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of <h1>Court denies exemptions in tax case, upholds legality of payment notices</h1> <h3>SRI MEENAKSHI FOUNDRY Versus SUPERINTENDENT OF C. EX.</h3> SRI MEENAKSHI FOUNDRY Versus SUPERINTENDENT OF C. EX. - 1990 (46) E.L.T. 219 (Mad.) Issues Involved:1. Legality of the notice demanding payment of Rs. 39,249.60 while the revision petition was pending.2. Legality of the notice demanding repayment of Rs. 21,763.20 erroneously refunded.Issue-wise Detailed Analysis:1. Legality of the Notice Demanding Payment of Rs. 39,249.60:The petitioners, manufacturers of electric motors and power-driven pumps under the Small Scale Sector, were initially granted an exemption from the payment of duty for electric motors under Notification No. 71/78 during the financial year 1979-1980. However, the 1st respondent issued a show cause notice on 6-12-1979 requiring duty on electric motors cleared under exemption from 1-4-1979 to 19-7-1979, amounting to Rs. 99,971.20. This demand was confirmed by the 2nd respondent on 9-1-1981. The petitioners appealed to the 3rd respondent, who partially allowed the appeal, reducing the demand to Rs. 39,249.60. The petitioners then filed a revision petition before the 4th respondent, which remained pending. Despite the pending revision, the 1st respondent issued a notice on 14-7-1981 demanding payment of Rs. 39,249.60 within ten days. The court found that the petitioners had failed in their appeal and no stay had been granted by the revisional authorities. Consequently, the Superintendent, Central Excise, acted legally in directing the petitioners to pay the duty as per the Appellate Collector's order.2. Legality of the Notice Demanding Repayment of Rs. 21,763.20 Erroneously Refunded:The petitioners were initially refunded Rs. 21,763.20 for the duty paid from 1-4-1979 to 30-4-1979 under the same exemption notification. However, the 1st respondent issued a show cause notice on 6-12-1979, including this amount in the total demand of Rs. 99,971.20. The 3rd respondent, in his order dated 8-6-1981, disallowed the claim of the 1st respondent to the tune of Rs. 60,721.60 as time-barred, effectively including the Rs. 21,763.20 as time-barred. Despite this, the 1st respondent issued another notice on 14-7-1981 demanding the repayment of Rs. 21,763.20, which was contested by the petitioners as illegal and unconstitutional. The court found that the Assistant Collector had wrongly extended the benefit of the exemption to the petitioners, and the refund was erroneously granted. The Collector of Central Excise set aside the refund order on 17-10-1980. The petitioners' revision petition against this order was still pending, and the stay was refused. Thus, the Superintendent's action in issuing the notice was deemed legal, and the petitioners were bound to repay the amount.Conclusion:The court concluded that the petitioners were not entitled to the exemptions claimed as their clearances in the preceding financial year exceeded the specified limit. The notices issued by the Superintendent of Central Excise were found to be legal and justified. Consequently, the reliefs prayed for in both writ petitions were denied, and the petitions were dismissed without any order as to costs.
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