Karnataka High Court
Alembic Glass Industries Ltd. vs Union Of India on 1 January, 1800
Equivalent citations: 1990(25)ECC39, 1990ECR180(KARNATAKA), 1990(48)ELT232(KAR)
JUDGMENT
1. In this writ petition filed by the petitioner's company, a manufacturer of glass ware, the order passed by the Assistant Collector of Central Excise, Bangalore,the second respondent herein, dated 22-2- 1989 (Anx- `h'), is challenged. By the said order a refund of Rs. 27,89,502-00 was granted to the petitioner rejecting the claim for refund of Rs. 14,80,663-98 Ps.
2. Certain antecedent facts and the chronology of events culminating in the impugned order are necessary to be mentioned at the outset.
3. A Writ petition was filed before this Court by the petitioner in W. P. No. 599.1975 challenging the validity of Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944 ("the Act") (as amended by Central Act 22/73)and a show case notice issued by the Assistant Collector proposing to withdraw the approval of price-lists and to include the cost of packing materials supplied by the buyers to the price of the goods purposes of levy of excise duty.
4. This Court upheld the validity of Section 4(4)(d)(i) of the Act following the decision of the supreme Court in Union of India & Ors. v. Bombay Tyre International Ltd. & Ors. ). So far as the show cause notice was concerned, it was quashed and a direction was issued to examine and decide the claim for refund of excise duty paid on the cost of packing material supplied by the buyers, in accordance with law.'
5. Dealing with the validity of the show cause notice, this Court rejected the contentions of the Department and the reliance placed by the Department on a Circular issued by the Collector of Central Excise, Bangalore. Allowing the writ petition this Court held that the cost of packing material supplied by the buyer himself should not be included in the value of the excisable goods for purpose of excise duty.
6. After the decision of this Court in W. P. No. 5995/75 dated 23-1- 1985 rendered by a Division Bench (of which I was Member), the petitioner made a claim for refund of the excise duty paid under protest up to 14- 5-1985. The said application was filed on 6-9-1985 claiming refund of Rs. 42,78,947-07 ps. being the total cost of packing materials supplied by the buyers.
7. The second responded, by his order dated 6-1-1988, granted refund of Rs. 27,89,502/- and disallowed the claim in respect of Rs. 14,80,663-98 on the sole ground that the petitioner had not passed on the benefit to the customers. He has relied upon Explanation to Section 4(4)(d)(i) for disallowing a part of the claim. This order was challenged before this Court in W. P. No. 9802/88. This Court, by its order dated 20-11- 1988, rejected the writ petition at the stage of preliminary hearing observing that the petitioner had an alternative remedy by way of an appeal under the Act.
8. The appeal filed by the petitioner before the Collector (Appeals) Madras, was allowed and the order of the Assistant Collector date 6-1- 1988 was set aside on the sole ground that it was made without hearing the petitioner and remanded the matter to him.
9. The Assistant Collector did not post the case for further hearing as directed by the Collector (Appeals but instead, issued another show case notice date 28-11-1988 calling upon the petitioner to show cause as to why the claim for refund of Rs. 14,80,663-98 ps. should not be rejected on the ground that the assessee had not proved that it had not passed on the benefit of refund to its customers. The second respondent made an order, after hearing the petitioner on 22-2-1989 confirming the show cause notice and denying the refund. This order is the subject-matter of this writ petition.
10. The case of the petitioner was argued forcefully and with clarity by Sri Dushyanatha Dave, the learned Counsel, and the respondents are represented by sri M. S. padmarajaiah, the learned Additional Central Govt. Standing Counsel.
11. The learned Counsel for the petitioner has put forward the following contentions :-
(i) that the impugned order dated 22-2-1989 (Annexure - H) is contrary to the Judgment and order of this Court in W. P. NO. 5995/75 and is, therefore, liable to be quashed;
(ii) the impugned order is contrary to law, inasmuch as the explanation of Section 4(4)(d)(i) of the Act is inapplicable and the rejection of the refund relying on the said provision is, therefore liable to be set aside; and
(iii) the denial of refund on the ground that the petitioner-company had not passed on the benefit to the customers, is contrary to the Judgment and order of this Court in Mangalore Chemicals v. Assistant Collector (1986) (23) E. L. T. 48 and the decision of the Supreme Court in Bombay Tyre International Case (1984 S.C. 420).
