SAMRITI BUILD CHEM ENGINEERS vs ORIENTAL INSURANCE COMPANY LIMITED

THIS is an appeal filed against the order of District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (for short hereinafter to be referred as District Forum) dated 16.9.2004 whereby Complaint Case No. 1120 of 2002 filed by the appellant-M/s. Samriti Build Chem Engineers was dismissed leaving the parties to bear their own costs.

THE short question, which arises for our consideration in this appeal is whether the excise duty of Rs. 27,040 paid by the complainant to the manufacturer, on the basic value of the goods/material, which got destroyed in an accident, is refundable to the appellant/complainant by the respondent. The learned Counsel for the appellant Mr. M.B. Singh, Advocate contended that since the excise duty was paid before the dispatch of the goods, which include the cost of the material/goods, that never reached its destination and was destroyed during transit, the excise duty has to be paid to the insured appellant by the insurer respondent-Oriental Insurance Company Limited (for short hereinafter to be referred as Insurance Company). He further submitted that the respondent-Insurance Company cannot deduct the excise duty from the claim bill lodged and the payment has to be in full of the claim bill and it was incumbent upon the respondent to make payment of the total loss incurred by the appellant.

The learned Counsel for the appellant next contended that the respondent-Insurance Company failed to honour the terms and conditions of the policy of insurance and there is deficieny on their part in rendering due service to the appellant.

THE learned Counsel for the respondent Ms. Shagun Kathuria, Advocate appearing on behalf of Mrs. Veena Ashwani Talwar, Advocate, on the other hand, pleaded that the respondent-Insurance Company got assessed the claim of the appellant/complainant at Rs. 1,68,948, which amount was received by the appellant in full and final settlement of its claim. She further submitted that as per the report of the Surveyor and Loss Assessor, the payment of the excise duty claimed by the appellant is not correct because the insured goods were subject to modvat under the excise duty and the same is to be refunded by the Excise Department on regular basis. Reliance in this regard was placed on the report of Surveyor and Loss Assessor (Annexure R-3) annexed with the written statement of the respondent-Insurance Company filed before the District Forum. She reiterated that the respondent-Insurance Company has rightly rejected the claim of the appellant relating to the excise duty. THE learned Counsel for the respondent-Insurance Company submitted that there is no deficiency, on the part of the respondent, in rendering service to the appellant. THE respondent denied any breach of terms and conditions of the policy on their part. We have heard the learned Counsel for the appellant and the learned Counsel for the respondent-Insurance Company and have also carefully gone through the impugned judgment and order and the Zmaterial placed on record before the District Forum.

SO far as the claim of the appellant/complainant regarding the excise duty from the respondent-Insurance Company is concerned, the learned Counsel for the appellant was specifically asked to show any such provision or clause under the modvat policy, which entitles the appellant for the refund of the excise duty from the respondent- Insurance Company but the learned Counsel for the appellant failed to show any such document envisaging such provision etc. Since the insured goods were subject to modvat under the excise policy, the excise duty was to be refunded by the Excise Department on regular basis. Mr. Ashok Aggarwal, C.A., Surveyor and Loss Assessor in his report (Annexure R-3) as well as affidavit, deposed that sales tax had been calculated on the basic value of the material/goods and the sale tax on the excise duty is not payable, which plea/deposition, the respondent - Insurance Company failed to rebut by way of any cogent evidence/affidavit. The District Forum, after relying upon the two authorities reported as "Jagdish Prasad Dagar v. Sr. Divisional Manager, LIC", II (1992) CPJ 493 (NC) and "Zenith Computers Ltd. v. New India Assurance Co. Ltd.", I (1995) CPJ 144 (NC)=1995 (2) CON.LT 94 (NC), in our considered view, rightly held that there is no deficiency, on the part of the respondent-Insurance Company, in rendering due service to the appellant because it has fully reimbursed the claim as assessed by the Surveyor. The excise duty has been correctly deducted from the claim as per rules as discussed above. It is our considered opinion that as per the modvat policy, the Excise Department is to pay the excise duty on regualr basis and the liability does not fall on the respondent-Insurance Company. The District Forum has rightly dismissed the complaint of the appellant/complainant. Resultantly, the appeal lacks merit and is dismissed leaving the parties to bear their own costs. Copies of this order be sent to the parties free of charge. Appeal dismissed.