TMI Blog1989 (11) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... tain directions and findings in an order dated August 6, 1986 passed by the Collector of Central Excise (Appeals), Calcutta on the appeal of the Company against an order passed by the Assistant Collector of Central Excise dated March 3, 1986. In the said appeal of the company against the said order dated March 3, 1986 of the Assistant Collector, the Collector (Appeals) accepted the submissions of the Company as to the classification of the said Electrical Insulators but decided against the company insofar as the period for which refund of the duty paid was to be allowed. Although the period in dispute was from April 1970 to February 6, 1978 the Collector (Appeals) restricted the refund for a period of 6 months only purportedly under Section 11B of the Central Excises Salt Act, 1944 (in short the Act ). The petitioners have challenged the order of the Collector (Appeals) insofar as the directions for granting refund for 6 months was made. The order of the Assistant Collector dated March 3, 1986 is challenged by the petitioners in its entirety. However, the said order dated March 3, 1986 has HOW merged in the order of the Collector (Appeals) dated. August 6, 1986. 4. The short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75 the Madras High Court delivered a judgment in the case of English Electric Company of India Ltd. v. Superintendent of Central Excise and Ors. reported in 1979 ELT-J 36 holding, inter-alia, that electric insulators (H.R.C. Cartridge Fuse Links) are not and cannot be said to be porcelainware and that the same cannot be covered by item No. 23B of the first schedule to the said Act. It was further held in the said judgement that simply because the said fuse links were made of porcelain, the same cannot be covered by the said item No. 23B. The said decision in the case of English Electric Company of India Ltd. (supra) was followed by the Madras High Court in the case of W.S. Insulators of India Ltd. v. Secretary, Ministry of Finance reported in 1976 ELT J 160 . In the case of W.S. Insulators of India Ltd. it was, inter-alia, held that the porcelain contents of the lightening arresters cannot be subjected to duty under item No. 23 B of the first schedule to the said Act in as much as the same could not be regarded as porcelainware. 11. The petitioner No. 1 came to know about the said decision in the case of English Electric Company of India Limited for the first time in or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r duty was required to be paid by the said manufacturers on the porcelain parts separately. In the circumstances the first petitioner again addressed a letter dated January 12, 1978 to the Assistant Collector requesting him, inter-alia, to allow the first petitioner to clear the said insulators manufactured at the factory by paying central excise duty only under item No. 68. 14. On 26th December, 1977 the first petitioner filed refund application claiming refund of the excess amounts collected from it on the said insulators during the period from April 1970 onwards. The said refund claim was, however, returned by the Department alleging some irregularities and after curing the alleged defects the same was again submitted by the first petitioner on June 23, 1978. The said refund application was filed for refund of the amounts collected from the first petitioner under item No. 23B after deducting the amounts payable on the said insulators under item No. 68. 15. As no appropriate action in the matter was taken by Central Excise Authorities and as the Central Excise Authorities insisted for payment of their said wrongful and illegal demands, the petitioners filed a writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had prayed for quashing of the assessments of Excise Duty under Item 23B and for directing the respondents to refund all excise duties already recovered. The learned Judge was not inclined to decide the dispute in the writ petition. The learned Judge observed that only after evidence was given as to the popular meaning of the expression Porcelain-ware it would be possible to pronounce whether the Porcelain parts of the Insulator were independent and separate goods liable to be assessed under Item 23B of the Act. The operative part of the said judgment of His Lordship is set out herein below: I accordingly, propose to quash the assessments made under Item No. 23B of the First Schedule of the Central Excises and Salt Act,1944 upon the petitioners' finished product and to remit the matter for fresh assessment in accordance with law. I, accordingly, make this Rule absolute, quash the assessments of excise duty upon electric insulators made partly of porcelain and partly of metal during April 1970 upto the date of the issue of the instant Rule and command the respondents to pass fresh orders for assessment or for refund as the case may be. The respondents after givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer should have disposed of the matter as required in pursuance of the directive of the Hon'ble High Court, Calcutta instead of spliting of the same one for the purpose of refund. To say the least, this is against the spirit of the direction of the Hon'ble High Court. 20. Thereafter the Assistant Collector passed another order dated March 3, 1986 in which contrary to his earner order he held that the Porcelain portion of the Insulator was liable to be assessed to duty under Item 23B upto February 28, 1975 and thereafter on and from March, 1975 under Item 68 of the Tariff Schedule. The Assistant Collector further observed that the refund should be granted only for a period preceding 6 months from the date of submission of the refund claim since the claim for the period prior thereto was barred by limitation under Rule 11 of the Central Excise Rules, 1944 (in short the Rules ). This is one of the orders challenged in the instant writ application. 21. On the appeal of the Company against the said order dated March 3, 1986 the Collector (Appeals) set aside the order of the Assistant Collector holding that the Porcelain portion of the Insulators were assessable to duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessable as Porcelain-ware or not under Item 23B of the Tariff Schedule is not involved herein. The Collector (Appeals) has held that the said Insulators are not assessable as Porcelain-ware. 28. The only issue which falls for consideration in this application is whether the order of the Collector (Appeals) upholding the order of the Assistant Collector to the effect that refund of the duty illegally recovered cannot be granted for more than a period of 6 months form the date of the claim is sustainable in law ? 29. It is no doubt true that the assessee has an alternative remedy under the Act to challenge the decision of the Collector. But it is not an absolute bar to the maintainability of the writ petition. Where only legal issue has to be decided for the purpose of granting relief to an assessee, and where such issue is involved in a large number of years or where the question involved goes to the root of the jurisdiction of the authority, this Court in its writ jurisdiction may entertain the application. This remedy is more speedy and efficacious. 30. On merits also, this application must succeed. The direction of the Collector (Appeals) to restrict the refund upto a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e making of the order of assessment itself. The right of the assessee to claim refund would only arise after determination of the correct classification as directed by mis Court. Any application for refund of excise duty in a case where the assessments have been quashed, if preferred, prior to fresh assessments, would be wholly premature. No right to claim a refund can accrue unless fresh orders of assessments in accordance with the directions of this Court in the said C.R. No. 814 (W) of 1978 were made. 34. The provisions of Rule 173-I is relevant in this behalf. The assessments which the officer was required to make in terms of the orders of this Court in the said C.R.No. 814 (W) of 1978 was to be made under Rule 173-I. The said Rule is in the following terms 173-I. Assessment by proper officer.- (1) The proper officer shall on the basis of the information contained in the return filed by the assessee under Sub-rule (3) of Rule 173 G and after such further inquiry as he may consider necessary, assess the duty due on the goods removed and complete the assessment memorandum on the return, a copy of the return so completed shall be sent to the assessee. (2). The duty det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to an assessee on the completion of an order of assessment cannot be withheld on the ground of unjust enrichment. If such a plea were to prevail then it would make the assessments meaningless and futile. The liability to pay the duty of excise is of the manufacturer. Any liability for any duty that might have been short-paid earlier would be recoverable only from the manufacture and such recovery by the Department is not going to be quashed on the ground that the assessee had short-realised the. duty form the customers. On the same analogy the assessee cannot be denied the right to get refund on the assumption that the duty of excise has been recovered from the buyer. It is further submitted that it is not correct to state that any duty of excise is recovered by the manufacturer from his buyer. The buyer does not pay anything by way of excise duty which is payable only by the manufacturer. What the buyer pays is the consideration for the purchase of the goods and the composition of such consideration is wholly irrelevant for the purpose of determining the issue as to who pays the duty of excise. In this connection the following passage from the decision of the Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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