G.S. Singhvi, J. - (1.) THESE petitions are directed against circular dated 19.10.2000 issued by the Central Board of Excise and Customs, New Delhi (for short, 'the Board') clarifying that Additional Excise Duty (for short 'AED') under the Additional Duty of Excise (Textiles and Textile Articles) Act, 1978 (for short, 'the 1978 Act') would also be leviable on yarns manufactured by 100% Export Oriented Undertakings (for short 'EOU') from indigenous raw -material and cleared into Domestic Tariff Area (for short 'DTA') in addition to Basic Excise Duty (for short 'BED') payable under the Central Excise Act, 1944 (for short 'the 1944 Act'). The petitioners have also prayed for quashing of notices issued by the authorities of the Central Excise Department on the allegation of evasion of Central Excise Duty/contravention of the provisions of the 1944 Act and the rules made therein and/or for payment AED on yard cleared in DTA.
(2.) THE petitioners are registered as 100% EOU engaged in the manufacture of cotton yarns out of indigenous raw -material attracting BED leviable under Section 3 of the 1944 Act and AED leviable under Section 3 of the 1978 Act. They have been availing the exemptions granted by the Central Government from time to time under Section 5A(1) of the 1944 Act. Their grievance is that by issuing the impugned circular, the Board has attempted to deprive them of the benefit of exemptions available under Notification 8/97 -CE dated 1.3.1997 read with Notification 55/91 -CE dated 25.7.1991. The petitioners have challenged circular dated 19.10.2000 by contending that it is ultra vires to the provisions of the 1944 and 1978 Acts and exemption notifications dated 25.7.1991 and 1.3.1997. They have averred that in view of Notification 55/91 -CE dated 25.7.1991, the goods produced and manufactured by them are specifically exempted from levy of AED and, therefore, the Board cannot issue administrative circular for levy thereof. The further case of the petitioners is that by issuing the impugned circular, the Board has brought EOUs at par with domestic manufacturers ignoring the fact that BED and AED are chargeable under different statutes i.e. the 1944 Act and the 1978 Act and the exemption granted under the latter enactment cannot be nullified by issuing an executive fiat. They have also averred that by virtue of the impugned circular, 100% EOUs will be required to pay higher duty as compared to domestic manufactures and in this manner, they will be subjected to hostile discrimination. The respondents have sought dismissal of the writ petitions as premature on the ground that the liability of the petitioners to pay the particular amount of duty is yet to be determined. According to them, as and when orders adversely affecting the petitioners are passed, they can challenge the same by filing appeal etc. under the 1944 Act. On merits, the respondents have averred that the impugned circular is only clarificatory in nature and it does not create any additional burden on the petitioners. According to them, exemption granted vide Notification 55/91 -CE dated 25.7.1991 was in respect of goods exported by EOU and not in respect of clearance of goods in DTA which was covered by Notification 8/97 -CE dated 1.3.1997 (unamended). They have averred that after the amendment made vide notification dated 1.3.2000, the exemption contemplated by Notification 8/97 -CE dated 1.3.1997 with respect to DTA clearance is available in excess of an amount equal to the aggregate of duties of excise leviable under Section 3 of the 1994 Actor under any law for the time being in force and, therefore, the petitioners are liable to pay duty leviable not only under Section 3 of the 1944 Act but also under any other law including the 1978 Act. The respondents have denied the assertion made in the petitions that the impugned circular takes away the benefit of exemption available under the 1978 Act. They have clarified this position by making following statement in paragraph 26 (ii)and (iv) of the written statement filed in C.W. P. No. 16211 of 2000: (ii) That the contents of ground (ii) of the writ petition are wrong and hence denied. It is, however, stated that duty liability in this case has not been created by virtue of Board's circular referred to above. It is pertinent to mention here that Board's circular is only clarificatory in nature. The issue regarding availability of specific exemption to DTA clearances is also incorrect. In fact, as already clarified in the foregoing paras, the