12 The Writ petition is resisted by the Central Government and a statement of objection is filed in support of their case. The case of the Department is that the second respondent was justified in rejecting the claim for refund of Rs. 14,80,663-98 p. relying on Explanation to Section 4(4)(d)(i) and the order passed is, therefore, in accordance with law. The argument of the learned Counsel is that the direction issued by this Court while disposing of the writ petition 5995/75 was to scrutinise the claim and make an order in accordance with law, and the view taken by the the second respondent, even if it is wrong, should be challenged only by way of an appeal and not in a writ petition. It is also stated that the Department has not accepted this Judgment and has filed as S. L. P., before the Supreme Court, which is pending admission.
13. The order is also sought to be supported on the additional ground that the petitioner had not passed on the benefit of refund to its customers and that, therefore, the second respondent was justified in rejecting part of the claim. The learned Standing Counsel has relied upon the decision of the Bombay High Court (Roplas Ltd. v. Union), which is in favour of the Department. On these grounds, the writ petition and the claim for refund of the remaining sum of Rs. 14,80,663-98 ps. is stoutly opposed and the action of the Department defended by the learned Counsel for the department.
14. On these arguments advanced by both sides, the following points arise for consideration :-
(i) Whether the cost of packing materials supplied by the buyers is includible in the value of goods cleared by the petitioner for purpose of levy of excise duty?
(ii) if not, whether the petitioner is entitled to the refund of the excise duty paid by it on such value for the period 2-12-1975 to 14-5- 1985?
(iii) whether the order of refund passed by the respondent on 6-1-1988 rejecting the part of the claim for refund is sustainable on facts?
(iv) Whether the respondent had jurisdiction to issue show cause notice dated 24-11-1988 raising an additional ground to reject a part of the refund amount on the ground of unjust enrichment? and
(v) Whether the Asstt. Collector's order dated 22-8-1989 (annexure `H'), is justifiable on facts and in law?
RE : POINT No. (i) :
15. This point, according to the petitioner is covered by the decision of the Supreme Court in Union of India & ors. v. Bombay Tyre International Ltd. & Ors. ; the decision of this Court in Alembic Glass Industries v. Union of India (1986) (24) E. L. T. 23 and Mangalore Chemicals v. Asst. Collector (1986) - (23) E. L. T. 48.
16 Since this Court had placed ... reliance on the decision of the supreme Court in the case of Bombay Tyre International Ltd. and in both the decisions referred to above it is necessary, first, to refer to the said decision : and its ratio.
17. The main question that came up for decision, among other issues, in that case (S.C.) was :
"Whether any post-manufacturing expenses are deductible for the price when determining the `value' of the excisable article?
18. The Supreme Court observed that the case in respect of the cost of packing is somewhat complex. What upholding the validity of Section 4(4)(d)(i) of the Act, the Supreme Court considered, in detail, the broader question as to mode of determination of the value in relation to the coast of packing under section 4(4)(d)(i) of the Act. In so doing, the supreme Court examined the provisions of the Central Excise Act with particular reference to inclusion of the cost of packing in the value of excisable goods. The discussion on this aspect is summed up by me as follows :-
19. For purposes of Section 4, "value" in relation to any excisable goods delivered at the time of removal in a packed condition, includes the cost of such packing, except the cost of the packing which is of a durable in nature and is returnable by the buyer to the assessee.
20. The Supreme court drew a clear distinction between primary packing and secondary packing while considering the price of an article in relation to its value and the several components which go to enrich its value upto the date of sale, which includes the cost of packing also invariable.
