PATTANAIK - (1.) THIS appeal is directed against the Division Bench judgment of Andhra Pradesh High Court in Writ Petition No. 4059 of 1994, wherein, following the earlier judgment of the said Court in Writ Petition No. 11311 of 1991, the High Court dismissed the writ petition.
(2.) THE appellant is the manufacturer of hydrogenated oil. The appellant filed a Reference before the Assistant Collector, Central Excise, Kurnool, claiming that they would be entitled to utilise the accumulated credit, available to them under the Money Credit Scheme, as per Rule 57-K of the Central Excise Rules, 1944 (hereinafter referred to as 'the rules), at the time of rescinding of the Notification No. 27/87 as well as the credit available to them under Notification dated 11/10/1989, issued by the Central Government under Rule 57-K of the Rules. The Assistant Collector disposed of the said Reference by his order dated 9-10-1991, holding that the assessee-appellant is entitled to appropriate the credit available to him on the date of recession of the Notification of 1987, which stood rescinded on 25th of August, 1989 as well as the credit which gets accumulated, pursuant to Notification dated 11th of October, 1989, but not entitled to utilise the credit available under both the Notifications simultaneously and, therefore, the credit would be utilised for payment of duty on the manufactured product, which should not exceed Rupees one thousand per M.T. It is because of this order, the appellant filed the writ petition in the High Court of Andhra Pradesh to stay the recovery of excise duty contemplated under Notice dated 14-10-1998 issued by the Superintendent of Central Excise, Kurnool. The identical question raised by the appellant in the writ petition filed before the Andhra Pradesh (High Court) having been answered against the assessee in another writ petition, which stood disposed of on 28-4-1998, the present writ petition by the appellant also stood dismissed. Be it be stated that in disposing of Writ Petition No. 11311 of 1991 on 28-4-1998, the High Court also came to the conclusion that the assessee is not entitled to adjust the available credits under Notification of the year 1987 as well as the Notification of the year 1989, simultaneously, and therefore, there has been no illegality committed by the Excise Authorities. The question for consideration, therefore is whether an assessee like the appellant, who accumulated credits to his accounts on account of the incentive Notification issued by the Central Government in exercise of powers conferred under Rule 57-K of the Rules by the date of the recession of the said notification on 25/08/1989 can make adjustment towards payment of duty in addition to the credits earned, pursuant to Notification dated 11th of October, 1989 simultaneously. Under the Rules, more particularly Rule 57-K the Central Government is empowered by Notification in the Official Gazette to allow credit of money in respect of certain raw materials used in the manufacture of certain excisable goods. The notification require to be issued under sub-Rule (1) of Rule 57-K must specify the finished excisable goods to which the provisions of the sections would apply as well as the rates at which the credit of money is to be given for the use of such inputs in the manufacture of final products. Under Rule 57-N the credit of money allowed in respect of any inputs pursuant to notification issued under Rule 57-K would be utilised towards the payment of duty of excise on the final products in relation to manufacture of which such inputs are intended to be used in accordance with the declaration filed under Rule 57-O. Rule 57-O provides the procedure to be observed by the manufacturer. In accordance with the provisions contained in Rule 57-K the Central Government issued the notification dated 20-3-1987, which is extracted herein in extenso for better appreciation of the point in issue in this case. "Notification No. 27/87-CE., dated 1-3-1987 as amended by Notification No. 99/87-C.E. dated 20-3-1987; No. 17/88-CE dated 1-3-1998 and No. 295/88-CE dated 16-12-1988. Set-off of duty on use of specified minor oils in the manufacture of vegetable products. In exercise of the power conferred by Rule 57-K of the Central Excise Rules, 1944, the Central Government hereby specifies:- (i) the inputs, namely, fixed vegetable oils of the description in Column (2) of the Table hereto annexed and used in the manufacture of the final products, namely vegetable products falling under sub-heading No. 1504.000 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and (ii) the rates in the corresponding entry in Column (3) of the said Table as the rate at which credit may be granted for use of such inputs in the manufacture of the said final products, for the purpose of Section AAA of Chapter V of the said rules and stipulates that the grant of credit and utilisation thereof shall in addition to the provisions of the said section be subject to the following conditions, namely:- (i) the credit shall be taken only in respect of the quantity of oil subjected to hydrogenation on or after the 1st day of March, 1987 for the manufacture of the said final products and the credit shall be taken only on the date on which the oils has been so hydrogenated; (ii) the credit taken during any calendar month shall be utilised for payment of duty on the said final products only after the commencement of the succeeding