exemption available vide Notification No. 55/91 -CE dated 25.7.1991 was in respect of exports only and not for DTA clearances. An export -oriented unit, while availing benefit of Notification No. 8/97 -CE dated 1.3.1997 for DTA clearances, can also simultaneously avail Notification No. 55/91 -CE with regard to goods exported from India. It is further stated that Notification No. 55/91 -CE does not exempt DTA clearances from additional duty of excise which indeed in done by Notification No. 8/97 -CE as it existed prior to 1.3.2000 by exempting DTA clearances from duties as in excess of the amount equal to the duty of excise leviable under Section 3 of the Central Excise Act, 1944. However, Notification No. 11/ 2000 -CE dated 1.3.2000, amended Notification No. 8/97 -CE under which the DTA clearances are exempt from duties as are in excess of an amount equal to the aggregate of the duties of excise leviable, thereon under Section 3 of the Central Excise Act, 1944 or under any other law for the time being in force. It follows, therefore, that prior to 1.3.2000, DTA clearances were eligible to duty payable only under Section 3 of the Central Excise Act, 1944, but now, thereafter have to pay in addition, duties leviable under any other law as well. (iv) That the contents of ground (iv) of the writ petition are wrong and hence denied. The notification which is being challenged by the petitioner is neither unconstitutional nor arbitrary and deserves to be upheld by this Hon'ble Court. It has lucidly been clarified in ground (ii) above that Notification No. 55/91 -CE dated 25.7.1991 exempted goods manufactured in a 100% EOU from additional duty of excise leviable under Additional Duty (Textiles & Textile Articles) Act, 1978 in respect of consignments to be exported from India. This notification did not specifically cover clearances effected by a 100% EOU in Domestic Tariff Area. In fact, this exemption was available by virtue of Notification No. 8/97 -CE dated 1.3.1997. As such, the petitioner is still simultaneously availing benefit of two exemption notifications. One which exempts leviability of AED on consignments exported from the country and the other for clearances effected within the country. As such, since 1.3.2000 the amending Notification No.11/2000 -CE clearly brought about rampant changes by virtue of which additional duty of excise was also levied on 100% EOU in respect of clearances made on DTA.
(3.) SHRI Balbir Singh and Shri Somesh Ojha argued that the objection raised on behalf of the respondents to the maintainability of the writ petitions on the ground of the same being premature and also on the ground that the petitioners can avail alternative remedies after passing of the adverse orders should be rejected because they have challenged the authority of the Board to issue the impugned circular and have also questioned its vires. Learned Counsel submitted that the appellate and other adjudicating authorities appointed under the 1944 Act cannot go into the legality of the circular issued by the Board and, therefore, the remedies of appeal etc. cannot be treated as effective alternative remedies. In support of this argument, learned Counsel relied on the decisions in A. V. Vekateswaran, Collector of Customs, Bombay v. : 1983ECR2151D(SC) and Goodyear India Ltd. v. Union of India 1990 (40) ELT 39. On merits, the learned Counsel argued that BED and AED are two different types of duties chargeable under the 1944 Act and the 1978 Act respectively and, therefore, the exemption granted under one of these enactments cannot be taken away in the garb of clarification issued by the Board with reference to the exemption granted under other enactment. They referred to the language of Notifications 55/91 -CE dated 25.7.1991 and 8/97 -CE dated 1.3.1997 to show that while the first notification relates to the exemption from payment of AED, the second relates to exemption from payment of BED and argued that any amendment made in Notification 8/97 -CE cannot affect the exemption granted under Notification 55/91 -CE. Learned Counsel further argued that the circular issued by the Board directing the levy and recovery of AED on the clearance of goods by EOUs in DTA should be declared ultra vires to Notification 55/91 -CE dated 25.7.1991. In the end, they argued that the circular issued by the Board cannot, directly or indirectly, nullify the effect of exemption notification issued Section 5A(1) of the 1944 Act and, therefore, the impugned circular should be quashed.;