21. As regards the cost of primary packing, it was observed that such packing should be understood as the packing in which goods are wrapped, contained or wound when the goods are delivered at the time of removal. The cost of primary packing, that is to say, the packing on which it is made marketable for the ordinary consumer, for example a tube of toothpaste or a bottle of tablets in a cardboard carton, or biscuits wrapped in a paper or in a ten container, must be regarded as falling within Section 4(4)(d)(i) of the Act.
22. As regards the cost of secondary packing like larger `cartons' supplied by the manufacturer for easy transportation of goods by the wholesale dealer, it was held that the cost of secondary packing toe to the extent it was necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate, was held includible in the wholesale cash price of the excisable article at the factory gate.
23. As regards special secondary packing, it was held in para - 54 thus :-
"If any special secondary packing is provided by the assessee at the instance of a wholesale buyer which is not generally provided as a normally feature of the wholesale trade, the cost of such packing shall be deducted from the wholesale cash price."
24. The relevant discussion on these aspects is found n paragraphs 49 to 54 of the Judgment.
25. Let me now refer to the two decisions of this Court - First - Alembic Glass Industries case of the very same petitioner.
26. As stated earlier, the show cause notice issued to the petitioner - company proposing to withdraw the approval accorded earlier and to include the cost of packing material supplied by the buyers in the assessable value, was challenged by the petitioner in the above case. This Court, while quashing the show cause notice held as follows :- (Para 15 in W. P. No. 5995/75).
"15. The term `value' exhaustively defined in Section 4(4)(d)(i) of the act provides for `excluding the cost of packing material which is of durable nature and is returnable by the buyers to the assessee'. Sri Bhat does not dispute that by the buyer, is to be excluded on the very definition of the term `value' found in Section 4(4)(d)(i) of the Act. If that is true, we fail to see any logic or reason for not excluding the packing material supplied by the buyer himself which is of durable nature and is returnable by the assessee to the buyer. What is true of the former is also true of the latter. We are of the view that the provision providing for excluding the cost of packing material of durable nature and returnable by the buyer to the assessee must also be read as providing for the converse situation also, as any other construction would do violence to the language of Section 4(4)(d)(i) of the Act and create an artificial definition of that term".
27. For coming to this conclusion this Court relied upon the decision of the Supreme Court in Bombay Tyre International case and the decision of the Gujarat High Court in the case of the sister - concern of the petitioner - Alembic Glass Industries, Baroda v. Union of India (1989) (2) TLR 2251) and the Full Bench decision of the Government of India in Gujarat Fertilisers [1982 (10) ELT 472]. This Court, while allowing the writ petition in part, quashed the impugned show cause notice and directed the department to examine the claim for refund 'in accordance with law'.
28. In Mangalore Chemicals case, this Court categorically held that the cost of packing material supplied by the buyer is not includible in the value of the excisable goods for purposes of charge to excise duty. It was held in para 29, as follows :-
"29. In determining the `value' of the `assessable value', under Section 4 of the Act, the first part of the explanation declares that the amount of duty of excise on any excisable goods shall be the sum total of the effective duty of excise on such goods chargeable under the Act or the aggregate of excise duty payable on such goods under any other central Act. The effective duty or the duty actually chargeable or payable only should be exempted or excluded. What is chargeable is only the real or actual excise duty chargeable under the Act or other Central Act thereto on such goods. This is the first general import of the explanation and has no relevance to the other part of the explanation relating to case of exemptions granted by the Government with which we are primarily concerned. which however is closely interlinked with the first. The second part of the explanation provides that in computing the effective or actual excise duty referred to in clauses (a) and (b) to which exemption have been granted by Government then so much of duty that is actually paid by the assessee shall alone be computed. In other words, only the duty as reduced and actually paid on the manufactured goods should be excluded in determining the assessable value of goods. that are not governed by exemptions either partial or whole the duty chargeable under the Act had to be excluded. But in cases of exemptions only the actual or real duty paid by the assessee shall alone by excluded and not the duty hypothetically chargeable under the Act. The point may be illustrated thus : We shall take that on a manufactured goods `A', the duty chargeable under the Act is Rs. 100/- but Government by a notification had reduced the same by Rs. 50/- and thus the assessee pays Rs. 50/- on such a manufactured goods. In determining the assessable value of goods `A', the assessing authority is required to exclude only Rs. 50/- actually paid or payable by the assessee and not Rs. 100/- chargeable under the Act. All that the explanation provides is to regulate the assessable value on the realities of the situations and not on any notional basis. We are of the view that this explanation does no more than this".
