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PETITIONER: ORIENT PAPER MILLS LTD.

       Vs.

RESPONDENT: UNION OF INDIA

DATE OF JUDGMENT: 25/02/1966

BENCH: GAJENDRAGADKAR, P.B. (CJ) BENCH: GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. HIDAYATULLAH, M. SHAH, J.C. SIKRI, S.M.

CITATION:  1966 AIR 1754            1966 SCR  (3) 657

ACT: Supreme  Court Rules, 1950, Schedule III, Part 11, Entry  2- Claim  for  refund  of a definite  amount  of  excise  duty- Disallowed  by  Excise authorities-Appeal to  Supreme  Court under Art. 136-Court fee payable.

HEADNOTE: The appellant claimed refund of a specific amount as  excess amount  of  excise duty recovered from it  by  assessing  it under a wrong item, but the excise authorities rejected  the claim  and  the  appellant’s  revision  application  to  the respondent was also dismissed.  In its application for leave to  appeal  to  this Court under  Art.  136,  the  appellant challenged  the  order of the respondent on  the  assumption that  the  order  under  appeal  had  been  passed  by   the respondent  acting as a Tribunal, and reiterated  its  claim for the specified amount.  The appellant contended that only fixed  court fee of Rs. 250 was payable because it  was  not possible to estimate at a money value the subject matter  in dispute  and  not  fee on an ad valorem basis  at  the  rate prescribed  in  Entry  2 in Schedule 111,  Part  11  of  the Supreme Court Rules. HELD  : The claim made by the appellant was for a  definite, ascertained  amount and therefore it is not a case where  it is  not  possible to estimate at a money value  the  subject matter  in dispute.  Nor can it be said that if  the  appeal before this Court succeeds, it would still be necessary  for the  appellant  to  take any further steps  to  recover  the amount  of  refund,  because,  this  Court  can  direct  the appropriate authorities to grant the refund.  Therefore, the appellant  should pay court fee as prescribed by Entry 2  in Part 11 of Schedule III of the Supreme Court Rules, on an ad valorem basis. [661 G-H; 662 E, F] Order in Civil Appeal No. 212 of 1956, explained.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 659-664  of

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1965. Appeals  by special leave from the judgment and order  dated October  5,  1963 of the Government of  India,  Ministry  of Finance, Department of Revenue, New Delhi in Central  Excise Revision Applications Nos. 720-725 of 1963. A.   K. Sen, B. P. Maheshwari and M. S. Narasimhan, for  the Appellant. N. S. Bindra and B. R. G. K. Achar, for the respondent. The Judgment of the Court was delivered by Gajendragadkar,  C.  J. What is the  appropriate  amount  of court-fees  payable on the petition of appeal filed  by  the appellant, Orient Paper Mills Ltd., under Schedule III, Part II  of  the  Supreme Court Rules, 1950, that  is  the  short question  of  law  which arises for  our  decision  in  this matter. The  appellant carries on the business of manufacturing  and selling  paper  and paper board, and is registered  as  such under the 657 658 Central  Excise  and  Salt  Act,  1944  (No.   I  of   1944) (hereinafter  called ’the Act’).  The respondent, the  Union of  India,  charges excise duty under Rule 9  of  the  Rules framed  under  the  Act on the  paper  manufactured  by  the appellant  before the manufactured goods are cleared out  of the  appellant’s ware-house.  Among various kinds  of  paper which  the  appellant manufactures and sells,  are  included ’Packing  and  Wrapping’ and ’Printing and  Writing  Paper’. The  aforesaid  ’Printing and Writing Paper’ is  of  various varieties  and it includes Machine Glazed  Poster  popularly known as M.G. Posters. Prior  to the Finance Act of 1961, the printing and  writing paper  was  classified and charged under item 17(3)  of  the Schedule to the Act and the wrapping paper was charged under item  17(4) of the Schedule; even so, the duty on  both  the items was the same, viz., 0 . 22 P. per kilogram.  The  duty under  item 17(4) was, however, enhanced by the Finance  Act of  1961 -and increased to 0 - 35 P. per kilogram  from  the 1st  March, 1961.  About six months after the enhanced  duty came  into  force, the Excise authorities decided  that  the M.G. Poster manufactured by the appellant should be  charged under item 17(4) and demand notices were issued  accordingly for  the  different months during which the said  paper  was manufactured.  In consequence of this demand, a total sum of Rs.  2,79,175-27  P.  was collected from  the  appellant  as difference  in the duty leviable for the assessment  periods covered  by  the several appeals which are pending  in  this Court  and  with  which  we are  concerned  in  the  present proceedings. As  a result of these demands, the appellant had to pay  the duty  which it did under protest.  Thereafter, it claimed  a refund  under  Rule II of the Rules framed  under  the  Act. This Rule prescribes a period of three months within which a claim  for  refund can be made "in consequence  of  the  sum having   been   paid   through   inadvertance,   error    or misconstruction".  The appellant urged that the duty on  the goods  in question was chargeable under item 17(3)  and  not under  item 17(4) of the Tariff Rules.  One of  the  reliefs claimed by the appellant in its petitions of appeal was that the  Excise  authorities be directed to  assess  the  poster paper under item 17(3) and not under item 17(4) and to  make a direction as to the refund of the excess amount  recovered from  the appellant.  The excess amount of which refund  was thus  claimed came to Rs. 84,928-84 P. This application  was rejected  by  the  Assistant Collector  of  Central  Excise, Cuttack Division, Cuttack.

