K.C.Agrawal, A.C.J. - (1.) The Petition under Article 226 of the Constitution has been filed by M/s. Kanoria Chemicals and Industries Ltd., Renukoot, district Mirzapur for the reliefs-quashing the Superintendent (Audit's) direction contained in his letter dated 31.12.1987 and for mandamus directing the Superintendent not to press for recovery of credit of duty during the pendency of the writ petition.
(2.) The petitioner is a public limited company and is engaged in the manufacture of caustic soda, chlorine, hydrochloric acid, stable bleaching powder and other chemicals at Renukoot. For manufacturing caustic soda the petitioner are using titanium electrodes duly coated with special coating, which work as anodes. The petitioners claim that it was since engaged in manufacture of the above articles use raw materials on which excise duty had already been paid and it was entitled to the benefit of the rules which are generally known as MODVAT Rules. The petitioners further asserted that MODVAT relief is not available for duty-paid items such machinery, plant, equipment, apparatus etc. as indicated Under Rule 57-A. The petitioner would be entitled to get credit for the duty paid on these items.
(3.) A counter affidavit has been filed on behalf of the State. In paragraphs Nos. 5 and 6 it has been asserted that the Superintendent's report which has been described as audit report will not implemented without affording an opportunity to show cause to the petitioners. It was further asserted that audit report was not by itself conclusive of the controversy and that the authorities at the appropriate time will go into the various questions raised in the writ petition. It has further been asserted that for the present the respondent the excise department did not have a mind to withdraw the benefit to get credit for the duty paid on these items.;