{"id":144130,"date":"2010-03-30T00:00:00","date_gmt":"2010-03-29T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-venad-structurals-vs-kerala-state-electricity-board-on-30-march-2010"},"modified":"2018-07-10T15:06:48","modified_gmt":"2018-07-10T09:36:48","slug":"ms-venad-structurals-vs-kerala-state-electricity-board-on-30-march-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-venad-structurals-vs-kerala-state-electricity-board-on-30-march-2010","title":{"rendered":"M\/S.Venad Structurals vs Kerala State Electricity Board on 30 March, 2010"},"content":{"rendered":"
Kerala High Court<\/div>\n
M\/S.Venad Structurals vs Kerala State Electricity Board on 30 March, 2010<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nWP(C).No. 811 of 2006(V)\n\n\n1. M\/S.VENAD STRUCTURALS,\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. KERALA STATE ELECTRICITY BOARD,\n                       ...       Respondent\n\n2. THE CHIEF ENGINEER, T.C.& M.,\n\n                For Petitioner  :SRI.K.JAJU BABU\n\n                For Respondent  :SRI.JOSE J.MATHEIKEL, SC, KSEB\n\nThe Hon'ble MR. Justice C.K.ABDUL REHIM\n\n Dated :30\/03\/2010\n\n O R D E R\n                  C.K.ABDUL REHIM, J.\n\n                  --------------------------------\n                 W.P.(C).No.811 OF 2006\n                  --------------------------------\n\n         Dated this the 30th day of March, 2010\n\n\n                      J U D G M E N T\n<\/pre>\n
                      ———————-\n<\/p>\n
     1.      This writ petition is filed by a Contractor who<\/p>\n
had entered into an agreement with the 1st respondent Board<\/p>\n
for manufacture and supply of “pre-stressed concrete poles”.<\/p>\n
Challenge in this writ petition is against Ext.P10 letter of the<\/p>\n
2nd respondent whereby the petitioner was required for<\/p>\n
payment of an amount of Rs.12,61,426\/-, towards repayment<\/p>\n
of amounts remitted as Excise Duty, which is allowed by the<\/p>\n
Board to the petitioner.       In Ext.P10, coercive steps of<\/p>\n
recovery was threatened on failure to remit the amount<\/p>\n
demanded. It is admitted case of both sides that by virtue of<\/p>\n
the contract in question the 1st respondent Board had<\/p>\n
undertaken to pay Excise Duty, sales tax and other taxes,<\/p>\n
leviable from the petitioner, apart from cost of the poles<\/p>\n
which will be manufactured and supplied.\n<\/p>\n
     2.    Dispute pertains to payments made by the 1st<\/p>\n
respondent towards Excise Duty during the period between<\/p>\n
July 1988 and March 1990.          The above said amount of<\/p>\n
W.P.(C).811\/06                    -2-\n<\/p>\n
Rs.12,61,426\/- received from the 1st respondent Board on<\/p>\n
different dates was paid by the petitioner as Excise Duty to<\/p>\n
the Central Excise Department.        But as per order of the<\/p>\n
Assistant Collector, Central Excise, Kottayam dt.22.10.1990<\/p>\n
the petitioner was exempted from payment of Excise duty by<\/p>\n
virtue of provisions contained in Notification No:171\/1986.<\/p>\n
      3.     In view of the above circumstances the respondents<\/p>\n
directed the petitioner to file refund application before the<\/p>\n
appropriate authority of the Central Excise Department. In<\/p>\n
compliance with the direction, the petitioner filed refund<\/p>\n
application.     But the same was rejected through Ext.P2<\/p>\n
noticing that the burden of payment of Excise Duty had<\/p>\n
already been passed over by the petitioner to the actual<\/p>\n
customer and hence refund if any made will result in undue<\/p>\n
enrichment. Eventhough the petitioner filed appeal before<\/p>\n
the Collector of Central Excise and Customs, Cochin, it was<\/p>\n
dismissed through Ext.P3, upholding the very same view. The<\/p>\n
petitioner took up the matter in further appeal before the<\/p>\n
Customs, Excise and Gold (Control) Appellate Tribunal,<\/p>\n
Madras.\n<\/p>\n
      4.     During pendency of the above said appeal, at the<\/p>\n
W.P.(C).811\/06                        -3-\n<\/p>\n
insistence of the 1st respondent Board, the petitioner had<\/p>\n
executed Ext.P4 agreement. Clause (1) and (2) of the said<\/p>\n
agreement reads as follows:-\n<\/p>\n
          “(1)  The Board authorises the contractor to take action<\/p>\n
          to  realise  the   excess    Excise duty   payment    of<\/p>\n
          Rs.12,61,426\/- or any other amount from the Asst.<\/p>\n
