TaxTMI 
TaxTMI 
2008 (12) TMI 71
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.... definition read as follows: "2(f) "manufacture" includes any process,- (i) xxx xxx xxx (ii) xxx xxx xxx (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the products marketable to the consumer, and the word "manufacture" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;" Razors and razor blades, etc., which the petitioners have been manufacturing in Rajasthan since 1993, are among the items specified in Third Schedule, per Serial No. 64. On 10th June, 2003, Central Government issued a notification No. 50 of 2003, copy Annexure P-1, exempting the goods, specified in the First and the Second Schedules of the Central Excise Tariff Act, 1985, cleared from a unit located in Uttrakhand and Himachal Pradesh, from the whole of duty of excise or additional ....
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....and, therefore, the petitioners filed the present writ petition, under Article 226 of the Constitution of India, seeking the following reliefs: "(i) Issue of writ of certiorari or a writ order or direction in the nature of certiorari quashing the communication dated 23-1-2008; (ii) Issue of writ of certiorari or a writ order or direction in the nature of certiorari quashing the Notification No. 1 of 2008 dated 18-1-2008, insofar it denies the benefit of the Notification No. 50 of 2003 to the Petitioner-Company; (iii) Issue a writ of mandamus or a writ order or direction in the nature of mandamus declaring that the Petitioner-Company is entitled to the benefits of the exemption Notification No. 50 of 2003 and that Notification No. 1 of 2008 is not applicable to units set up before 18-1-2008; (iv) Issue a writ of mandamus or a writ order or direction in the nature of mandamus directing the Respondents not to insist upon seeking a registration under the Central Excise Rules, 2002 and to deposit excise duty for a period of 10 year from 20-12-2006; and (v) Pass such other or further orders/directions as this Hon'ble Court may deem fit and proper in the facts and circumstances of th....
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....It was stated that notification Annexure P-1 had been issued in public interest and when it was found that it was not serving any public interest, exemption, in respect of packing, repacking, labelling, re-labelling units, was withdrawn, again in the public interest, vide notification Annexure P-11. 5. Placing reliance upon judgment of the Hon'ble Supreme Court in Kashinka Trading v. Union of India, 1994 (74) E.L.T. 782 (S.C.) = (1995) 1 SCC 274 it was pleaded that grant of exemption from duty amounted to suspending the operation of provision regarding levy of charge and duty and that the very fact that such an exemption amounted to suspension of the charging provision implied that the suspension was liable to be revoked. It was also pleaded by making reference to Sales Tax Officer v. Shree Durga Oil Mills, 1998 (97) E.L.T. 202 (S.C.) that public interest is superior equity which can always override individual equity or any consideration of private loss or gain. 6. We have heard Mr. L. Nageshwara Rao, learned Senior Advocate, appearing for the petitioners, and Mr. Sandeep Sharma, learned Assistant Solicitor General of India, on behalf of the respondents. 7. Learned counsel for t....
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....submitted that the right that had accrued to the petitioners, by virtue of notification Annexure P-1, was to avail exemption of whole of excise duty, for a period often years, in respect of the goods, packing, repacking or labelling or re-labelling of which had commenced on commercial basis, prior to the issuance of notification dated 18th January, 2008, Annexure P-11. It was submitted that Annexure P-11 was to affect those industrial units, which had not commenced packing, repacking, labelling, re-labelling, etc., of their goods on commercial basis, prior to 18th January, 2008, the date of issue of notification Annexure P-11. 10. Learned Assistant Solicitor General of India, while countering the aforesaid submission, though conceded that the operation of notification Annexure P-11 was prospective and not retrospective, urged that the right that had accrued to the petitioners, within the meaning of clause (c) of Section 38A of the Central Excise Act, 1944, was exemption from payment of excise duty, in respect of the goods packed, repacked, labelled, re-labelled, etc., in the unit at Baddi up to 18th January, 2008, and that prospectiveness of notification Annexure P-11 was in conte....
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....duced; (e) date on which option under this notification has been exercised; (iii) The manufacturer may, for the current financial year, submit his option in writing on or before the 30th day of November, 2003. 2. The exemption contained in this notification shall apply only to the following kinds of units, namely :- (i) new industrial units which have commenced commercial production on or after the 7th day of January, 2003, but not later than the 31st day of March, 2007 (substituted as 31st day of March, 2010, vide notification dated 2nd August, 2006, Annexure P-4); (ii) industrial units existing before the 7th day of January, 2003, but which have undertaken substantial expansion by way of increase in installed capacity by not less than twenty-five per cent on or after the 7th day of January, 2003, but have commenced commercial production from such expanded capacity, not later than the 31st day of March, 2007 (substituted as 31st day of March, 2010, vide notification dated 2nd August, 2006, Annexure P-4). 3. The exemption contained in this notification shall apply to any of the said units for a period not exceeding ten years from the date of publication of this notification i....
