1991 (2) TMI 130 - HC - Central Excise

High Court allows petitioners to use rice bran oil credit pre-notification date

The High Court held in favor of the petitioners, ruling that they were entitled to utilize the accumulated credit from the use and hydrogenation of rice ... Credit of money Issues:1. Interpretation of Notification No. 39/89-C.E. (NT) dated 25-8-1989 regarding credit facility for usage of minor oils.2. Entitlement of petitioners to utilize unavailed credit accumulated on the use and hydrogenation of rice bran oil prior to 30-8-1989.3. Validity of directions restraining petitioners from utilizing accumulated credit.4. Comparison with judgments from Gujarat High Court and Delhi High Court on similar issues.5. Application of Rule 57N and Notification 27/1987 in determining the right to utilize accumulated credit.Detailed Analysis:1. The petitioners filed a writ petition seeking a mandamus to prevent the respondents from implementing Notification No. 39/89-C.E. (NT) dated 25-8-1989 before 30-8-1989 and to allow them to use the unavailed credit from the use of minor oils like rice bran oil. The notification withdrew the credit facility for the usage of minor oils, leading to a dispute over the retrospective application of the notification.2. The petitioners claimed entitlement to utilize the unavailed credit accumulated on the use and hydrogenation of rice bran oil before 30-8-1989. They argued that there was no time limit prescribed for claiming credit, and the accumulated credit was being adjusted against Vanaspati clearances. The excise duty payable on Vanaspati was a key factor in determining the utilization of credit.3. The petitioners challenged the respondents' decision to prevent them from utilizing the accumulated credit earned from the use of minor oils. They sought a writ of mandamus to restrain the respondents from restricting their use of the credit. The issue revolved around the petitioners' right to utilize the credit in accordance with the scheme introduced by Notification No. 27/1987.4. Judgments from the Gujarat High Court and Delhi High Court were cited, where similar issues were addressed. The Gujarat High Court allowed a writ petition, directing the petitioners to utilize the credit earned before the notifications in question were rescinded. The Supreme Court dismissed the Special Leave Petition against the Gujarat High Court's decision. The Delhi High Court also followed the Gujarat High Court's view on the matter.5. The High Court analyzed the application of Rule 57N and Notification 27/1987 in determining the petitioners' right to utilize the accumulated credit. It was concluded that the petitioners were entitled to use the credit in the manner indicated in the notification, despite the withdrawal of the credit facility through Notification No. 39/89-C.E. (NT). The High Court issued a writ of mandamus directing the respondents to permit the petitioners to utilize the accumulated credit in addition to the benefits under subsequent notifications.