Kalyan Jyoti Sengupta, J. - (1.) In this writ petition the petitioners raised questions whether in view of Notification No. 16/96, dated 23rd July, 1996 by which payment of excise duties on vegetable product having been abolished, the credit already accumulated on the strength of the Notification No. 45/89, dated 11th October, 1989 stood lapsed or not, if not, then whether such credit can be refunded or adjusted against excise duty payable in respect of other product of the petitioners. Short fact of the case is stated hereunder :
(2.) The petitioner No. 1 is manufacturer of banaspati product. For manufacturing of the said product various kinds of oil can be used as input, and the same are classified as major oils and minor oils. Soyabeans oil, cotton seed oil, which had hitherto been used by the petitioners as input, are classified as major oils while mahua oil, stermelon seed oil solution extracted from safola and rice bran oil are classified as minor oils. Both the major oils and minor oils require processing for manufacture of banaspati. However, minor oils require more processing with the help of special technology and equipment involving heavy capital expenditure. Pursuant to policy decision by a Notification No. 27/87, dated 1st March, 1987, the respondent No. 1 specified certain inputs namely fixed vegetable oils of the description in column 2 of the table annexed in the said notification for use in the manufacture of final products namely vegetable products falling under sub-heading No. 1504.00 of the schedule of the Central Excise Tariff Act, 1985 and the rates in the corresponding entry in column 3 to the said table as the rate at which credit may be granted for input in the manufacture of final products for the purpose of Section AAA of Chapter V of Central Excise Rules. By the said notification the Central Government further stipulated that grant of credit and utilisation thereof shall, in addition to the provision of the section, be subject to certain conditions as specified in the said section. It was one of the conditions in the notification that the quantity of credit utilised for payment of duty of excise any clearance of the final product namely banaspati shall not exceed rupees one thousand per ton of vegetable products cleared and excess credit, if any, available shall not be refunded to the manufacturer or adjusted against or utilised for payment of duty of excisable goods under any circumstances.
(3.) Pursuant to the notification petitioners started using minor oils in substantial quantities as raw materials for manufacture of banaspati. Accordingly, they incurred substantial costs because of investment made for setting up necessary plants and introduction of necessary technology in their factories for processing minor oils. Such technology was not necessary previously for use of major oils as raw materials. By this process the petitioner had started availing itself of benefit for taking credit in terms of the notification until 11th September 1989 when it was notified that the aforesaid notification giving benefit of credit was withdrawn by another Notification 39/89, dated 25th August, 1989.;