29. It was, therefore, ruled by this Court that adding back any duty that is not passed on to the consumer or paying any additional duty on the same on the ground that the same had not been passed on to consumers, as if that was a requirement of the explanation, is wholly misconceived and is not sound. (See : Para 31).
30. It was argued by Sri Dave that the 2nd respondent has deliberately omitted to refer to the decision of this Court in Mangalore Chemicals case and chose to give his own interpretation on the direction given by this Court in W. P. No. 5995/75. His argument is that the second respondent has adopted an ingenious argument to circumvent the direction issued by this Court and has invented a new ground to reject part of the claim for refund.
31. It is demonstrated by the learned Counsel that the reasoning adopted by the second-respondent for rejecting refund of Rs. 14,80663- 98 ps. out of the total claim of Rs. 42,78,947-07 ps. was on the basis that it represented the duty paid on the packing materials supplied by the buyers and this being the undisputed factual position, no other reason could be put forward in granting refund of Rs. 27,89,502/- only disallowing Rs. 14,80,663-98 ps. The mode of calculation as is seen from the order dated 6-1-1988 produced before me by the learned Counsel is this :-
"The claim for refund is in respect of those gate passes which have an endorsement to state 'cartons supplied by the customers' and all the gate passed have got endorsement to the effect that the Excise duty on packing charges paid under protest. No claims for refund has been made in respect of supplies made in the packings supplied by the assessee himself or in packings other than cartons supplied by themselves or by the buyers. Accordingly the claim has been examined and the admissible amount of refund has been worked out as follows :
(1) Amount claimed Rs. 42,78,947-07 (2) Amount not taken up for consideration because of non-production of PLA for the month of Dec. 75, Rs. 8,781-11 (3) Amount disallowed as the assessee is not passing on the benefit to the customer. Rs. 14,80,663-98 (4) Amount eligible for refund is (as per Rs. 27,89,501-91 the Annexure)
32. The second respondent included the entire duty of Rs. 42,78,947-07 ps. to the value of the goods for the purpose of levy of excise duty and proceeded to levy duty on the said amount at 30% to 35%, plus the special excise duty, which comes to Rs. 14,80,663-98 ps.
33. The next stage of computation was to deduct Rs. 14,80,663-98 ps. out of Rs. 42,78,947-07 ps, and the amount eligible for refund so arrived at comes to Rs. 27,89,502/-. The common reason for disallowing Rs. 14,80,663-98 ps. both in the order dated 6-1-1988 and the impugned order dated 22-2-1989 is , that the petitioner did not produce any proof for having passed on the benefit of refund to its customers.
34. The next stage of computation was t deduct Rs. 14,80,663-98 ps. out of Rs. 42,78,947-07 ps, and the amount eligible for refund so arrived at comes to Rs. 27,89,502/-. The common reason for disallowing Rs. 14,80,663-98 ps. both in the order dated 6-1-1988 and the impugned order dated 22-2-1989 is, that the petitioner did not produce any proof for having passed on the benefit of refund to its customers.
34. The basis for denying part of the claim and reasoning adopted by the 2nd respondent for doing so is sought to be demolished by the learned Counsel for the petitioner on more than one ground:Firstly, it is argued that the second respondent was bound by the law declared by this Court in Mangalore Chemicals case and the action in denying the full refund amounts to fulfill disregard of the law laid down by this Court in the said case, and the direction given by this Court in W. P. No. 599/75. It is also argued that the S. L. P., filed by the Department against the said Judgment is still pending admission before the supreme court and that, therefore, the refund cannot be withheld on the ground.
