CENTURY ENKA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition filed under Article 226 of the Constitution of India, the petitioners are challenging the legality of the show cause notice dated March 15, 1979 issued by the Superintendent, Central Excise, Range Kirkee, calling upon the petitioners to show cause as to why an amount of Rs. 40,66,158.29 should not be recovered from them as countervailing duty.

(2.) The facts which led to the issuance of this show cause notice, a copy of which is annexed as Ex. 'I' to the petition, are as follows : The Petitioner No. 1 is a Company incorporated under the Companies Act and has its registered office at Calcutta, while the petitioners Nos. 2 and 3 are the President and Secretary respectively of the Company. The Company manufactures at its factory at Bhosari, Pune, nylon/6 Yarn and Polyester yarn. For the purpose of manufacture of nylon yarn, the petitioners imported between May 23, 1978 and September 1978 polyamide chips of spinning grade. The dispute involved in this petition is whether the petitioners are liable to pay countervailing duty in respect of the polyamide chips.

(3.) A large correspondence took place between the petitioners and the Officers of the Central Excise and ultimately on February 21, 1979, the Assistant Collector, Central Excise, Pune informed the petitioners that since the Ministry of Finance have clarified that the imported polyamide chips are not exempt from countervailing duty, the petitioners should pay the said duty on clearance of imported polyamide chips effected prior to the date of the letter. In pursuance of this letter, the Superintendent, Central Excise served the impugned show cause notice upon the petitioners on March 15, 1979. The notice, inter alia, states that the grounds on which the countervailing duty is proposed to be recovered is the clarification issued by the Ministry of Finance contained in letter, dated February 21, 1979. The petitioners have approached this Court to challenge the legality of the same.