RK JAIN ..... Respondent Through: Mr. Faiyaz Hasan, Advocate. HON'BLE MR. JUSTICE NAJMI WAZIRI NAJMI WAZIRI, J (Oral) It is the appellant's case that the impugned order dated 23.01.2016 and the arbitral Award have erred insofar as the respondent had been awarded an amount beyond the terms of the Contract. As per Clause 7.3 of the contract, the respondentsupplier of Elastic Rail Clip (ERC) was to be given a difference in the MODVAT of steel, if it was more than the quantum of steel input in the MODVAT amount of Rs.2.74 which figure was allowed to be retained by the respondent on the ERC at the time of awarding the Tender. The latter amount had been quoted by the respondent. The Clause 7.3 reads as under: " The MODVAT benefits as available on the Inputs as on date of opening of tender, which has been indicated as Rs. 2.74 for each ERC MkIII, will be retained by supplier. Any variations in the benefits under MODVAT on steel rods used FAO No. 183 of 2016 Page 1 of 7 as raw material that accrues after the date of opening of tender shall be to purchaser's account. " According to the appellant, what the aforesaid Clause envisages is that the respondentsupplier would be allowed a MODVAT benefit of Rs.2.74 for each ERC, however, MODVAT on steel rods increased, then corresponding amount would be adjustable/payable to the supplier. It is argued that the Award has erred in granting MODVAT amount on the ERCthe finished product, instead of only on the steel rod input. The Award has dealt with the issue as under: "29. There is specific provision in the contract for MODVAT benefits i.e Para 7.3 of the contract which is reproduced as under: "The MODVAT benefits as available on the inputs on dale of opening of the tender, which has been indicted as Rs.2.74 for each ERC MKIII, will be retained by the supplier. Any variations in the benefits under MODVAT on steel rods used as raw material that accrues after date of opening of tender shall be to purchaser's account." The perusal of the aforesaid para makes it clear that a sum of Rs.2.74 for each ERC MKIII has been fixed as MODVAT benefits which is to be retained by the supplier i.e. firm/concern of the Claimant. Any downward and upward variation in MODVAT benefits will not affect the fixed amount and any variation will be Respondent's account after date of opening of tender. It is also not in dispute between the parties that as per clause 3 of the Indian Railway Standard Specification for Elastic Rail Clips Serial No. T311992 the raw material will be "Spring steel rounds" only. Admittedly, the Claimant has already availed the MODVAT benefit @ Rs. 2.184 per piece of ERC MKIII in purchase of raw material from 'Rashtriya Ispath Nigam Ltd. It is also not in dispute that the Claimant has also been FAO No. 183 of 2016 Page 2 of 7 paid the MODVAT benefit @ Rs. 0.34 per piece of ERC MKIII by the Respondent against Bill Nos. 16 Ex. CWXVII and 17 Ex. CWXVIII. In this way, the Claimant has received MODVAT benefits to the extent of Rs.2.52 per piece of ERC MKIII out of Rs. 2.74. The Claimant has thus, not received balance payments of Rs.0.22 per piece of ERC MKIII. This downward variation of Rs.0.22 per piece of ERC MKIII is to be made good by the Respondent to the Claimant There is no dispute that the Claimant has supplied 6,66,000 ERC MKIII to the Respondent Therefore, the Claimant is entitled to recover a sum of Rs.l,46,520/( 6,66000 x Rs.0.221,46,520/) besides Excise Duty @ 16% amounting to Rs.23,443.02 and Central Sales Tax @ 4% amounting to Rs.6,798.53 in all Rs. 1,76,761.73 against Bill Nos. 16A Ex. CWXVllA and 17A Ex. CWXVIIIA. In view of my above findings in favour of Claimant, the Respondent is not entitled to Rs.