35. Secondly, it is argued that the second respondent by his order impugned in this writ-petition has tried to read in between the lines and has given an interpretation of his own for rejecting part of the claim on the ground of `unjust enrichment' which was not permissible in law to be invoked. It is further argued that the Asst. Collector being a creature of the statute is bound to determine all questions only in accordance with the provisions of the statute and no other ground outside the statue viz., S. 11B can be invoked by the statutory authority.
36. In support of this argument, he has relied upon the decision of the Supreme Court in the case of Collector of Central Excise v. Doaba Co- operative Sugar mills (1988) (37) E. L. T. 478 and also other decisions of the CEGAT reported in (i) 1987 (30) ELT 641; (ii) 1985 (22) ELT 539 and (iii) 1986 (26) ELT 394.
37. The principle of law that flows from the enunciation laid down by the Supreme Court in Doaba's Co-operative Sugar Mill's case is that the doctrine of `unjust enrichment' is a principle in enquiry that can be invoked only by Court and not by the authorities under the Act. He has also relied upon the decision of the supreme court in S. T. O. v. Kannayatal (1959 S.C.135) and D. Cawasji v. C. T. O. .
38. Apart from the catena of decisions of the various High courts wherein the plea of `unjust enrichment' raised on behalf of the revenue was rejected, the learned Counsel has relied upon the latest decision of the supreme Court in Mahaveer kishore v. The state of Madhya Pradesh (1989) (Vol.3) - Judgments Today at page 327, wherein it is held by the Supreme Court that, denial of refund of tax collected illegally amount to unjust enrichment of the revenue. (Emphasis by me)
39. Lastly, the decision of the Supreme Court in Hindustan Polymers v. Collector of Central Excise 1989 (43) E. L. T. 165 (S.C.) (Pronounced on 23-8-1989) - (C. A. Nos. 4333 to 4341/86) was cited before me after I reserved the matter for orders.
40. The matter was posted for further hearing to hear the Counsel for the Department on this decision.
41. It is useful to refer to the observations made by their lordships in the said judgments since, in my opinion, the ration of the said decision squarely applies t the facts of this case.
42. Justice Sabyasachi Mukharji in his leading Judgment has largely relied upon the Judgment of the Supreme Court in Bombay Tyre International case to reject the contentions and the interpretation placed by the learned Attorney General on behalf of the Department.
43. I sum up and reproduce what his Lordship held in that case, in my own words thus:-
The value of the drums supplied by the buyer in that case at its cost for the purpose of filling the fusel - oil manufactured by the appellant to take delivery of the oil after it was delivered by the manufacturer, was sought to be included by the Department in the value of the goods delivered for purposes of excise duty.
44. The Supreme Court examined, in detail, the scheme of the Act, vis- a- vis, the definition of " manufacture" in Section 2(f) of the Act and the scope of Section 4 providing for valuation of excisable goods for purposes of charging duty of excise. Dealing with the definition "value of excisable goods" in the context of including the cost of packing in the value, the Supreme court held, that the expression, `place of removal' and packing used in Section 4(4)(d) should be understood and judged in the light of the principles laid down in Bombay Tyre International case and the charge to duty must be determined strictly in terms of Section 4 of the Act.
45. The test, according to their Lordships, to be applied in a case where the containers or other packing material is supplied by the buyer, is to find out whether the manufactured goods had become marketable without the containers supplied by the buyer and whether the manufacturer had incurred any cost of such packing and it was incidental or ancillary to the manufacture ?
46. It was categorically held that Section 4(4)(d)(i) does not make any provision for including the cost of packing, which is supplied by the buyer and the Legislature had appropriately thought it fit to exempt such packing from the value of excisable goods. Holding that this is the correct way to interpret the provisions, the supreme Court incidentally approved the view taken by this Court in Alembic Glass Industries v. Union of India (1986 (24) ELT 23), that there is no logic or reason for not excluding the value of the packing material supplied by the buyer himself.
