Usha Mehra ( 1 ) M/s. Phoenix Oil Co. India Pvt. Ltd. entered into a running contract with the Union of India and others for supply of stores, namely, oil machinery. The said agreement contained an arbitration clause. The disputes having arisen between the parties, the petitioner sought the same to be referred to arbitration. As per clause 24 of the agreement when the respondent refused to do so, petitioner filed a petition under Section 20 of the Arbitration Act, pursuance to which orders were issued for the appointment of Arbitrator, Dr. B. N. Mani was appointed as Sole Arbitrator. The Arbitrator made and published his Award on 28th February, 1989. Notice of filing of the award was issued to the parties. The award was filed by the Arbitrator. The petitioner filed objections to the award within time whereas Union of India had not filed any objection. ( 2 ) IT is a well settled principle of law that the award of an Arbitrator cannot be set aside unless there is an error apparent on the face of the award or the Arbitrator has misconducted himself or the proceedings. He however urged that there is error apparent on the face of the award. To prove the same he has drawn my attention to Claim No. 1 which pertains to the Excise Duty, the Arbitrator disallowed the claim of the petitioner on account of excise duty whereas against Claim No. 2 he has allowed the claim on account of 3% additional excise duty. Mr. Gaind appearing for the objector contended that if the basic excise duty is disallowed how could the Arbitrator grant the levy of the additional excise duty. This shows contradiction in itself and the error on the face of the award. ( 3 ) IT was the term of the agreement particularly Item No. 5 which stipulated that the price quoted by the petitioner was inclusive of excise duty and if there was any increase or decrease in excise duty that would be to the buyers account. The Union of India had accepted the offer of the petitioner/ objector subject to this condition. The supplies were effected under the contract till 31st December, 1978. Thereafter, the said excise duty of 5% was levied on the supplies made by the objector. The Union of India had accepted the offer of the petitioner/ objector subject to this condition. The supplies were effected under the contract till 31st December, 1978. Thereafter, the said excise duty of 5% was levied on the supplies made by the objector. The documents filed by Union of India before Arbitrator and admitted by the objector clearly show there was increase in excise duty and the same was claimed by the contractor. The same was furnished to the UOI. The petitioner/objector placed on record the terms and conditions of the agreement as well as the notification issued by the Government increasing the excise duty. It appears that the Arbitrator ignored this essential and material evidence as well as the term of the agreement which form part of the award whereas against Claim No. 2 on the same reasoning and on the same documents he has allowed the claim to the tune of Rs. 33,460 on account of 3% excise duty, but disallowed the basic increase of 5% in excise duty against claim No, 1. Therefore, to this extent, there appears to be error on the face of the award. The basic amount of excise duty at the rate of 5% has been disallowed whereas the additional excise duty of 3% has been allowed on the same fact and on the same evidence and reasoning. This shows non-application of mind by the Arbitrator. Even though the award is a non-speaking award still due to the error apparent on the face of the award as discussed above, I think the award is liable to be set aside. A similar point arose before another Bench of this court in the case of Ceekay Grease and Chemicals Pvt. Ltd. v. Union of India1. In that case also the contractor had used his claim because there was an increase in excise duty. The Arbitrator dismissed that claim of the contractor. The court while dealing with that case came to the conclusion that the dismissal of the claim with regard to increase in the excise duty was erroneous because the Arbitrator had not appreciated the scope of reference and scope of the claim of the contract and further held that it amounted to non-application of mind. The court while dealing with that case came to the conclusion that the dismissal of the claim with regard to increase in the excise duty was erroneous because the Arbitrator had not appreciated the scope of reference and scope of the claim of the contract and further held that it amounted to non-application of mind. Relying on that judgment, I am of the view that in this case the Arbitrator has committed an error which is apparent on the face of the award as already discussed above. I set aside the award against claim No. 1 as well as the award of disallowance of sales tax and remit the same to the Arbitrator for reconsideration particularly with regard to claims No. 1, 3 and 13 in the light of the above discussion. The Arbitrator shall decide the matter afresh after hearing the parties. The petition is partly allowed. Parties are left to bear their own costs. The award alongwith the proceeding may be returned to the Arbitrator immediately by the registry.