CASE NO.: Appeal (civil) 271 of 1989 PETITIONER: COLLECTOR OF CENTRAL EXCISE, GUNTUR RESPONDENT: ARUNA STRAW BOARDS (P) LTD. DATE OF JUDGMENT: 27/08/1999 BENCH: K. VENKATASWAMI & M. JAGANNADHA RAO JUDGMENT:

JUDGMENT 1999 Supp(1) SCR 529 The Judgment of the Court was delivered by <NAME>, J. This appeal by the <ORG> is preferred against an order dated 19.4.88 of <ORG>, New Delhi, (hereinafter referred to as `the Tribunal').

The question that arises for consideration is whether the duty of excise is leviable under the provisions of the Central Excise Act on the quantities of single ply straw board manufactured and cleared without payment of duty for manufacture of multiple ply straw board/straw board of higher D.G. in the same factory of production.

Briefly stated, the facts are the following:-

The respondents are the manufacturers of paper boards falling under T.I. 17 of the Central Excise Tariff. They manufactured single ply straw boards and a major portion of the single ply boards was cleared on payment of duty at the factory gate. A portion of the single ply boards was used in the manufacture of multiple ply straw boards within the factory of production and the multiple ply straw boards are removed from the factory after payment of duty. A show-cause notice was issued by the <ORG> calling upon the respondent why the duty should not be levied on single ply straw boards used for the manufacture of multiple ply boards within the factory. The period for which the payment was demanded was from 20.2.83 to 22.7.83. The respondent replied to the show-cause notice denying the liability and the Assistant Collector, after perusing the reply, found that there was no essential difference in identity between the original commodity, namely, single ply straw board, and the processed article, namely, multiple ply straw boards, and the mere joining of two or three single ply straw boards by means of an adhesive would not necessarily lead to a conclusion that a commercially different and distinct commodity came into existence. The Assistant Collector also gave other reasons to come to the conclusion that the single ply straw board cleared for manufacture of multiple ply straw board in the same factory cannot be subjected to the duty of excise. Accordingly, by this order dated 6.2.84 he dropped all further proceedings initiated against the respondent pursuant to the show-cause notice issued for the period mentioned above.

The <ORG>, aggrieved by the order of the Assistant Collector, preferred an appeal to the Collector of <ORG> (Appeals), Madras. <ORG> by its order dated 11.6.84 gave a finding as follows:-

`During the relevant time the tariff description under Entry No. 17 of Central Excise Tariff was as under:

`Paper and paper board, all sorts (including paste board, mill board, straw board, a carboard and corrugated board) and...' From the above description, it is clear that all sorts of paper boards including straw boards would fall under T.I. 17 and specifically would fall under sub-item (1) (unless such straw board is elsewhere specified, which is not the case). Therefore the tariff description does not distinguish between single ply and multiple ply straw boards and does not prescribe any standard of thickness, before a board could be called a straw board. Therefore, straw board whether it is single ply or double ply or triple ply or multiple ply would continue to be described as straw board and would fall under the same sub-item (10) of T.I. 17 during the relevant period. Hence, charging single ply straw board to duty and again charging multiple ply straw board manufactured out of such single ply straw board sheets within the same factory to duty would clearly amount to double levy.

On this short ground, application merits rejection.' <ORG> also gave additional reasons in support of the above conclusion. Ultimately, the appeal was dismissed.

Still aggrieved, the <ORG> preferred a further appeal to the <ORG>. The <ORG> by its order dated 19.4.88 dismissed the appeal.

A three-member Bench of the Tribunal, consisting of Vice President and two Technical Members, considered the matter. One Technical Member (Shri <NAME>), who has written a detailed order, found as follows:-

`We observe that both the single ply and multiple ply straw boards answer to the description straw boards and multiple straw boards cannot be considered as paste boards even in terms of the definition given in the <ORG> cited by the <ORG>'.

