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2016 DIGILAW 815 (ORI)

Tata Sponge Iron Ltd. v. Union of India

2016-09-15

B.R.SARANGI, VINEET SARAN

body2016
JUDGMENT VINEET SARAN, CJ. - Heard Mr. B.K. Mahanti, learned Senior Counsel appearing along with Mr. A. Mohanty, learned Counsel for the petitioner, as well as Mr. B. Dash, learned Central Government Counsel appearing for the opposite parties and perused the record. 2.The brief facts of the case are that petitioner-company, which has its plant in District Keonjhar, undertook expansion work to increase its capacity, for which it decided to get basic engineering drawings from a foreign company M/s. Lurgi Metalogical GMBH. For such purpose, the petitioner had entered into an agreement with M/s. Lurgi on 6.12.1995 and 1.3.1996. For importing designs from M/s. Lurgi, the petitioner was imposed Cess under the Research and Development Cess Act, 1986 and Rules framed thereunder. According to the learned Senior Counsel appearing from the petitioner, it was compelled to make the payment of Cess amounting to Rs.14,91,537.20. The payment of Cess was made as the as designs were urgently required, but thereafter the petitioner made a claim for refund of the said Cess under Rule 8 of 1996 Rules. The said application for refund having been rejected by the Secretary, Technology Development Board, Department of Science and Technology, New Delhi vide order dated 22.08.2000, the present writ petition has been filed. 3.The submissions of the leaned counsel of the petitioner is that Cess can be charged only in case of import where there is a foreign collaboration and in the present case, the petitioner has only imported drawings, without there being foreign collaboration with M/s. Lurgi with regard to the same. It is submitted that though the definition of import and technology has been given in Section 2 (d) and (h) of the Act, 1986, but foreign collaboration has not been defined and the meaning of the said term has to be construed as understood in common parlance. According to the petitioner, since there was no foreign collaboration with regard to import of designs, the Cess could not be levied on the petitioner. It is further submitted that Rule 3 of 1996 provides that import should be approved by the Central Government and the designs, which have been imported by the petitioner, have not been so approved and as such, the levy of Cess is illegal and ought to be refunded. It is further submitted that Rule 3 of 1996 provides that import should be approved by the Central Government and the designs, which have been imported by the petitioner, have not been so approved and as such, the levy of Cess is illegal and ought to be refunded. In support of the submission, learned Senior Counsel has relied on a Division Bench decision of Calcutta High Court in the case of Indian Oxygen & another vs. Union of India & Ors, 1996 CWN 761. 4.It was further contended that the petitioner had filed a detailed application for refund under Rule 8 of the rules, 1996, but without considering the grounds taken by the petitioner for refund or considering the case on merits, the Secretary, Technology Development Board, Department of Science and Technology, New Delhi has rejected the claim of the petitioner without assigning any reason and by merely stating that “there is no case for refund in term of Rule 8 (1) of R&D Cess Rules, 1996”. It is contended that the order impugned is devoid of any reason and is, thus liable to be quashed. 5.Mr. B. Dash, learned Counsel for the opposite party has submitted that the levy of Cess is perfectly justified as there was collaboration between the petitioner and Foreign Company M/s. Lurgi Metallogical GMBH and the imports made by the petitioner were after due approval of the Central Government. He has, thus submitted that the order passed by the Secretary, Technology Development Board is perfectly justified in law and does not call for any interference. 6.Having heard learned Counsel for the parties, we are of the opinion that the order dated 22.8.2000 passed by the Secretary, Technology Development Board cannot be sustained in the eye of law as the same is devoid of reasons and has been passed in a cursory manner. Every authority which is required to decide the claim of a party is expected to give reasons for either allowing or rejecting the claim. An order passed by merely stating that there is no case for refund made out, cannot be justified in law. Every authority which is required to decide the claim of a party is expected to give reasons for either allowing or rejecting the claim. An order passed by merely stating that there is no case for refund made out, cannot be justified in law. 7.As such, without going into the merit of claim of the petition, we quash the order dated 22.8.2000 and remand the matter of refund of Cess claimed by the petitioner back to the Secretary, Technology Development Board for passing fresh reasoned order, in accordance with law, after giving opportunity of hearing to the parties. 8.The writ petition stands allowed to the extent indicated above. Urgent certified copy of this order be granted on proper application. Petition allowed to the extent indicated.