47. The Supreme Court further proceeded to observe that it would be repugnant to the very scheme of Section 4, it the value of packing materials supplied by the of packing supplied by the buyer to the assessee is made a part of the assessable value while the value of durable packing material supplied by the assessee and returnable to the manufacturer, is not to be included in the assessable value.
48. The Supreme Court also observed that the essential basis of the `assessable value' under Section 4 is the wholesale cash price charged by the assessee and the measure of excise duty is the price charged by the manufacturer and not on the basis of any national value added to the actual wholesale cash price. While allowing the appeals of the manufacturer, the Supreme Court approved the views expressed by the Bombay High Court in Govind Pay Oxygen Ltd. v. Asst. Collector of Central Excise, Panaji (1986 (23) ELT 394), and held that the approach of the Bombay High Court was the correct view.
49. It is, therefore, necessary to refer to the said decision.
50. The question that arose for decision in that case was : whether the price of the cylinders which the buyers supplied to the petitioners for delivering the gas to the buyer, could be included in the value of the gas manufactured and sold by the petitioner?
51. The High Court of Bombay, repelling the contention of the Department held thus :-
"para - 3, We do no find any substance in either of thee contentions urged on behalf of the respondents. Section 4(d)(i) does not make any provision for excluding the cost of packing which is supplied by the buyer to the assessee for the its cost cannot be included in the value of the excisable goods. It is for this simple reason that the Legislature has not thought it fit to exempt such packing from the value of the excisable goods".
52. It is lastly urged, having regard to the conduct of the department in unreasonably with holding and denying of a refund of part of the claim, the petitioner is entitled to the refund of the said amount with interest at the bank rate at 18% per annum from the date of payment till the date of refund. In support of the refund with interest, the learned Counsel has relied upon the decisions of the Bombay High Court in the case of Metal Distributors (1988) (33) ELT 321, and of Andhra Pradesh High Court reported in 1988 (36) ELT 537. (See : also 79 ELT 546).
53. In reply to the arguments advanced on behalf of the petitioner, Sri Padmarajaiah has sought to justify the action of the second respondent in rejecting the part of the claim. It must be stated, at the outset, that he is not able to give any satisfactory answer or explanation as to how the part of the claim - nearly 2/3 of the claim viz. Rs. 27,89,502/- was refunded while rejecting a part of the claim. He, however, relies on the observation made by this Court while disposing of the W. P. No.5995/75 that the claim of the petitioner for refund may be considered `in accordance with law'.
54. The argument developed on the basis of this observation is that the second respondent has examined that claim in accordance with law viz., in the light of explanation to Section 4(4)(d)(ii) of the Act. Elaborating his arguments on this aspect, Sri Padmarajaiah tried to justify the action of the second respondent on the ground of `unjust enrichment' and, this should be construed as consideration of the assessee's claim for refund `in accordance with law'.
55. The claim for refund examined in the light of this principle, Sri Padmarajaiah submitted, that the `effective duty' of excise payable by the petitioner by adding the cost of packing material supplied by the buyers was first determined by the second respondent in his order dated 6-1-1988 and after determining the duty so payable on the enhanced value and deducting the same from the amount claimed, the sum of Rs. 27,89,,502/- was determined as eligible for refund. The manner of calculation adopted by the second respondent is on the basis of a notional determination of the assessable value arrived at by adding the excise duty that was not passed on to the buyers.
56. It is finally submitted by the learned Counsel that the petitioner is not entitled to the refund of a part of the claim in view of the Judgment of the Bombay High Court in the case of Roplas Ltd. v. Union of India (1989) Bombay 183, in which applying the doctrine of unjust enrichment, the claim for refund was rejected by the Bombay High Court.