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....of India and others v. Asian Food Industries, 2006 (204) E.L.T. 8 (S.C.) = (2006) 13 SCC 542, and MRF Ltd. v. Assistant Commissioner (Assessment) Sale Tax, (2006) 8 SCC 702. 15. In Asian Food Industries' case (supra), it was held that by reason of a policy, a vested or accrued right cannot be taken away. Such a right, therefore, cannot a fortiori be taken away by an amendment. 16. In MRF's case (supra), it was held that the settled position in law is that where a right has already accrued, for instance, the right to exemption of tax for a fixed period and the conditions for that exemption have been fulfilled, then the withdrawal of the exemption, during that fixed period cannot affect the already accrued right. 17. In the instant case, Section 38A of the Central Excise Act, 1944, saves the right accrued to the petitioners, under notification Annexure P-1. The right saved, by virtue of this provision, is not only the exemption availed upto the date of the issuance of the amending notification Annexure P-11, but exemption for the entire period of ten years, specified in Annexure P-1, in view of the law laid down by the apex Court in MRF's case (supra). 18. Learned counsel represe....
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....toppel against the State is that the promise made by the State should not have been against the statute, under which it purports to have been made or it is in the public interest that the doctrine should not be pressed into service. Judgments relied upon in this behalf are: M/s. Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh and others, (1979) 2 SCC 408; MRF Ltd., Kottayam v. Asstt. Commissioner (Assessment) Sales Tax and others, (2006) 8 SCC 702; Shrijee Sales Corporation and another v. Union of India, 1997 (89) E.L.T. 452 (S.C.) = (1997) 3 SCC 398; U.P. Power Corporation and another v. Sant Steels & Alloys (P) Ltd. and others (2008) 2 SCC 777; Pawan Alloys and Casting (P) Ltd., Meerut v. UP. State Electricity Board and others (1997) 7 SCC 251; State of Punjab v. Nestle India Ltd. and another, (2004) 6 SCC 465; Pournami Oil Mills and others v. State of Kerala and another, 1986 (Supp) SCC 728. 23. In M/s. Motilal Padampat Sugar Mills case (supra), it was held that equity of Promissory Estoppel applies to Government or State in whichever capacity it acts and that the Government may not be bound by Promissory Estoppel, in case it shows that equity lies in its favour....
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....ny incentive for the import of PVC resin and, therefore, that notification could not be said to have extended any representation, muchless a promise to a party getting the benefit of it to enable it to invoke the doctrine of Promissory Estoppel, against the State. The said notification was held to have been issued in the public interest, without making any representation or promise and so it could be withdrawn any time, if the public interest so required or the public interest, which existed, at the time of the issuance of the withdrawn notification, ceased to exist. It was also held that Kashinka Trading case was not an authority for the proposition that even if a claim of exemption from import duty was resorted to in public interest, by way of an incentive for a class of importers and even though such public interest continued to subsist during the currency of' such an exemption notification and that promisees for whose benefit, such exemption was granted, had changed their position relying upon the said exemption notification, it could still be withdrawn before the time mentioned therein, even though public interest did not require the said exercise to be undertaken and even tho....
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....blishes the plea of Promissory Estoppel, raised by the petitioners. 31. Respondents have pleaded that notification Annexure P-1 has been modified, vide notification Annexure P-1, in superior public interest and so the plea of Promissory Estoppel cannot be allowed. 32. Public interest, which prompted the respondents to issue the initial notification, offering incentives to entrepreneurs, is spelt out in the written reply. In para-2 of the preliminary submissions, it is stated that notification Annexure P-1 was issued, pursuant to Office Memorandum No. 1(10)/2001-NER, dated 7-1-2003, received from the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, regarding new Industrial Policy and other concessions for the States of Uttranchal and Himachal Pradesh. This Office Memorandum made a reference to the announcement made by the Hon'ble Prime Minister, during his visit to Uttranchal from 29th to 31st March, 2002, regarding tax and central excise concessions to attract investment in the industrial sector. It is also stated in para-2 of the preliminary submissions that the intention behind notification Annexure P-1 was to provide incentives to environment f....
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....on Annexure P-11. In our considered view, notification Annexure P-11 is prospective, in the sense that the benefit of notification Annexure P-1 will not be available to those industrial units, engaging only in so-called peripheral or incidental activities, which come into operation and comply with the terms and conditions of notification Annexure P-1, after the issuance of notification Annexure P-11. Point (iii) 35. It was submitted that issuance of notices to the petitioners, for registration of their unit at Baddi, for the purpose of payment of excise duty, pursuant to notification Annexure P-11, is arbitrary, unfair and unreasonable, and is, therefore, violative of Article 14 of the Constitution of India. In support of this contention, reliance was placed upon MRF Ltd. v. Assistant Commissioner and others, (2006) 8 5CC 702, particularly para-39, at page 723, which is as follows: "39. MRF made a huge investment in the State of Kerala under a promise held to it that it would be granted exemption from payment of sales tax for a period of seven years. It was granted the eligibility certificate. The exemption order had also been passed. It is not open to or permissible for the Sta....