MAHESHWARI MILLS LTD. Vs. UNION OF INDIA AND OTHERS
HIGH COURT OF GUJARAT
Maheshwari Mills Ltd.
UNION OF INDIA AND OTHERS
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(1.)We had heard these petitions at length and we had indicated to the learned advocates that we would dispose of these petitions as finally heard. At that time Mrs. Mehta and Mr. J.D. Ahmera had stated that they would waive service of rule on behalf of the respondents and the Court may dispose of the petitions finally. Accordingly we issue rule. Mrs. Mehta and Mr. Ajmera waive serviceof rule in each petition and we now proceed to dispose of the petitions on merits.
(2.)In this batch of petitions the petitioner-Companies are engaged in the manufacture and production of cotton and man-made fabrics covered under Chapters52, 54 and 55 of the Central Excise Tariff Act, 1985 (hereinafter called the Tariff Act'). These manufacturing concerns have taken out L-IV licences under the Central Excises and Salt Act, 1944 (hereinafter called 'the 1944 Act') read with the Central Excise Rules, 1944 (hereinafter called 'the Rules') framed thereunder. According to the petitioners, even though man-made fabric is an excisable commodity under the Tariff Act, no duty of excise is leviable thereon under Section 3 of the 1944 Act but an additional duty of excise is levied on specified goods under sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (hereinafter called 'the 1957 Act') i.e., inter alia, on goods falling under Chapters 54 and 55 of the Tariff Act. Section 3 of the 1957 Act reads as under:-
"3. Levy and collection of additional duties(1) There shall be levied and collected in respect of the following goods, namely, sugar, tobacco, cotton fabrics, silk fabrics, man-made fabrics and woollen fabrics produced or manufactured in India and on all such goods lying in stock within the precincts of any factory, warehouse or other premises where the said goods were manufactured, stored or produced, or in any premises appurtenant thereto, duties of excise at the rate or rates specified in the First Schedule to this Act.
(2) The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Central Excises and Salt Act, 1944, or any other law for the time being in force.
(3) The provisions of the Central Excises and Salt Act, 1944, and the rules made thereunder, including those relating to refunds and exemptions from duty, shall, so far as may be, apply in relation to the levy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in sub-section (1)."
By Notification No. 60/87 dated 1st March 1987 issued in exercise of power conferred by Rule 8(1) of the Rules partial exemption was granted in respect of certain man-made fabrics, namely, goods falling within the Headings 54.09, 54.12, 55.08, 55.11 and 55.12 of Chapters 54 and 55 of the Tariff Act. The petitioners contend that they were paying duty as per this notification (as amended by Notification No. 142/87 dated 12th May 1987 and corrected by Corrigendum dated 7th July 1987) till 24th November 1987.
(3.)On 25th November 1987, the Central Government issued another Notification No. 254/87, (Annexure 'A') superseding the earlier Notification No. 60/87 whereby the basis for grant of exemption underwent a change in respect of the goods covered under the afore stated headings. The petitioners contend that the net effect of this change is an increase in the additional duty of excise on the specified goods. The question then is, whether goods manufactured before the Notification No. 254/87 dated 25th November 1987 came into effect but removed from the factory premises would be governed by the said notification or the earlier Notification No. 60/87 which was in operation till then. According to the petitioners, the goods manufactured prior to 25th November 1987 and lying in stock of the Company would be entitled to the benefit of the exemption Notification No. 60/87 and would be liable to pay additional duty on the basis thereof. The revenue contends otherwise.
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