57. Thus, what emerges from a review of all the case law referred to above is that it is the well settled position in law that the assessable value ... is to be determined as provided under Section 4 of the Act. That the leading decision on this question is the Bombay Tyre International case, cannot be disputed. This decision was followed by this Court both in Alembic Glass industries case, and Mangalore Chemicals case. This legal position is again reiterated by the Supreme Court in its latest decision in Hindustan Polymers case 1989 (43) E. L. T. 165 (S.C.)
58. The gist and the ratio of all these decisions is that the value of packing material supplied by the buyer should not be included in the value of the goods for purposes of charge to excise duty.
59. The reason now adopted by the Asstt. Collector in the impugned order, is they very content of the Circular of the Collector relied upon by the Asstt. Collector to issue the show case notice which was quashed by this Court in W. P. No. 5995/75. It was, therefore, not open to the Asstt. Collector to deny the refund, this time, on the ground of unjust enrichment.
60. What was required to be done by the Department after the disposal of W. P No. 5995/75 was to scrutinise the claim for refund strictly applying the provisions governing the refund and not to discover a fresh ground of "unjust enrichment" to reject the claim.
61. There is no warrant under the provisions of the Act to deny the refund on the ground of "unjust enrichment" by including the notional cost of packing materials supplied by the buyers in the assessable value.
62. The Central Government is expected to grant refund which is legitimately due to the assessee if the facts warrant refunds, ungrudgingly and with the same promptitude as they do while recovering the revenue due from the assessees.
63. On the very reasoning adopted by the Department to grant refund of a part of the amount in its order dated 6-1-1988, the remaining amount was also eligible for refund, since the entire amount represented the excess duty paid on the value of packing materials supplied by the buyers. The basis on which the refund was denied is, therefore, a self-contradiction in terms, and argument of the department in support of this method of bifurcating part of the amount as not eligible for refund has, therefore, to be rejected. What is more surprising is that the second respondent, who was bound by the ruling of this Court in Mangalore Chemicals case, in which the trade notice 58/77 dated 21-3- 1977 issued by the Collector of Central Excise, Bangalore, was quashed, does not choose to follow that decision. This Court held, in categorical terms (para 29), that only the actual or real duty paid by the assess should be included under Section 4(4)(d)(ii),and not the duty hypothetically chargeable under the Act. (in accordance with the Trade-notice).
64. This Court further held that adding back any duty that is not passed on to the consumer or paying any additional duty on the same, on the ground that the same had not passed on to the consumers as if that was a requirement of the explanation, was wholly misconceived and was not sound. (See; Para 31).
65. The order now made by the second respondent is passed ignoring the said Judgment which was cited before him. The Assistant Collector has virtually tried to circumvent the the order of this Court made in the earlier writ petition filed by the petitioner, i.e., W. P. No. 5995/75 taking cover under the directions given therein, namely, that the claim for refund be determined 'in accordance with law'.
66. Having regard to the well settled position in law laid down by the Supreme Court and the two decisions of this Court referred to above, the writ petition should succeed. It is accordingly allowed and the impugned order (Annexure - `H'), is quashed.
67. The Department is bound to refund this amount of Rs. 14,80,663-98 notwithstanding the filing of the S. L. P. against the order of this Court in W. P. No. 5995/75.
68. The Supreme Court, in Collector of Customs v. Krishna Sales Pvt. Ltd. - (1989) (41) E. L. T. 374 (S. C), has held that the detention certificate should not have been rejected on the ground that the appeal by the Collector of Customs was pending before the Supreme Court. The same Principle, in my opinion, should hold good in this case also, since the S. L. P., filed by the Department against the order made by this Court in W. P. No. 5995/75 is yet to be admitted, according to the Counsel for the Department.
69. As a result, I order issue of a writ in the nature of mandamus to the second Respondent to refund Rs. 14,80,663-98 with interest at 12% thereon from 23-1-1985 the date of Judgment in W. P. No. 5995/75 upto the date of refund, since the amount which was legitimately due to the petitioner was withheld for no justifiable reason.
70. The petitioner is also entitled to cost of this petition, which is assessed at Rs. 5,000/- for driving the petitioner to approach this Court, for the third time, to seek the same relief.