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2009 Supreme(Gau) 440
IN THE HIGH COURT OF GAUHATI
Iqbal Ahmed Ansari, J.
Herbo Foundation (P.) Ltd.
Vs.
Union of India (UOI) and Ors.
WP (C) Nos. 1707, 2143, 2150, 2211, 2328, 2334, 2335, 2337, 2464, 2465, 2466, 2467, 2481, 2507, 2508, 2510, 2718, 3070, 3724 of 2008, 187, 189, 195 and 1535 of 2009
Decided On: 24.06.2009
Advocate Appeared:
For Appellant/Petitioner/Plaintiff: A.K. Saraf, D. Baruah, M.L. Gope, S. Chetia, Satyen Sarma, Jayanta Deka, Amlan Sarma, Tarun Krishna Bhuyan, R.K. Choudhury, A.K. Gogoi, A. Roy, S. Bhuyan, S.K. Medhi, R.K. Bharali, A. Asiam, S. Shyam, R.B. Deka, M.P. Devnath and D. Sarma, Advs.
For Respondents/Defendant: K.N. Choudhry, Adv., R. Dubey and R. Deka, Asst. Solicitor General of India; Government Advs. G.A., Assam and B. Sarma, Adv.
Headnote:
Central Excise Rules, 1944 - Rule 9 - Central Excise Act - Rules 22, 23, 24, 25 and 26 -Issuance of the impugned notifications - Analysis of cases booked by the Excise department and the representations received from the Industry Associations has revealed that the following modus operand - Respondents alleged that some unscrupulous manufacturers showing bogus production and thereby gaining undue benefit in the form of excise duty exemption and, it was for this reason, that the impugned notifications have been issued without affecting the interest of the genuine manufacturers - Respondents further clarified by reiterating that the genuine manufacturers would continue to receive exemption from payment of excise duty to the same extent as they were entitled to receive and had, in fact, been receiving under the earlier notifications - Respondents claim that the IPR and the notifications, earlier issued there under, all aimed at giving exemption from payment of excise duty to the extent of value addition and not anything beyond and this exemption remains still available with the genuine manufacturers - In this regard, in their affidavit, the Respondents justify - Held, Applicable to the facts of the present case, it needs to be noted, as already discussed above, that the Respondents have not been able to show any supervening public interest, winch could warrant reduction in the quantum of refund of excise duty - Governments basis for showing overriding public interest in withdrawing the promises have also remained as already discussed above, unproved; rather, the stand of the Government is belied and disapproved as already discussed above - Moreover, the Government has not as already held above, taken into account all relevant factors into consideration before reaching the decision to issue the impugned notifications - In such circumstances, Government cannot be freed from the promises, which it had made in the said two industrial policies - Because of what have been discussed and pointed out above, Court hold that the impugned notifications, are not sustainable in law and must, therefore, be set aside and quashed - Petitions disposed of.
I.A. Ansari, J.
1. By this common judgment and order, I propose to dispose of all these writ petitions inasmuch as all these writ petitions, Involving identical facts and having raised same questions of law for determination, have been heard together on the request made by the learned Counsel for the parties.
2. In order to correctly appreciate as to what the grievances of the Petitioners are, what reliefs they have sought for and on what basis, the Respondents resist the writ petitions, certain material facts, not being in dispute, are set out as under:
(i) Taking into account the continuing backwardness of the North-Eastern region, it was felt by the Government of India that a new synergetic incentive package would stimulate development of industries, for, such incentive package would attract Investors. Thus, with a view to fostering industrial growth in North-Eastern region, the then Prime Minister of India made, on 27.10.1996, at Guwahati, a statement that new incentives would be announced for industrial development of the North-Eastern Region. Expert groups/committees were accordingly constituted to controller the initiatives. By a notification, dated 24.12.1997, Government of India, eventually, announced a new Industrial Policy Resolutions ('1997 IPR') containing a package of incentives and concessions for the investors in the North-Eastern region. As a measure of fiscal incentives, Government approved conversion of the growth centers into total tax free zones for a period of fen years. All industrial activities, in these zones, were to be, under the 1997 IPR, free from payment of income tax and excise duty for a period of ten years from the data of commencement of production and the State Governments were to be requested to grant exemptions In respect of sales and municipal taxes. The 1997 IPR also announced that the Ministry of Finance, Government of India, would be moved to amend the existing rules/notifications for giving effect to the decisions embodied in the IPR, Apart from exemption from, inter alia, payment of income tax and excise duty, the 1997 IPR envisaged various other incentives and concessions like capital investment subsidy, interest subsidy, assistance in obtaining term loan as well as working capital, etc.
(ii) In terms of the promises made by the Government of India under the 1997 IPR, various notifications conferring benefits, in tune with the promises made in the 1997 IPR, were issued by various departments of the Central Government. In so far as exemption from payment of central excise duty was concerned, Ministry of Finance, Department of Revenue, Government: of India, brought out notifications No. 32/99-CE and 33/99-CE, both dated 8.7.1999, granting exemption. In respect of certain specified excisable goods from a unit located in the Growth Center or Integrated Infrastructure Development Center or Export Promotion Industrial Park or Industrial Estates or Industrial area or Commercial Estate, as the case may be. The exemption from payment of excise or additional excise duty was to be equivalent to the amount of duty paid by the manufacturer of goods horn the account current maintained under Rule 9 read with Rule 173G of the Central Excise Rules, 1944. The exemption, contained in the said notifications, were made applicable to new industrial units, which commenced their commercial production on or after 24.12.1997. The excise duty exemption, as declared under the said notifications, were also to be applicable to those industrial units, which existed even before 24.12.1997, but which undertook substantial expansion by way of increase in the installed capacity by not less than 25% on or after 24.12.1997. The exemption, contained in the said notifications, were made applicable to the industrial units of such descriptions, as mentioned hereinbefore, for a period of 10 (ten) years from the date of publication of the notification in the official gazette or from the date of commencement of commercial