          Collector, Central Excise, Kottayam or any other<\/p>\n
          representative of General Excise Department in the<\/p>\n
          event of the appeal filed before CEGAT being allowed.<\/p>\n
          (2)   The contractor shall remit the refund amounts<\/p>\n
          within 30 working days of realisation of the said amount<\/p>\n
          from Excise Department to the Executive Engineer<\/p>\n
          Central Mechanical Division, Pallom failing which the<\/p>\n
          Board shall have the right to realise the said amount<\/p>\n
          with interest at 21% from the date of receipt of the<\/p>\n
          amount by attachment from the amounts due to the<\/p>\n
          contractor and by other means.”<\/p><\/blockquote>\n
      5.     But the Appellate Tribunal had dismissed the<\/p>\n
appeal holding that it is only when the duty has not been<\/p>\n
passed on by the appellant, they will become eligible for<\/p>\n
benefit of refund, in terms of the provisions contained in<\/p>\n
Section 11(b) of the Central Excise Act, 1944. Since it is<\/p>\n
found that the burden of duty has already been passed on to<\/p>\n
the customer, who is the 1st respondent herein, the rejection<\/p>\n
of refund is sustainable.\n<\/p>\n
      6.     After dismissal of appeal by the Tribunal, Ext.P6<\/p>\n
W.P.(C).811\/06                   -4-\n<\/p>\n
letter was issued by the respondents directing the petitioner<\/p>\n
to file writ petition before this court, impleading the 1st<\/p>\n
respondent as a respondent.       It was also undertaken that<\/p>\n
expenses for filing such writ petition will be met by the 1st<\/p>\n
respondent Board.     Subsequently, Ext.P7 letter was issued<\/p>\n
directing the petitioner to file writ petition jointly along with<\/p>\n
1st respondent Board and for this purpose to engage the<\/p>\n
Senior Standing Counsel of the 1st respondent for conducting<\/p>\n
the case.     The above suggestion was again changed and<\/p>\n
Ext.P8 was issued stating that on getting advice from the<\/p>\n
Senior Counsel of the Board at the Supreme Court, the proper<\/p>\n
remedy is to file a review before the CEGAT under Section 35<\/p>\n
(2) of the Central Excise Act. However, through Ext.P9 letter<\/p>\n
dt.3.6.1999 the Board ultimately has informed that the<\/p>\n
request made by the petitioner for advancing an amount of<\/p>\n
Rs.1 lakh for payment of Advocate fee for filing the review<\/p>\n
petition, could not be granted. Through the said letter the<\/p>\n
petitioner was requested to hand over necessary records to<\/p>\n
the authority of the Board for filing the review petition.<\/p>\n
According to the petitioner all the records were handed over<\/p>\n
to the authority of the Board in compliance with Ext.P9 letter.<\/p>\n
W.P.(C).811\/06                     -5-\n<\/p>\n<\/p>\n
      7.     Facts revealed are to the effect that subsequent to<\/p>\n
Ext.P9 the respondent Board had filed claim petition before<\/p>\n
the Assistant Commissioner of Central Excise, as a buyer,<\/p>\n
seeking refund of the amounts. The said application was filed<\/p>\n
along with petition seeking condonation of delay. But the<\/p>\n
Assistant Commissioner had rejected the application through<\/p>\n
an order dt.24.12.1998 since the application for refund was<\/p>\n
not filed within six months. The Board has filed appeal before<\/p>\n
the Commissioner of Central Excise against the decision. But<\/p>\n
it was also rejected through order dt.17.12.2001.           It is<\/p>\n
admitted in the counter affidavit that eventhough advice was<\/p>\n
received to approach the CEGAT, further appeal could not be<\/p>\n
filed since there occurred delay in filing such appeal.<\/p>\n
However, it is conceded that the Board has filed a writ<\/p>\n
petition before this court and thereafter filed a Special Leave<\/p>\n
Petition before the Hon’ble Supreme Court challenging the<\/p>\n
decisions through which refund application was rejected. But<\/p>\n
the Board was not successful in getting any favourable orders.<\/p>\n
      8.     In Ext.P10 proceedings which is impugned in this<\/p>\n
writ petition, it is stated that the Board has decided to request<\/p>\n
the petitioner to reimburse the loss sustained on account of<\/p>\n
W.P.(C).811\/06                   -6-\n<\/p>\n
the lapses occurred on the part of the petitioner. It is also<\/p>\n
stated that by virtue of Ext.P4 agreement the petitioner was<\/p>\n
