- (1.) This writ petition under Article 226 of the Constitution of India raises the question of scope and true interpretation of Notification No. 198/76-C.E., dated June 16, 1976 issued in exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 granting excise duty relief in respect of selected commodities to the extent of 25 per cent of duty payable on goods produced in excess of production in a selected base year.
(2.) Indian Aluminium Company Ltd. (hereinafter referred to as the company) petitioner No. 1 is an existing company within the meaning of the Companies Act, 1956. Petitioner No. 2 is a shareholder of the Company and is a citizen of India. The Company carries on the business, inter alia , of manufacturing and selling aluminium and its allied products. For the purpose of the said business the company owns three aluminium smelting plants at Hirakund in the State of Orissa, at Alupuram in the State of Kerala and at Belgaum in the State of Karnataka. By virtue of the Aluminium (Control) Order, 1970, promulgated under Section 3 of the Essential Commodities Act, 1955, the Central Government has been given the power to regulate the sale of aluminium to specified persons or companies and to control and fix the sale price thereof. By reason of the orders and/or directions issued by the Central Government under the said order, the company is obliged to sell 50 per cent of its total production of aluminium to specified customers at fixed prices (such aluminium is hereinafter referred to as levy aluminium). Aluminium manufactured by the company is an excisable commodity and falls under Item No. 27 of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). The dispute in this writ petition relates to the two financial year, namely, 1976-77 (1st April, 1976 to 31st March, 1977) and 1977-78 (1st April to 31st March, 1978).
(3.) The rate of excise duty on aluminium is, from time to time, specified under the relevant provisions of the Act. During the financial year 1976-77 the rate of excise duty on aluminium falling under Item No. 27 of the First Schedule to the Act commonly known as basic duty of excise was "30 per cent ad valorem plus Rs. 2,000/- per metric tonne." By Notification No. 164/75-C.E., dated July 15, 1975 as amended by Notification No. 49/76-C.E., dated March 16, 1976 under Rule 8(1) of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) the Central Government exempted aluminium falling under the said Item No. 27 from so much of the duty of excise leviable thereon as was in excess of "30 per cent ad valorem plus Rs. 600/- per metric tonne." This exemption was not applicable to levy aluminium. By Notification No. 164/75-C.E., dated July 15, 1976 as amended by Notification No. 49/76-C.E. dated March 16, 1976 and further amended by Notification No. 113/77-C.E., dated June 18, 1977 under Rule 8(1), the Central Government exempted aluminium falling under the said Item 27 from so much of the duty of excise leviable thereon as was in excess of "40 per cent ad valorem plus Rs. 600/- per metric tonne, for the financial year 1977-78. This exemption was not applicable to levy aluminium.;