so as to provide for "nil excise duty". The respondent, therefore, did not agree to the appellant charging an additional 10% towards price of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty. The learned single Judge also noted that on the arbitrator's record, the appellant had failed to produce any document to show that excise duty at the rate of 10% had in fact been paid by it for the period in question. He took note of the fact that even according to the appellant, it had not paid excise duty at the rate of 10%. In paragraphs 11 and 12 of the impugned Judgment, the learned single Judge held as follows :- "11. It was held in K.P. Poulose v. State of Kerala - AIR 1975 SC 1259 the Apex Court held that if the arbitrator arrives at inconsistent conclusions it amounted to misconduct within the meaning of Section 30 of the 1940 Act. Again in UOI v Pundari Kakshudu & Sons - AIR 2003 SC 3209 it was held that award was l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her pleaded nor proved any payment of excise duty to the excise department, was under the terms of the agreement not entitled to the excise duty and I thus find the award to be contrary to the terms of the agreement and liable to be set aside on this ground as well. The counsel for the petitioner, Union of India, has rightly relied upon Hindustan Zinc Ltd. v. Friends Coal Carbonistion, 2006 (4) SCC 445 reiterating that an award against the terms of the contract would be patently illegal and open to interference by the court under Section 34(2) of the Act." 8. The submission of learned counsel for the appellant is that the appellant was entitled to recover 10% extra on basic price on account of excise duty, irrespective of whether or not th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid the excise duty sought to be recovered, and produced documents in support thereof before the Arbitrator. However, he did not answer this question and kept on insisting that the appellant was entitled to recover excise duty at the rate of 10%, irrespective of whether or not the same was charged to the appellant, or paid by it. Since excise duty is paid to the government, the same is bound to be accounted for and documented. Had the amount claimed been in fact paid towards excise duty, there would have been no difficulty in establishing the same by producing challans/receipts of payment. Mere self serving statements showing computation of the amount claimed, relied upon by the appellant could not constitute evidence to establish payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred bona fide. In our view, the claim made by the appellant was wholly unreasonable and unsustainable in law, and defied basic commonsense. We, therefore, impose cost of Rs. 10,000/- on the appellant for wasting judicial time of this Court by preferring the present appeal and pressing the same. The costs should be paid to the Prime Minister's Relief Fund within four weeks. 11. We must also express our anguish at the manner in which the Arbitrator, Mr. B.L. Nishad has dealt with the aforesaid claim of the appellant. Mr. B.L. Nishad at the relevant point of time was the Additional Legal Advisor to the Government of India, Ministry of Law, Justice and Company Affairs, Department of Legal Affairs at Sashtri Bhawan, New Delhi. The award made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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