9911796707
TMI Blog2023 (5) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the filing of this appeal, to put in a nutshell, are that the writ petitioners are registered small scale industrial units established in Jammu and are engaged in the manufacturing of AAC/SCSR conductors. These articles are manufactured by the writ petitioners-SSI Units from the raw material imported from outside the State. Under the Central Excise Act, as it was then in force, excise duty was leviable on raw material so imported as also on the finished goods after their manufacturing. It is pleaded that at the relevant point of time, Government of India as also State Government had introduced various schemes envisaging various incentives and benefits for the SSI Unit set up in the State of J&K. These benefits included the exemption from payment of sales tax, toll, price preference and refund of CST on raw material etc etc. Apart from the aforementioned benefits, the industrial policy of the Government of India also provided the central subsidy and credit of excise duty on raw material under the 'MODVAT' scheme. The MODVAT scheme was introduced by the Government of India in the year 1986 while rolling out annual budget of the Parliament. The scheme envisaged the benefit of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause. On the request of the writ petitioners, meetings of the Purchase Committee were held from time to time in which the representatives of the writ petitioners also participated. It was the case set up by the writ petitioners that though, Purchase Committee assured them to restore the benefit of MODVAT to the writ petitioners yet issue was not formally settled and on the contrary the SICOP continued to deduct benefit under MODVAT from the bills of the writ petitioners. It was, thus, pleaded by the writ petitioners that the benefit of exemption/refund of excise duty under MODVAT scheme was granted by the Central Government under the Central Excise Act and the Rules framed thereunder and, therefore, SICOP could not have put a condition in the supply order which had the effect of depriving the writ petitioners of the benefits available to them under a statute. Further case was set up by the writ petitioners that the appellant herein as also the SICOP had placed similar orders for procurement of goods from various SSI units established in the State as well as outside the State but in the purchase orders issued to them, there was no such clause providing for transfer of benefit of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the writ petitioners the benefit of MODVAT scheme. The Division Bench was also of the opinion that for impeaching a contractual obligation, the writ petition was not an appropriate remedy, more particularly when the writ petitioners had acted upon the purchase orders through out. 7) Feeling aggrieved, the writ petitioners approached the Hon'ble Supreme Court of India by way of SLP (Civil) No. 14417/88, which was disposed of by the Apex Court vide order dated 08.02.1989. Hon'ble the Supreme Court did not specifically set aside the judgment of the Writ Court (Division Bench of this Court) but remanded the matter back to the High Court to determine the issue whether the benefit of MODVAT scheme had been allowed to pass on to other industries similarly situated but not to the writ petitioners. The writ petitioners were allowed to urge this contention before the High Court. The parties were also given opportunity to supplement their pleadings by filing affidavits or otherwise. This is how the matter on remand came before this Court, yet again, for consideration. 8) Exercising the liberty granted by the Hon'ble Supreme Court, the writ petitioners filed supplementary affidavit to fortif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of MODVAT from the supplier to the purchasers. The plea of discrimination set up by the writ petitioners was held established by the Writ Court and on that account the impugned clause in the purchase order issued by appellant No. 2 to the SICOP was directed not to be given effect to. The clause (ii) of the purchaser orders issued by the SICOP in favour of the writ petitioners, however, escaped attention of the Writ Court for, the Writ Court did not specifically quash the said clause. The Writ Court also directed that in case the writ petitioners put up their claim for refund they will have to show that they have not passed on the burden of excise duty to the consumers. The writ petitioners are happy with the judgment and have accepted the same. The State, as noted above, has come up in appeal and this is how the matter came up for consideration before us. 10) Having heard learned counsel for the parties and perused the material on record, we noticed few anomalous situations obtaining in the case:- i) The Writ Court has, though directed that Clause 13(v) of the Purchase Order issued by appellant No. 2 to SICOP shall not be given effect to but has, for reasons not discernible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinabove. From the reading of pleadings of both the sides, it clearly transpires that there is no dispute with regard to the fact that the supply orders issued by appellant No. 2 directly to M/S Jaldara Conductors Pvt. Ltd, Jaipur, and M/S Ashok Transmission Wire Pvt. Ltd, Jaipur, dated 23rd August, 1986, did not contain any condition, as is contained in Clause 13(v) of the supply order dated 12th January, 1987 and Class (ii) of purchase orders issued by SICOP in favour of the writ petitioners. These supply orders were directly between appellant No. 2 and the units outside the State. From the reading of these two supply orders, it becomes abundantly clear that these were issued after initiating the process of tenders and receiving offers from the intending suppliers. The rates to be charged for different items of goods like AAC/ACSR and the terms and conditions of the supply were those which were mutually settled between the parties. 13) We are aware that there are some supply orders issued by appellant No. 2 in favour of local SSI units for certain items other than AAC/ACSR conductors and those supply orders are also san the condition of the nature which is contained in the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otations with the condition that these SSI units will reciprocate by providing relief to the Purchasing Department in the shape of transferring the benefit of refund of excise duty under MODVAT scheme. The writ petitioners accepted the supply orders and made the supplies strictly as per the terms and conditions laid down in the supply orders. However, later on, it seems finding that the appellants had directly placed certain orders with outside units without imposing such conduction, the writ petitioners made representation to the respondents. The representation made by the writ petitioners came under active consideration of the respondents, who, after weighing all pros and cons of the matter, concluded that it was not possible to revoke the condition which was included in the supply orders in consultation with the writ petitioners and more particularly when 80% of the supplies had already been made by the writ petitioners. 14) Viewed thus, it is very difficult for us to say that the writ petitioners herein and the local as well outside manufacturers, who were also given supply orders by the appellants for procurement of certain items, form a single class. Each contractual transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit was favoured with a supply order sans the impugned condition. Equals have been treated equally and, therefore, no discrimination with anyone. 17) We find nothing wrong or unholy in the arrangement. The legal position in this regard is well settled. Unless the Court finds a condition in the contract entered into between the two parties unconscionable, it would be loath to interfere in the matter. The impugned condition, as we have elaborately discussed above, is found neither unconscionable nor in violation of any statutory provision. Rather this Court has found this condition a result of negotiations between two contracting parties which ultimately resulted into a concluded contract coming into existence between them. Comparing this contract with other contracts executed at different points of time and even between different parties would not be justified. The plea of discrimination raised by the writ petitioners is thus not supported by any legal or fact situation obtaining in the instant case. The Writ Court has not considered all these aspects and has, without any justification, held Clause 13(v) discriminatory in nature. As we have pointed out above, Clause 13(v) is contai ..... 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