NATIONAL NEWSPRINT AND PAPER MILLS LIMITED Vs. DIRECTOR INSPECTION AND AUDIT

JUDGEMENT

(1.) THE petitioner is a Govt. company. THE petitioner manufactures newsprint and wrapper. THE wrapper manufactured by the petitioner is used for wrapping the newsprint manufactured by it. THE production of newsprint and wrapper in the financial year 1969-70 exceeded the production in 1964-65. THE petitioner applied for tax credit certificate under Section 280ZD of the I.T. Act, 1961, to the Central authority constituted under the Tax Credit Certificate (Excise Duty on Excess Clearance) Scheme, 1965, which is a scheme framed under Section 280ZE by the Central Govt. THE Central authority by order dated 24th May, 1971, granted a tax credit certificate for Rs. 5,774 only. THE petitioner then filed an appeal under para. 9 of the Scheme to the appellate authority, i.e., the Director of Inspection, Customs and Central Excise, New Delhi. By order dated 17th May, 1978, the appeal was dismissed by the director. By this petition under Article 226 of the Constitution, the petitioner challenges these orders of the Central authority and the director.

(2.) SECTION 280ZD of the Act provides for the grant of a tax credit certificate in relation to increased production of certain goods. The certificates can be granted for the financial years 1965-66 to 1969-70. The base year for determining increased production is the financial year 1964-65. If in any financial year between 1965-66 and 1969-70, a person manufactures or produces any goods he can be granted a tax credit certificate for an amount calculated at a rate not exceeding twenty-five per cent. of the amount of the duty of excise payable by him on that quantum of the goods cleared by him which exceeds the quantum of the goods cleared by him during the base year. The goods in respect of which a tax credit certificate can be granted and the rate at which the amount of such certificate is to be calculated are specified in the Scheme by the Central Govt.

(3.) THE Act referred to in col. (3) of the Schedule is the Central Excises and Salt Act, 1944.