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Against the said decision, the appellant preferred an appeal to  the Collector of Central Excise under s. 35 of the  Act. In  its  appeal  memo to the Collector,  the  appellant  had claimed  that the order under appeal should be  revoked  and Rs. 84,928-84 P. should be refunded to it.  A further  claim was made by the appellant that the excise authorities should be directed to assess the poster paper 659 under item 17(3) and not under item 17(4).  The said  appeal was rejected by the Collector of Customs on 28-7-1962. The  appellant then moved the respondent by way of  revision under  S. 36 of the Act.  In its revision  application,  the appellant  made prayers similar to those which it  had  made before  the Appellate Authority.  This revision  application was  also  dismissed.  It is against this  revisional  order that  the appellant has come to this Court by special  leave under Art. 136 of the Constitution.  It appears that in  the various  paragraphs  of  its  application  for  leave,   the appellant  has  reiterated  its claim for  refund  of  money recovered  from it in excess of the amount legitimately  due from  it  and  has  challenged  the  order  of  the   Excise authorities  rejecting its claim in that behalf.   On  these facts,  the question which arises is: can the  appellant  be permitted to pay a court-fee of Rs. 250 on its petitions for appeal,  or is it necessary that it ought to pay  court-fees at  the  rate  prescribed by sub-clause (2) of  entry  2  in Schedule III, Part II of the Supreme Court Rules? This  question was referred by the Deputy Registrar of  this Court  to the Hon’ble Judge in Chambers.  The learned  Judge referred to the respective contentions raised before him  by the  parties  and considered the practice in regard  to  the levy of court-fees in allied matters.  He took the view that the  practice  with regard to levy of court-fees  was  in  a state  of flux and it required full consideration.  That  is why  he directed that the matter be adjourned to Court.   It is  as a result of this direction made by the Hon’ble  Judge in Chambers that this matter has come before us for disposal on the question of court-fees. Let  us  cite the relevant provisions of the  Supreme  Court Rules in relation to court-fees in this matter.  Enrty 2  in Part 11 of Schedule III reads thus:- "Lodging and registering Petition of Appeal: Where the amount or value of the subject-matter in dispute is Rs. 20,000 or below that sum          ..Rs. 250-00 For every Rs. 1,000 in excess of Rs. 5 . 00 for every      Rs. 20,000                     thousand rupees or                                      part thereof. In cases where it is not possible to estimate at a money value the subject-matter in dispute           Rs. 250 . 00" There is a proviso to this entry which reads thus: "Provided: (1)  that  the  maximum fee payable in any  case  shall  not exceed Rs. 2,000 and 660 (2)  that  where  an  appeal is  brought  by  special  leave granted by this Court credit shall be given to the appellant for the amount of court-fee paid by him on the petition  for special leave to appeal". Mr.  Sen for the appellant contends that it is not  possible to  estimate at a money value the subject-matter in  dispute in  the present appeals; and so, court-fee of Rs. 250  would be adequate and appropriate for each one of them.  According to him, the controversy between the parties has relation  to