Thereafter, a discussion on the decision of a five-member Bench of the <ORG> in the case of <CITATION> ., (1986) 24 ELT 542 and also on the decision of <ORG> in <CITATION> , reported in (1988) 33 ELT 292, was made. The conclusion reached by him was to the effect that in view of the decision of <ORG> (supra), the five-member Bench decision of the <ORG> (supra) cannot be followed. Apart from this reference to Rule 49(4) read with Rule 9 of the Central Excise Rules was also made and discussed. Ultimately, the appeal was dismissed. The Vice President (J) (<NAME>), in his separate order, has observed as follows:-

`From Brother <NAME>'s order I observe that single ply and multiple ply boards are both straw boards. In view of this I would not for the present like to say that effect of the <ORG> decision in <CITATION> , (1988) 33 ELT 292 (Bombay) is to unsettle the <ORG> decision in <ORG>, case (1986) 24 ELT 542. The product in two stages not being distinct in name, character or use there could be no question of demanding duty at both the stages. In this view of the matter the applicability of Rule 49(4) and Rule 9 discussed by Brother <NAME> in para 3 of his order is also in my view of academic importance. With these words I agree with Brother <NAME> that the appeal should be dismissed.' Another Member (Technical) (<NAME>) concurred with the order of the Vice President (J). It is clear from the above that the majority decision of the <ORG> was dehors the <ORG> judgment and also the five-member Bench decision of the <ORG>. It rested on the scope and interpretation of Tariff Item 17.

The learned counsel appearing for the <ORG>, however, argued before us mainly inviting our attention to the fact that the judgment of <ORG> (supra) relied on in the detailed order of the <ORG> has since been overruled by this Court in <CITATION> .  Supp 2 SCC 348. Therefore, according to the learned counsel, the decision of the <ORG> has to be set aside. No argument was addressed before us challenging the conclusion of the Assistant Collector, the Collector (Appeals) and the <ORG> on the scope of Tariff Item 17 as well as the finding that single ply and multiple ply boards are both straw boards as enumerated in the said Item.

The respondent is not represented before us. Therefore, we have ourselives gone through the orders of the Assistant Collector, the Collector (Appeals) and the <ORG>, in particular, the order of the Collector (Appeals) and the order of the Vice President (J) We are in agreement with the view expressed by the Collector (Appeals) on the interpretation of T.I. 17, which has been approved by the Vice President (J), with whom the Member (Technical) has concurred. That being the position, the reversal of the decision of <ORG> (supra) by this <ORG> in <NAME> (supra), is not relevant and the same cannot be pressed into service to upset the decision of the <ORG>.

In the result, the appeal fails and is dismissed accordingly with no order as to costs.


JUDGMENT Mitter, J.

1. This is really an unfortunate case for although the merits of the case are in favour of the appellant we are constrained to arrive at a decision adverse to him on the ground of limitation. It appears that one <NAME> obtained a decree for rent against <NAME> and his cosharers in Rent Suit No. 876 of 1916. One <NAME> had the decree assigned to him and he applied for execution of the decree in the year 1920 by sale of the rent property. In that execution the holding in question was sold and it was purchased by a lady of the name of <NAME> for a price of Rs. 1,255 on 27th July 1920. The sale was confirmed in August. Two of the judgment-debtors, one of whom was an infant, applied on 27th July 1923 under Order 21, Rule 90, Civil P. C, for setting aside the sale. At all subsequent stages this application under Order 21, Rule 90 was prosecuted by <NAME> alone. The application to set aside the sale was allowed in the first instance by an order of the <ORG> dated 12th March 1924. When the sale was set aside by this order the <ORG> gave a direction for refund of the purchase-money with interest to the auction-purchaser. The sale proceeds were in excess of the amount due under the decree and therefore the portion of the surplus sale proceeds remained in deposit for payment to the judgment-debtors, the decree-holder having already taken the sum which was found due to him. In accordance with this order, of refund the auction-purchaser withdrew from the <ORG> a sum of Rs. 442.11-9 which really was to be credited to the judgment-debtors as a part of the surplus proceeds which the judgment-debtors would be entitled to in the event of the sale being confirmed. A direction was given to the decree-holder to refund the amount withdrawn by him.

2. The decree-holder however preferred an appeal to the District Judge against the order setting aside the sale. After several intermediate proceedings to which it is not necessary to refer, the sale was ultimately confirmed by an order of the appellate <ORG> dated 17th August 1925. An appeal was however taken to <ORG> against the order confirming the sale by one of the judgment-debtors and not by the present appellant <NAME>. <NAME> however was made a respondent to the said appeal. That appeal was dismissed on 24th March 1927 and on 22nd March 1930 <NAME> put in an application for an order on the auction-purchaser to re-deposit the amount which had been withdrawn by him from the <ORG> out of the surplus sale proceeds.