month; (iii) the amount of credit utilised for payment of duty on any individual clearance of the said final products shall not exceed rupees one thousand per tonne of vegetable products cleared and the excess credit, if any, available in the credit account shall not be refunded to the manufacturer or adjusted against or utilised for payment of duty on any other excisable goods under any circumstances; (iv) where the description in column (2) of the Table specifies solvent extracted variety of the oil, the manufacturer shall within 5 months from the date of taking credit, or such extended period as the Assistant Collector of Central Excise may allow in this behalf, produce a certificate from an officer not below the rank of Deputy Director in the Directorate of Vanaspati Vegetable, Vegetable oils and Fats in Ministry of Food and Civil Supplies of the Government of India to the effect that the said Oil has been manufactured by the solvent extraction method; and (v) the credit shall be taken only in respect of indigenous inputs and the manufacturer shall produce such documents as may be required by the Assistant Collector of Central Excise in this regard. Provided that in the case of palm oil used as input the manufacturer shall within 5 months from the date of taking credit or within such extended period as the Assistant Collector of Central Excise will allow in this behalf, produce a certificate from an officer not below the rank of Deputy Director in the Directorate of Vanaspati, Vegetable Oils and Fats in the Ministry of Food and Civil Supplies of the Government of India to the effect that the said oil has been of indigenous origin. TABLE S. NoFixed Vegetable OilsRate of credit per tonne of the fixed vegetable oil 123 01.Rice Bran OilRs. 6000 02.Mehuwe OilRs. 6500 03.Water Melon Seed OilRs. 6500 04.Solvent extracted Cotton Seed oilRs. 4000 05.Solvent extracted Mustard OilRs. 3250 06.Solvent extracted Rape Seed OilRs. 3250 07.Solvent extracted Sunflower OilRs. 3250 08.Solvent extracted Safflower OilRs. 3250 09.Palm OilRs. 3250 Explanation - In this notification, "Vegetable products" means any vegetable oils or for which, whether by itself or in admixture with any other substance, has by hydrogenation or by any other process, been hardened for human consumption." This notification stood rescinded by the subsequent Notification dated 25th of August, 1989. Shortly, thereafter, a fresh notification was issued on 11th of October, 1989 by the Central Government in exercise of the same power conferred under Rule 57-K of the Rules, providing the credit in respect of the quantity of oil subjected to hydrogenation on or after 1 1/10/1989 for the manufacture of the same final product and it was stipulated that the credit could be taken only on the date on which the oil has been so hydrogenated. The aforesaid Notification dated 11/10/1989 is quoted herein below in extenso: Government of India Ministry of Finance (Department of Revenue) New Delhi, dated the 11/10/1989. NOTIFICATION No. 45/89 - Central Excise (N.T.) GSR (E):- In exercise of the powers conferred by Rule 57-K of the Central Excise Rules, 1944 the Central Government hereby specifies: (i) the input; namely, fixed vegetable oils of the description in Column (2) of the table hereto annexed and used in the manufacture of the final products, namely, vegetable products falling under sub-heading No. 1504.00 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and (ii) the rates in the corresponding entry in Column (3) of the said Table as the rate at which credit may be granted for use of such inputs in the manufacture of the said final products. For the purpose of Section AAA of Chapter V of the said Rules and stipulates that the grant of credit and utilisation thereof shall, in addition to the provisions of the said section be subject to the following conditions namely: (i) the credit shall be taken only in respect of the quantity of oil subjected to hydrogenation on or after the eleventh day of October, 1989 for the manufacture of the said final products and the credit shall be taken only on the date on which the oil has been so hydrogenated; (ii) the credit taken during any calendar month shall be utilised for payment of duty on the said final products only after the commencement of the succeeding month; (iii) the quantity of credit utilised for payment of duty on any individual clearance of the said final products shall not exceed rupees one thousand per tonne of vegetable products cleared and the excess credit, if any, available in the credit account shall not be refunded to the manufacturer or adjusted against or utilised for payment of duty on any excisable goods under any other circumstances; (iv) where the description in Column(s) of the table specifies solvent extracted variety of the oil, the manufacturer shall within five months from the date of taking credit or such extended period as the Assistant Collector of Central Excise many allow in this behalf, produce a certificate from an officer not below the rank of Deputy Director in the Directorate of Vanaspati, Vegetable Oils and Fats in the Ministry of Food and Civil Supplies of the Government of India to the effect that the said oil has been manufactured by the solvent extraction method; and (v) the credit shall be taken only in respect of indigenous inputs and the manufacturer shall produce such documents as may be required by the Assistant Collector of Central Excise in