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the  proper classification of the goods and this  being  the subject-matter of the appeals, it is incapable of valuation. Mr.  Sen presented his argument in an alternative form.   He urged that even if the appeals are allowed, this Court  will merely determine the proper classification of the goods  and make  a  declaration that on the basis of  the  said  proper classification,  the  appellant should be  entitled  to  the refund.   Even  after  such  a  declaration  is  made,   the appellant would be required to adopt some other procedure to make a claim for actual recovery of the said refund.  It  is on  these two grounds that Mr. Sen rests his case  that  Rs. 250  would  be the appropriate and adequate  court-fees  for each one of these appeals. In support of this contention, Mr. Sen has also referred  to the practice prevailing in this Court in respect of  certain categories  of appeals where court-fee of Rs. 250  has  been consistently accepted as adequate and appropriate.  In Civil Appeal No. 212 of 1956 (The State of Madras v. Messrs.  Tata Iron and Steel Co. Ltd.) an appeal was filed by the State of Madras  on a certificate granted by the High Court  from  an order passed by it under S. 12-B of the Madras General Sales Tax  Act, 1939 allowing the assessee’s claim for  refund  of the  amount  of  sales tax computed on the  turn-over  of  a stated  sum  of money.  Overruling the stand  taken  by  the office  that  court-fees  should be paid on  an  ad  valorem basis,  Bhagwati,  J.  who was then  the  Hon’ble  Judge  in Chambers  directed that "it is not possible to estimate  the value of the claim in this case and the record does not show it.  Therefore, the court-fee should be paid on that basis". Accordingly Rs. 250/- was accepted as proper court-fee. Similarly, in Civil Appeal No. 54 of 1958 (Indian Hume Pipes v. Its Workmen) though the appeal related to a definite  and ascertainable  sum of money in respect of payment of  bonus, dearness  allowance, etc.  Bhagwati, J. directed that "I  am inclined  to think that Rs. 250/- fixed court-fee should  be charged.  ,  The  award  merely  determines  the  liability; recovery of the dues requires other procedure to be  adopted for the purpose; vide section 33(c)". In accordance with the directions thus given by the  Hon’ble Judge in Chambers in these two matters, the practice in this Court 661 consistently  has been that in matters coming to this  Court in  reference proceedings under the relevant  provisions  of the  Sales Tax Acts and the Indian Income-tax Act,  1922  as well  as against awards made under the  Industrial  Disputes Act, 1947, Rs. 250 has been accepted as proper court-fee. In Civil Appeal No. 148 of 1954 (Mls.  Bhatnagar & Co. Ltdv. Union of India), similar court-fee of Rs. 250/- was accepted where  the appellant challenged the order of the High  Court passed under Art. 226 refusing the appellant’s prayer for  a direction  for  amendment of the period of the  validity  of import  licences.   This plea was accepted even  though  the appellant  had estimated his loss at Rs. 6,00,000/-  if  the relief claimed in that behalf by him was not granted.  It is on  these precedents and the practice which they  show  that Mr.  Sen  has  relied in support of his  argument  that  the category of’ cases in which the present appeals fall  should be  similarly  treated  and Rs. 250/-  should  be  taken  as adequate and proper court-fee.  Reverting  then to the first contention raised by Mr.  Sen, can it be said that the present appeals fall in the class of cases where it is not possible to estimate at a money  value the  subject-matter in dispute.  In our opinion, the  answer to  this question must clearly be in the negative.  We  have

