The utilisation of accumulated credit under the old Notification No. 27/87 and the subsequent Notification No. 45/89 will be subject to the upper limit of Rs. 1000/- per metric tonne of finished product cleared at the factory gate and not more.

R.V. Raveendran J.--The Union of India and officers of Central Excise Department, functioning under the Central Excises and Salt Act, 1944 have brought in challenge in the present appeal an order dated 26-10- 1990 passed by the learned Single Judge in Writ Petition No. 18534 of 1989 moved by respondents herein before the learned Single Judge. By the impugned order, the learned Judge has allowed the petition and directed the appellants to permit to writ petitioners to utilise the accumulated credit claimed in Annexure-C to the petition subject to verification as to the correctness of the amount. The learned Judge has further observed that the writ petitioners will be entitled to accumulated credit under the earlier Notification No. 27/87 and in addition, they will be entitled to further benefit available under the subsequent Notification No. 45/89 as available to manufacturers of vegetable products under the said notification.

2. In order to appreciate the grievance of the appellant-authorities, it is necessary to note a few relevant facts leading of these proceedings.

3. The first respondent is a Public Limited Company incorporated under the Companies Act, 1956 which is engaged in the manufacture of vegetable products (Vanaspati). The second respondent - original second petitioner is a share-holder of the original first petitioner Company. It is the case of the respondents original writ petitioners that Vanaspathi Manufactured from raw oils is subjected to various processes before latter can be converted into Vanaspathi. That under Section 3 of the Central Excise Act, the final product Vanaspathi manufactured by the respondents is excisable. That at the relevant time, for the excise duty leviable from 1st March, 1987 the appellant authorities inserted Rule 57K to 57P in the Central Excise Rules, 1944. They were inserted under a new Section AAA in Chapter V. It dealt with credit of money in respect of certain materials used in the manufacture of certain excisable goods. The case of the respondents is that in excises of the powers conferred by Rule 57K, the Central Government issued a notification being Notification No. 27/87 on 1-3- 1987 permitting the manufacturers of Vanaspathi who utilised as input the specified fixed vegetable oils mentioned in column (2) of the Table appended to the notification, grant of certain credit and utilisation thereof at the rates mentioned in the corresponding entry in Column (3) of the said Table. It is the case of the respondents that because they manufactured Vanaspathi being the final product wherein as input they utilised fixed vegetable oils like Rice bran oil and Mahuwa oil being minor raw oils, they become entitled to earn credit as per the said notification. During the currency of the said notification from various such credit amounts earned by them, under the scheme of the notification, for every tonne of vegetable product cleared at the factory gate which attracted excise duty of Rs. 1900/- Rs. 1,000/- could be utilised by the respondents out of the accumulated credit under the notification and for that purpose necessary debit entry could be made in the credit account while balance of Rs. 900/- was to be paid per tonne in cash as per the said notification. The said Notification No. 27/87 was rescinded by the Central Government by the Notification No. 39/89 dated 15-8-1989. However, another notification of similar nature was issued on 11-10- 1989 being Notification No. 45/89. On account of rescission of Notification No. 27/87, the appellant authorities insisted that the balance of credit which had accumulated in favour of the respondents during the currency of the earlier Notification No. 27/87 got wiped off with effect from 25-8-1989 and therefore, for future clearances of every tonne of Vanaspathi, the respondents had to pay excise duty at the rate of Rs. 1900/- without debiting the duty of RG-23B, Part II account. This brought the respondents original writ petitioners to this