this regard; Provided that in the case of Palm Oil used as input the manufacturer shall within five months from the date of taking credit, or within such extended period as the Assistant Collector of Central Excise will allow in this behalf, produce a certificate from an officer not below the rank of Deputy Director in the Directorate of Vanaspati, Vegetable Oils and Fats in the Ministry of Food and Civil Supplies of the Government of India to the effect that the said oil has been of indigenous origin, JUDGEMENT_16_SUPREME4_2000Html1.htm Explanation - In this notification "Vegetable Product" means any vegetable oil or which, whether by itself or in admixture with any other substance, has by hydrogenation or by any other process, been hardened for human consumption." Mr. Dushyant A. Dave, the learned senior counsel, appearing for the appellant contended before us that an assessee, who has earned the credit pursuant to notification, is entitled to get the same adjusted towards the payment of duty of excise on the final products notwithstanding the recession of the notification under which the credits stood accumulated in favour of an assessee. According to the learned counsel, this being the position, when the same assessee earns further credits pursuant to a fresh notification, issued by the Government under Rule 57-K he will be entitled to utilise, both, the credits accumulated in favour of the assessee towards payment of duty of excise on the final products and as such the excise authorities committed error in allowing adjustment only to the extent of Rs. 1000.00 per M.T. and refusing the adjustment of both the credits accumulated simultaneously. In support of this contention, reliance was placed on the decision of the Gujarat High Court in the case of Dipak Vegetable Oil Industries Ltd. v. Union of India, 1991 (52) ELT 222 (Guj) as well as the decision of Andhra Pradesh High Court in the case of Agarwal Industries Ltd. v. Union of India, 1992 (57) ELT 561 (AP). The learned counsel also contended that against the decision of the Gujarat High Court an SLP has been filed in this Court, which SLP stood dismissed and such dismissal tantamounts to confirmation of the view taken by the Gujarat High Court by this Court. The said order of dismissal has been reported in 1998 (100) ELT Page A-175. Mr. Dave also contended that under the Modvat Scheme, a rule had been introduced to Rule 57-F, which is read as Rule 57-F (4-A) which rule stipulated that any credit of specified duty lying unutilised on 16th of March, 1995 with a manufacturer of tractor, would lapse and shall not be allowed to be utilised for payment of duty of any excisable goods and this Court in the case of Eicher Motors Ltd. v. Union of India, 1999 (106) ELT 3 : (1999 AIR SCW 563 : AIR 1999 SC 892) came to the conclusion that a right which had been accrued to a party under any available scheme cannot be affected by any subsequent Rule or Notification and the assessee would be entitled to avail of the credit which had not been utilised on the date, Rule 4-A came into existence. Mr. Dave contends that though this decision is not of direct application but the principle enunciated therein should be made applicable and the appellant should be permitted to utilise the credit of money already accrued in respec of the inputs prior to the rescinding of the notification in paying of the duty of excise leviable on the final product. Mr. Dave also referred to the speech of the Finance Minister and pressed the same in support of his contention.
(3.) MR. T.L.V. Iyer, the learned senior counsel, appearing for the Union of India did not dispute the position that the credits already acquired could be utilised notwithstanding rescinding of the relevant notification, even though the stand taken by the Union of India in the counter-affidavit filed in this Court is to the contrary. But according to MR. Iyer the accumulated credit in favour of the assessee under the old notification of the year 1987 can be utilised subject to the conditions mentioned in the notification itself and in that view of the matter, an assessee is not entitled to utilise the accumulated credit under the old notification as well as the credits earned under the new notification of the year 1989 simultaneously and accordingly, the authorities of the department have taken the correct view. In support of this contention, reliance has been placed on the decision of the Karnataka High Court in the case of Union of India v. Modern Mills Ltd., 1994 (72) ELT 246 (Kant). In view of the rival submissions at the Bar, the only question that falls for consideration is whether the decisions of the Gujarat and Andhra Pradesh High Courts, on which reliance has been placed by Mr. Dave are susceptible of a construction that the Courts came to the conclusion that the accumulated credits under two different notifications one of the year 1987 and another of the year 1989 could be availed of by the assessee for the purpose of payment of duty on the manufactured goods simultaneously or the condition No. 3 of the notification issued in the year 1987, providing that the amount of credit utilised shall not exceed Rs. 1000.00 per M.T. of available products, would operate. Answer to this question would depend upon an interpretation of the scheme itself and the notification issued as well as the ratio of the decisions of these High Courts on which the counsel for the appellant placed reliance.;