3. The <NAME> who dealt with the matter in the first instance was of opinion that the auction-purchaser should be compelled to re-deposit the money which he had withdrawn. On appeal however by the auction-purchaser the District Judge was of opinion that she would not be entitled to retain the surplus sale processes but for the plea of limitation which had been taken by her. The District Judge was of opinion that the right of the judgment-debtor for restitution really accrued on 17th August 1925 when the order setting aside the order setting aside the sale, or in other words the order confirming the sale was made by the District Judge on 17th August 1925 under Article 181 of the Schedule to the Limitation Act . As this application for restitution was not made within three years from the time when the right to apply accrued the application was barred by the said article. He accordingly dismissed the application of the judgment-debtor for restitution on the ground of limitation.

4. Against this decision the present appeal has been preferred and it has been contended on behalf of the appellant that the application could not be treated as one under Section 144 , Civil P. C, namely, as an application for restitution. It was really an application for asking the <ORG> to exercise its inherent powers under the provisions of Section 151 , Civil P. C, and in support of this contention reliance has been placed on the recent decision of this <ORG> in the case of <NAME>, <NAME> v. <NAME> in which my learned brother <NAME>, J., held that in the circumstances similar to the present the <ORG> could act under its inherent powers under Section 151 , Civil P.C. The learned Judges did not decide in that case that even if the application be treated as one under Section 151 , Civil P. C, the article of limitation applicable is not Article 181. Of course there is a decision of the Patna High <ORG> which has been referred to by the learned advocate for the respondent in the case of <NAME> v. <NAME> AIR 1925 Pat 1, 'where it was held that an application in such cases comes both under the provisions of Sections 144 and 151 , Civil P.C. The real question therefore in controversy is as to when the right did accrue in the appellant for asking for the refund of the money withdrawn by the auction-purchaser seeing that the sale has now been confirmed and the money being in excess of the decretal amount really belongs to the judgment-debtor. It has been held in a series of cases that the right to apply accrues really on the date when for the first time a decision is given which entitled the parties asking for restitution to have restitution and that was undoubtedly in this case on 17th August 1925.

5. It is argued however that as an appeal was pending against that decision the appellant before us could not consistently ask for restitution, for that position would have been inconsistent with the conduct of the appeal. We were at the first blush inclined to agree with the view, for it was argued on the basis that the appellant was one of the appellants before the District Judge. That however does not appear to be so for the present appellant was merely a respondent in the said appeal and there was in our opinion nothing to prevent appellant from asking for restitution. It is said on behalf of the appellant that he could not have possibly taken that course as that would have affected any right which he might have acquired if the appeal against the order confirming the sale had been allowed. We do not see much force in that contention. It was not he who had appealed; he was rather content with the order confirming the sale. In such circumstances as this the right to ask for refund of the money withdrawn by the auction-purchaser arose on 17th August 1925 and he ought to have applied within three years from that date. We are of opinion therefore that the learned District Judge was right in the view which he has taken. Stress has been laid on a recent decision of their Lordships of <ORG> in the case of <CITATION> . Mr. <NAME> has drawn our attention to a passage in that judgment which runs as follows:

It is at least an intelligible rule that so long as there is any question sub judice between any of the parties those affected shall not be compelled to pursue the so often thorny path of execution which, if the final result is against them, may lead to no advantage.

6. These words were said with reference to the provisions of Article 182 , Lim. Act, and the question which was for consideration before their Lordships of <ORG> was as to whether the word "appeal" in Section 182(2) , Lim. Act, meant any appeal of any kind and their Lordships were of opinion that there was no warrant for reading into the words any qualification that the appeal must be regular or competent and that the parties to such subsequent execution proceedings must be parties thereto or that the whole decree must be imperilled. On the other hand, there are observations of <ORG> in that very case which would go to show that in construing the provisions of the Limitation Act equitable considerations are out of place and the strict grammatical meaning of the words is the only safe guide. In this view we are of opinion that the right to apply accrued as soon as the order of the District Judge was made in August 1925 confirming the sale and as the present application was not made within three years from that date it has been rightly held that the application was barred by limitation. It might be a misfortune to the appellant but we have to administer the law as we find it. The appeal is dismissed. There will be no order as to costs.

<NAME>, J.

7. I agree.