bound to reimburse the entire advance payment made by the<\/p>\n
Board for remitting Excise Duty. According to the petitioner,<\/p>\n
both the reasons stated in Ext.P10 is not true and correct. It<\/p>\n
is an admitted case of both parties that whatever amount paid<\/p>\n
by the 1st respondent had already been remitted to the Central<\/p>\n
Excise Department.         It is evident from the facts and<\/p>\n
circumstances that all earnest efforts were taken both by the<\/p>\n
petitioner and the respondent Board to get refund of the<\/p>\n
amount, but it could not fetch any positive result.<\/p>\n
      9.     The question to be decided is as to whether the<\/p>\n
petitioner is liable to reimburse the amount to the respondent<\/p>\n
Board. According to the Board, the amount is a loss sustained<\/p>\n
to them on account of the lapses occurred on the part of the<\/p>\n
petitioner.   Going by the original contract it is evident that<\/p>\n
the Board has undertaken to make payment of the Excise Duty<\/p>\n
element, over and above value of the ‘PSC poles’ supplied. It<\/p>\n
is in accordance with such agreement that the payment of<\/p>\n
Excise Duty was made in advance by the respondent Board. It<\/p>\n
could not be said that the petitioner has not remitted any such<\/p>\n
W.P.(C).811\/06                  -7-\n<\/p>\n
amounts to the Excise Department, due to availability of any<\/p>\n
exemption order. It is clear and evident that the exemption<\/p>\n
order in question was issued by the Assistant Commissioner<\/p>\n
only after remittance of such amounts.      Further, from the<\/p>\n
facts and circumstances it is evident that the petitioner had<\/p>\n
taken all steps to get refund of the amount as per instructions<\/p>\n
given by the respondents. Therefore it could not be said that<\/p>\n
there occurred any loss to the KSEB on account of any lapses<\/p>\n
on the part of the petitioner.        Further question to be<\/p>\n
considered is as to whether the petitioner is liable for<\/p>\n
payment of the amount by virtue of the provision contained in<\/p>\n
Ext.P4 agreement. From clauses (1) and (2) of Ext.P4, which<\/p>\n
is extracted above, the undertaking is only to the effect of<\/p>\n
making payment of the amount if the petitioner gets refund<\/p>\n
from the Excise Department. The respondent Board has no<\/p>\n
case that inspite of getting refund the petitioner had failed to<\/p>\n
make payment of the amount in question. Therefore I find no<\/p>\n
reason as to hold that the claim raised in Ext.P10 is<\/p>\n
sustainable.\n<\/p>\n
      10. However, since the respondent is maintaining a<\/p>\n
case that by virtue of contractual obligations the petitioner is<\/p>\n
W.P.(C).811\/06                 -8-\n<\/p>\n
liable for payment of the amount under demand, I am of the<\/p>\n
opinion that rights if any available to the respondents for<\/p>\n
approaching the appropriate civil court shall not be<\/p>\n
foreclosed. But the recovery steps without there being any<\/p>\n
determination of any such liability on the basis of a proper<\/p>\n
adjudication could not be enforced against the petitioner.<\/p>\n
      11. Accordingly the writ petition is allowed and<\/p>\n
Ext.P10 is hereby quashed. It is made clear that none of the<\/p>\n
observations made herein will stand in the way of the<\/p>\n
respondents seeking any remedy through appropriate civil<\/p>\n
forum, if available under law.\n<\/p>\n<\/p>\n
                           C.K.ABDUL REHIM, JUDGE.\n<\/p>\n
okb<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court M\/S.Venad Structurals vs Kerala State Electricity Board on 30 March, 2010 IN THE HIGH COURT OF KERALA AT ERNAKULAM WP(C).No. 811 of 2006(V) 1. M\/S.VENAD STRUCTURALS, … Petitioner Vs 1. KERALA STATE ELECTRICITY BOARD, … Respondent 2. THE CHIEF ENGINEER, T.C.& M., For Petitioner :SRI.K.JAJU BABU For Respondent :SRI.JOSE J.MATHEIKEL, SC, KSEB […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-144130","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nM\/S.Venad Structurals vs Kerala State Electricity Board on 30 March, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-venad-structurals-vs-kerala-state-electricity-board-on-30-march-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S.Venad Structurals vs Kerala State Electricity Board on 30 March, 2010 - 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