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already  set  out the nature of the relief claimed  by’  the appellant in its application before the Assistant  Collector of  Central  Excise, as well as in  subsequent  appeals  and revision  application.  The claim clearly and  unambiguously is  for  a refund of Rs. 84,928 . 84 P. It is  true  that  a claim for this refund is sought to be justified on the basis that  the assessment should be levied under item  17(3)  and not  under item 17(4); but the decision of the point  as  to which  item  applies  to the paper in  question,  serves  to support the appellant’s claim for a refund; and so, the fact that  the issue as to which item applies cannot be  said  to determine  the character of the present  proceedings  before the  Appellate Authority or that of the appeals before  this Court.  The proceedings, in terms, are to recover the stated amount of refund and since the said claim has been  rejected by  the Excise authorities, in the present appeals the  same claim   is  made  by  the  appellant  before   this   Court. Therefore,  we  think it is impossible to  hold  that  these appeals are cases where it is not possible to estimate at  a money value the subject-matter in dispute. Besides,  Mr.  Sen is not right in contending  that  if  the appeals.  filed by the appellant before this Court  succeed, it would be necessary for the appellant to take some further steps  to  recover the amount of refund claimed by  it.   In case this Court holds that the basis on which the assessment has  been made in respect of the paper manufactured  by  the appellant is erroneous in law, the necessary consequence  of the  said  decision  would be to issue a  direction  that  a refund of the appropriate amount should be allowed.  These 662 appeals  have been brought to this Court under Art.  136  of the  Constitution  on the assumption that the  orders  under appeal  have been passed by the respondent which acted as  a Tribunal  in entertaining the revision  applications  within the meaning of the said Article; and so, it would be open to this  Court  to  direct, if the appeals  succeed,  that  the appropriate  authorities should grant the appellant’s  claim for refund. Then as to the precedents on which Mr. Sen relies, the posi- tion with regard to appeals brought to this Court in  Sales- tax or Income-tax matters, such as the case in the State  of Madras  v.  Messrs.   Tata Iron and Steel  Co.  Ltd.(1),  is entirely  different.   In such proceedings, the  High  Court which  entertains the reference ,acts purely in an  advisory capacity  and  when  the appeal is  brought  to  this  Court against  the decision of the High Court on  such  reference, the  capacity of this Court is exactly the same as  that  of the High Court.  The proceedings continue to be  proceedings in  which either the High Court or this Court  expresses  an advisory  opinion,  and  so, it can well be  said  that  the subject-matter in such cases cannot be estimated at a  money value.  Whether or not similar considerations will apply  to the  appeals brought to this Court by special leave  against awards  made  under the Industrial Disputes Act  or  against orders passed by the High Court in writ jurisdiction, it  is unnecessary for us to decide in the present proceedings. So  far  as the present appeals are concerned,  we  feel  no difficulty  in holding that the claim made by the  appellant is  for  a  definite,  ascertained  amount  and  it  is  the rejection of the said claim by the respondent in exercise of its revisional jurisdiction when it rejected the appellant’s revision  applications, that has given rise to  the  present appeals.   This is a claim which in terms has  already  been estimated at a money value, and therefore, there is no basis for the appellant’s plea that court-fee of Rs. 250/-  should

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be held to be adequate and proper in each of these  appeals. We accordingly ,direct that the appellant should pay  proper court-fees as prescribed by Entry 2 in Part II of the  Third Schedule of the Supreme Court Rules, subject, of course,  to the  maximum  prescribed  by  clause  (i)  -of  the  proviso thereto. (1) C.A. No. 212 of 1956. 663