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2024 Supreme(Mad) 1938
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ANITA SUMANTH, G. ARUL MURUGAN, JJ.
M/s.Worth Plastics A Unit of Worth Trust - Appellant
Versus
Ministry Of Social Justice and Empowerment - Respondent
W.P.Nos.28369, 15326 of 2011, 529 of 2017, 13847, 13848 of 2010 and 12678 of 2012 and W.M.P.No.556, 557 of 2017and M.P.Nos.1,1,2 and 2 of 2011, 1 and 2 of 2012 and 1 of 2010
Decided on : 22-11-2024
Advocate Appeared:
For the Appellant : Mr.S.Jaikumar
For the Respondents: Mr.K.Srinivasamurthy, Mr.Rajendran Raghavan
The court ruled that the denial of excise duty exemption based on flawed interpretations of the Notification and the requirement for financial assistance from the Ministry was unjustified, as the petitioner met all necessary conditions.
Headnote:(A) Constitution of India - Article 226 - Central Excise Act, 1944 - Notification No. 63/95-CE dated 16.03.1995 - Writ of Certiorarified Mandamus sought to quash the order denying exemption from excise duty - Petitioner, a charitable trust, engaged in rehabilitation of disabled persons, claimed exemption but faced denial due to non-issuance of required certificates - Court found that the petitioner satisfied the conditions of the Notification and that the denial was based on flawed reasoning regarding expenditure and financial assistance - The court quashed the impugned orders and allowed the writ petitions. (Paras 30 and 31)
(B) Exemption - Conditions for exemption under Notification No. 63/95-CE - The court held that the requirement for financial assistance from the Ministry is onerous and not applicable in the present case, as the petitioner had made timely applications without response from the Ministry. (Paras 26 and 29)
Facts of the case:
The petitioner, a charitable trust, sought exemption from excise duty under Notification No. 63/95-CE, claiming to have met all conditions for the years 2008-09 to 2010-11. The authorities denied the exemption citing lack of required certificates and insufficient expenditure on rehabilitation.
Findings of Court:
The court found that the petitioner had employed primarily disabled persons and had incurred significant expenditure on rehabilitation, thus satisfying the conditions for exemption. The denial of exemption was based on incorrect interpretations of the Notification.
Issues: The main issues were whether the petitioner met the conditions for exemption under the Notification and the validity of the requirement for financial assistance from the Ministry.
Ratio Decidendi: The court ruled that the conditions for exemption must be interpreted in light of the charitable objectives of the petitioner, and that the denial based on financial assistance was unjustified given the circumstances.
Result: All impugned orders quashed and writ petitions allowed.
ORDER :
(Order of the Court was made by Dr. ANITA SUMANTH, J)
Prayer: PETITION filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus to call for the records of the impugned order bearing reference No. 16-40/2001-DD III dt 5.8.2011 passed by the 2nd respondent and quash the same and direct the 2nd respondent and any other officer of the 1st respondent competent to issue the certificate contemplated under Sl. 17 (iv) of Notification No. 63/95-CE dated 16.3.1995 to the petitioner for year 2008-09 and for the succeeding years.
This Common order is passed disposing 6 Writ Petitions filed by Worth Plastics. The petitioner is represented by Mr.S.Jaikumar, learned counsel, R1 & R2, Secretary and Deputy Secretary Ministry of Social Justice and Empowerment are represented by Mr.K.Srinivasamurthy, learned Senior Panel Counsel and R3, Commissioner of Central Excise is represented by Mr.Rajendran Raghavan, learned Senior Standing Counsel. We have heard all learned counsel in detail.
2. The submissions of the petitioner are as follows:
i. The petitioner claims to be an entity set up for the charitable purpose of providing an avenue of rehabilitation for mentally, physically, cognitively and intellectually disabled persons.
ii. The petitioner was constituted under a Deed of Trust dated 25.08.1969 which sets out the entire history to its constituents and our attention is drawn to the persons who constituted the first Board of Trustees. Under compilation dated 20.11.2024 the details of the present trustees who run the organisation have also been furnished.
iii. The objects of the Trust provide for various measures by which the educational and charitable requirements of the society are achieved.
iv. The primary object for which the Trust was started was for training and employing ex-leprosy patients with the disease arrested as well as other physically handicapped persons in various profitable ventures.
v. The Trust has been carrying on yeoman activities ever since then.
vi. A notification bearing No.63/1995-CE dated 16.03.1995 (in short ‘Notification’) was issued by the respondent which provided for an exemption from excise duty as well as additional duty on various goods specified in Serial No.1 of the Notification upon satisfaction of stipulated conditions.
vii. The conditions required that the goods must be manufactured by an institution which is a) primarily engaged in the rehabilitation of physically or mentally handicapped persons, b) employs primarily, physically or mentally handicapped persons for its manufacturing activity, c) receives financial assistance from the Ministry of Welfare, Government of India for such rehabilitation, and d) produces a certificate once in a financial year from an officer in the Ministry of Welfare not below the rank of Deputy Secretary to the Government of India, to the effect that it satisfies the conditions mentioned in clauses (a) to (c) above.
viii. Till the year 2008-09, the petitioner had been in receipt of certificates in accordance with the stipulations under the Notification.
ix. For the first time in regard to the period April 2008 to November 2008, the petitioner faced a difficulty as it had not received the certificate from the concerned authority despite its application having been made in time.
x. Show cause notices were issued by the concerned authorities proposing to levy excise duty on goods manufactured by it, in the absence of the requisite certificate.
xi. Despite reminders to the authorities from the petitioner seeking the certificate, the certificate was not issued, and an Order-in-original hence came to be passed on 31.03.2010 levying duty as well as imposing penalty.
xii. W.P.No.13847 of 2010 has been filed praying for Writ of Certiorari calling for and quashing Order-in–original dated 31.03.2010.
xiii. This was followed by a show cause notice for the periods December, 2008 to March, 2010 and April, 2010 to March 2011 along identical lines f
