S.S. Sharma, J.
1. This order shall also govern the disposal of Misc. Petition Nos. 735 of 1973, 736 of 1973, 737 of 1973, 738 of 1973, 739 of 1973, 740 of 1973 and 213 of 1974, in each parties are the same as above.
2. The petitioner Company manufactures iron, steel and other steel products having its factory at Bhilai (M.P.). For a proper appreciation of the question that arises for consideration in these petitions it would be appropriate to fifst consider the process of manufacture of some of the varieties produced by the petitioner Company. To explain this the respondents have filed a diagram which was not disputed on behalf of the petitioner.
3. Iron ore which is brought into factory, together with other inputs, is put in the blast furnace which produces Mollen Iron. Out of this Molten Iron, some is sent to pig casting machine for manufacturing pig iron and at that stage no duty is paid on it. Some of the Molten Iron is sent to the foundry for manufacturing 'Ingot Moulds' and 'Bottom Stools'. In this process of manufactureof ingot moulds and Bottom Stools unserviceable scrap is also left behind. This part of the Molten Iron which comes to the foundry out of which ingot moulds and Bottom Stools are manufactured is admittedly a duty paid item in accordance with Item 25 of the Tariff. Obviously, the unserviceable scrap left behind is also a duty-paid item.
4. The other uses of the Molten Iron is that it is sent to the steel melting shop over which at that stage no duty is payable. This Molten Iron which is received in steel melting shop is then put into open blast furnace for manufacture of steel in Molten form. This Molten steel is put into ingot moulds for the manufacture of steel ingots. Apart from the non-duty paid Molten Iron, the ingot moulds and Bottom Stools manufactured in the foundry out of the duty paid Molten Iron are also sent into pieces to the Steel melting shop and are heated in the open hearth furnace along with the other non-duty paid input for manufacture of steel ingots. It is at-the stage of the manufacture of the steel ingots that Excise Duty is payable according to Item 26 of the Tariff.
5. The contention of the petitioner is that the Excise Duty having already been pre-paid on the ingot moulds and the bottom steels and other castings which come from the foundry and on which duty is already paid under Item 25 of the Tariff, no further Excise Duty is payable when as a result of the process in the open hearth furnace steel ingots are manufactured. This is an admitted position that besides that ingot moulds and Bottom Stools on which duty is already paid non-duty paid material is also utilised for manufacturing steel ingots as and when so required. According to the petitioner, recovery of the Excise Duty on the steel ingots so manufactured without giving an allowance for the duty paid ingot moulds and Bottom Stools amounts to double imposition of the same duty for which there is no sanction in law. The petitioner has, therefore, challenged the imposition of duty on the steel ingot which according to him is already paid at the time of the clearance from the blast furnace i.e. the foundry.
6 and 7. * * * *
8. The respondents have not disputed the principle that there could not be a double imposition of Excise Duty on the same material. According to them, this factory is working under the self-determination of duty procedure under Chapter VII-A, rules 173-B and 173-C of the Central Excise Rules, 1944 and so it was for the petitioner to avail of the exemptions. It was further urged that it was open to the petitioner to claim the set-off of duty at the time of the assessment of duty of steel ingots. Their contention is that since the petitioner did not follow the correct procedure for seeking the requisite set-off or exemption as is contemplated by the relevant notifications hence it cannot be said that there is double imposition of Excise Duty.
9. The relevant notification No. 67/68, dated 30-3-1968 (Petitioner's Annexure 'B') which arises for consideration in the present petitions is as follows :-
'In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, and in supersession of Notification of the Government of India in the Ministry of Finance (late Department of Revenue) No. 30/60-Central Excise, dated the 1st March, 1960, the Central Government hereby exempts steel ingots (falling under Item No. 26 of First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) in which duty paid iron in any crude form, including Pig Iron, Scrap Iron, Molten Iron Cast in any other shape or size from so much of duty as has been paid on the said iron in any crude form.'
10. This notification, dated 30-3-1968 and the earlier notification, dated 1-3-1960 referred to in the aforesaid notification was considered by a Division Bench of the Patna High Court in an reported decision in Tata Iron Steel Co. Ltd. v. Union of India and Ors., Civil Writ jurisdiction cases Nos. 614 to 626 of 1967 wherein a similar question was involved. Their Lordships in that decision observed that 'It is a well-settled principle that law Court will not interpret any taxing statute in such a manner that its effect will be to cast a burden twice over for payment of tax on the tax payer, unless the language of the statute is so compelling certain that the law Court has no alternative than to accept it.'
11. A similar question arose before the Calcutta High Court in Hindustan Steel Ltd. v. Union of India and Ors., Civil Rule Nos. 1426(W)-1429(W) of 1969. A copy of the judgment of that case has also been filed by the petitioner. The learned Judge agreeing with the view expressed by their Lordships of the Patna High Court in Tata Iron and Steel Co. Ltd. case (Supra) observed that 'if there is a reasonable doubt, a construction, 'which would have the effect of making a person liable to pay tax twice in respect of the same subject matter would not be adopted unless the words are very clear and precise to that effect. In case of reasonable doubt the beneficial construction is to be adopted in favour of the citizens.' We are in respectful agreement with their Lordships of the Patna High Court and the learned Judge of the Calcutta High Court.
12. In the present case before us the contention of the respondents was that since the petitioner did not claim the set-off at the appropriate stage, they are not now entitled to claim any refund. We are not very much impressed by this line of reasoning. The basic question would be that if any amount by way of tax has been collected on a particular material then the respondents are duty bound to give a set-off or a refund of that much of the amount when tax over the same material is again collected at a later stage. If this construction is not given, it is bound to result in double taxation for which there is no authority under the law.
13. The other submission that the respondent had put forth was that the petitioner will not be entitled to set off or a refund unless it satisfies the authorities concerned about the amount of tax paid on the quantity of the material, on which according to the petitioner, tax has. subsequently been also imposed at a later stage. The contention of the learned Counsel for the petitioner in this behalf, was that the taxing authorities are in possession of the whole record, and material whereby it can always find out the amount of tax to which the petitioner is entitled to set off or refund. In our opinion, this contention of the learned Counsel for the petitioner is not correct. Since it is the petitioner which claims a set-off or a refund, it would also be for him to satisfy the authorities concerned on this question. The relevant notification in this behalf also cast a duty on the petitioner to satisfy the taxing authorities on this question and it is then only that the petitioner would be entitled to a set off of the amount which has already been paid by way of tax.
14. For the aforesaid reasons these petitions are allowed and the different impugned orders passed in this behalf by the respondents are quashed. The burden shall be on the petitioner to satisfy the concerned authorities by placing the relevant record before them to prove that on a particular quantity tax had already been collected and that on such material, tax had further been imposed and collected. On such proof the petitioner shall be entitled to a set-off for the amount which it had already paid and if there be any excess amount it shall be entitled to a refund.
15. There shall, however, be no order as to costs. The amount of security deposit be refunded back to the petitioner.