1990 (11) TMI 149 - HC - Central Excise

Validity of Clubbing Clearances Upheld Under Excise Duty Exemption Notification

VOPAK PHARMACEUTICALS Versus UNION OF INDIA

The court upheld the validity of clubbing clearances for excise duty exemption under Notification No. 175/86 in a case involving a manufacturer of Patent ... Small Scale Unit - Value of clearances from a factory Issues:Manufacturer claiming exemption from excise duty, clubbing of clearances for exemption under Notification No. 175/86, constitutionality of clubbing clearances, reliance on Division Bench judgment, relevance of prior case law on clubbing clearances.Analysis:The petitioner, a manufacturer of Patent and Proprietary Medicines and Drugs, sought exemption from excise duty under various notifications but faced refusal from the second respondent to release goods manufactured from a factory where multiple licensees operated. The petitioner challenged the clubbing of clearances under Notification No. 175/86, citing violation of Article 19 (1) (g) of the Constitution of India. The court noted a previous batch of writ petitions where a similar issue was raised and rejected, upholding the constitutionality of clubbing clearances. The petitioner relied on a Division Bench judgment, but the court found it irrelevant as it did not address the specific argument presented. Additionally, the court differentiated the facts of a prior case law cited by the petitioner, emphasizing the need for factual evidence in cases involving clubbing of clearances. The court clarified that the current petition focused on the validity of the notification allowing clubbing, rather than factual grievances, and upheld the method under clause 3 of the notification as valid. As there was no relief sought to challenge factual findings, the court dismissed the writ petition, affirming the validity of clubbing clearances under the notification.This judgment addresses the issue of clubbing clearances for excise duty exemption under Notification No. 175/86 in the context of a manufacturer of Patent and Proprietary Medicines and Drugs. The petitioner's contention against clubbing clearances was based on the alleged violation of Article 19 (1) (g) of the Constitution of India. The court, however, upheld the constitutionality of clubbing clearances, citing a previous order in a similar case where such clubbing was deemed valid. The petitioner's reliance on a Division Bench judgment and prior case law was deemed irrelevant as they did not directly address the specific argument raised in this case. The court emphasized the need for factual evidence in cases involving clubbing of clearances, highlighting the distinction between challenging the validity of the notification and disputing factual findings. Ultimately, the court dismissed the writ petition, affirming the validity of clubbing clearances under the notification and suggesting avenues for challenging factual determinations through appeals.