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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE NAINAR SUNDARAM
Asia Tobacco Company Limited - Appellant
Versus
Union of India and Others - Respondent
Case No : Writ Petition Nos. 6048 to 6050 of 1984
Decided On : 10 August 1984
CENTRAL EXCISE - NOTIFICATION - EFFECTIVE DATE - NOTIFICATION RESCINDING EXEMPTION - PUBLICATION IN OFFICIAL GAZETTE - DATE OF AVAILABILITY TO PUBLIC - NOTIFICATION EFFECTIVE ONLY FROM DATE OF AVAILABILITY TO PUBLIC - DIFFERENTIAL DUTY COLLECTED FOR PERIOD PRIOR TO DATE OF AVAILABILITY OF NOTIFICATION TO BE REFUNDED.
Fact of the Case:
The petitioner, a company manufacturing cigarettes, was clearing cigarettes at the rates specified in an exemption notification issued under the Central Excise Rules. The Central Government rescinded the exemption notification by a subsequent notification. The petitioner continued to clear cigarettes at the concessional rates till it received a communication from the Superintendent of Central Excise informing it about the withdrawal of the exemption. The petitioner paid the differential duty under protest and filed writ petitions challenging the withdrawal notification and seeking refund of the differential duty collected.
Finding of the Court:
The court held that the withdrawal notification was not effective until it was made available to the public by being placed on sale. The mere printing of the notification in the Official Gazette was not sufficient to make it effective. The court also held that the differential duty collected for the period prior to the date of availability of the notification to the public was illegal and had to be refunded.
Issues: 1. Whether the withdrawal notification was effective from the date it was printed in the Official Gazette or from the date it was made available to the public? 2. Whether the differential duty collected for the period prior to the date of availability of the notification to the public was legal.
Ratio Decidendi: 1. The court held that the withdrawal notification was not effective until it was made available to the public by being placed on sale. The mere printing of the notification in the Official Gazette was not sufficient to make it effective. The court relied on several judgments of various High Courts which had held that a notification is effective only from the date it is made available to the public. 2. The court held that the differential duty collected for the period prior to the date of availability of the notification to the public was illegal and had to be refunded. The court held that the levy and collection of duty were the result of misconception in law and, if so applied, there could not be any time bar.
Final Decision: The court allowed the writ petitions, declared that the withdrawal notification was effective only from the date it was made available to the public, and directed the respondents to refund the differential duty collected for the period prior to the date of availability of the notification to the public.
The petitioner in these three writ petitions is one and the same. It is a Company incorporated under the Companies Act, 1956. The petitioner manufactures cigarettes in its factory at Hosur, Dharmapuri District. The petitioner claims that it manufactures cigarettes for itself and for M/s. I.T.C. Limited. Cigarettes are subject to levy of excise duty under Tariff Item 4(11) (2) of the Central Excise Tariff, under manufactured tobacco. There was a partial exemption Notification 30/79 of Central Excise, dated 1-3-1979, hereinafter referred to as the Exemption Notification and the said notification, with its amendments by Notification Nos. 140/79-C.E. dated 30-3-1979 and 25/81-C.E., dated 1-3-1981, issued under sub-rule (1) of rule 8 of the Central Excise Rules, 1944, hereinafter referred to as the Rules, reads as follows :
"Partial Exemption to Cigarettes :
In exercise of the powers conferred by sub-ruled(1) of rule 8 of the Central Excise Rules, 1944, read with sub-Section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) (hereinafter referred to as the Additional Duties of Excise Act) the Central Government hereby exempts cigarettes of the description specified in column (1) of the Table hereto .annexed and falling under sub-item 11(2) of Item No. 4 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the Central Excise Act) from so much of the duty of excise leviable thereon both under the Central Excise Act and the Additional Duties of Excise Act, as is in excess of the duty specified in the corresponding entry in column (2) thereof.
Provided that the amount of duly so levied shall be apportioned in the ratio of 72.5 : 27.5 between the duty leviable under the Central Excise Act and the Additional Duties of Excise Act respectively.(Notification No. 30/79-C.E., dated 1-3-1979 as amended by Notification No. 140/79-C.E., dated 30-3-1979 and No. 25/81-C.E., dated 1-3-1981).'
The petitioner claims, and there is no denial of the same by the respondents, that it was clearing cigarettes manufactured for itself and for M/s. I.T.C. Limited at the rates specified in the Exemption Notification, depending on the assessable value. The Central Government, by Notification 284/82-C.E., dated 10-11-1982, hereinafter referred to as the withdrawal Notification, rescinded the Exemption Notification pursuant to the powers under sub-rule (1) of rule 8 of the Rules. The Withdrawal Notification reads as follows :
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, the 30th November, 1982
NOTIFICATION
No. 284/82-Central Excises." *
G.S.R. 728(E). - In exercise of the powers conferred by sub-Rule (1) of rule 8 of the Central Excise Rules, 1944 read with sub-Section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) the Central Government hereby rescinds the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 30/79-Central Excises, dated the 1st March, 1979
(F. No. 349/2/82-TRU)
J.K. BATRA, Under Secy.
On 6-12-1982, the third respondent addressed a letter to the petitioner as follows :
OFFICE OF THE SUPERINTENDENT OF CENTRAL EXCISE HOSUR III RANGE, HOSUR
O.C. No. 1554/82 Dated 6-12-1982
To
M/s. Asia Tobacco Company Limited,
Sipcot Industrial Complex,
Hosur.
Gentlemen,
Subject : Central Excise Cigarettes-.Issue of Notification No. 284/82-Central Excise, dated 30-11-1982-Differential Duty of the cigarettes cleared with effect from 30-11-1982-Demands issued-Regarding :
"You are hereby informed that Notification No. 30/79, dated 1-3-1979 prescribing concessional rate of duty for Cigarettes has been rescinded by Notification No. 284/82-Central Excise, dated 30-11-1982 consequently the clearances of cigarettes effected from 30-11-1982 based on the assessable value claimed in your price list dated 12-11-1982 on provisional basis would have been cleared on tariff rates
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