Meghalaya High Court
M/S Rnb Carbides & Ferro vs The Union Of India & Ors. on 22 October, 2018
Bench: Mohammad Yaqoob Mir, S.R. Sen
Serial Nos. 06 to 29 HIGH COURT OF MEGHALAYA
Regular List AT SHILLONG
Date of order: 22.10.2018
___________________________________________________________
1. WP(C) No. 9 of 2015 with
MC[WP(C)] No. 8 of 2015
M/S RNB Carbides & Ferro Vs The Union of India & Ors.
Alloys Pvt. Ltd.
Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with
Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG
2. WP(C) No. 16 of 2014 M/S Shree Sai Smelters Vs. The Union of India & Ors. (India) Pvt. Ltd.
Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 3. WP(C) No. 17 of 2014 M/S Shree Sai Rolling Mills Vs. The Union of India & Ors. (India) Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 4. WP(C) No. 18 of 2014 M/S Shree Sai Prakash Vs. The Union of India & Ors. Alloys Pvt. Ltd.
Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 1
5. WP(C) No. 19 of 2014 with WP(C) No. 21 of 2014 M/S Byrnihat Ispat Pvt. Ltd. Vs. The Union of India & Ors.
Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 6. WP(C) No. 20 of 2014 M/S Satya Megha Ispat Pvt. Ltd. Vs. The Union of India & Ors. Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG
7. WP(C) No. 23 of 2015 with MC [WP(C)] No. 22 of 2015 M/S York Print Pvt. Ltd. Vs. The Union of India & Ors.
Appearance:
For the Petitioner/Appellant(s) : Dr. B.P. Todi, Sr. Adv. with Dr. Ankit Todi, Adv.
Ms. Pooja Agarwal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 8. WP(C) No. 40 of 2016 M/S H.M. Cements Ltd. Vs. The Union of India & Ors. Appearance:
For the Petitioner/Appellant(s) : Dr. B.P. Todi, Sr. Adv. with Dr. Ankit Todi, Adv.
Ms. Pooja Agarwal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 9. WP(C) No. 71 of 2016 M/S K.K. Beverages Pvt. Ltd. Vs. The Union of India & Ors. Appearance:
For the Petitioner/Appellant(s) : Dr. B.P. Todi, Sr. Adv. with Dr. Ankit Todi, Adv.
Ms. Pooja Agarwal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 2
10. WP(C) No. 90 of 2016 with MC [WP(C)] No. 49 of 2016 M/S RNB Cement Pvt. Ltd. Vs. The Union of India & Ors.
Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG
11. WP(C) No. 123 of 2008 with MC[WP(C)] No. 181 of 2008 MC[WP(C)] No. 235 of 2008 Shyam Century Ferrous Vs. The Union of India & Ors.
Appearance:
For the Petitioner/Appellant(s) : Dr. A. Saraf, Sr. Adv. with Mr. S.P. Sharma, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG
12. WP(C) No. 124 of 2008 with MC[WP(C)] No. 182 of 2008 MC[WP(C)] No. 236 of 2008 Cement Manufacturing Vs. The Union of India & Ors.
Company Ltd.
Appearance:
For the Petitioner/Appellant(s) : Dr. A. Saraf, Sr. Adv. with Mr. S.P. Sharma, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG
13. WP(C) No. 126 of 2008 with MC [WP(C)] No. 184 of 2008 MC[WP(C)] No. 238 of 2008 Megha Technical & Engineers Vs. The Union of India & Ors.
Pvt. Ltd.
Appearance:
For the Petitioner/Appellant(s) : Dr. A. Saraf, Sr. Adv. with Mr. S.P. Sharma, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 3
14. WP(C) No. 133 of 2008 with MC[WP(C)] No. 204 of 2008 Meghalaya Cements Ltd. Vs. The Union of India & Ors.
Appearance:
For the Petitioner/Appellant(s) : Dr. A. Saraf, Sr. Adv. with Mr. S.P. Sharma, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 15. WP(C) No. 203 of 2012 Colortek Pvt. Ltd. Vs. The Union of India & Ors. Appearance:
For the Petitioner/Appellant(s) : Mr. S. Dutta, Adv. For the Respondent(s) : Mr. S.C. Keyal, ASG 16. WP(C) No. 86 of 2013 M/S Khasi Alloys Pvt. Ltd. Vs. The Union of India & Ors. Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 17. WP(C) No. 87 of 2013 M/S JUD Cements Ltd. Vs. The Union of India & Ors. Appearance:
For the Petitioner/Appellant(s) : Dr. A. Saraf, Sr. Adv. with Mr. S.P. Sharma, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 18. WP(C) No. 88 of 2013 M/S Hills Cement Company Ltd. Vs. The Union of India & Ors. Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 4
19. WP(C) No. 94 of 2013 with MC[WP(C)] No. 137 of 2013 M/S Nezone Alloys Ltd. Vs. The Union of India & Ors.
Appearance:
For the Petitioner/Appellant(s) : Mr. G.N. Sahewalla, Sr. Adv. with Mr. S. Jindal, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG
20. WP(C) No. 117 of 2013 with WP(C) No. 118 of 2013 Meghalaya Carbide & Vs. The Union of India & Ors.
Chemical Pvt. Ltd.
M/S Maithan Smelters Ltd. Vs. The Union of India & Ors. Appearance:
For the Petitioner/Appellant(s) : Mr. A. Saraf, Adv. For the Respondent(s) : Mr. S.C. Keyal, ASG
21. WP(C) No.385 of 2013 with MC[WP(C)] No. 416 of 2013 M/S RNB Carbides & Ferro Vs. The Union of India & Ors.
Alloys (P) Ltd. Unit II Appearance:
For the Petitioner/Appellant(s) : Mrs. R. Dutta, Adv.
Vice Mr. S. Thapa, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG
22. WP(C) No. 386 of 2013 with MC[WP(C)] No. 418 of 2013 M/S RKB Cements Pvt. Ltd. Vs. The Union of India & Ors.
Appearance:
For the Petitioner/Appellant(s) : Mrs. R. Dutta, Adv.
Vice Mr. S. Thapa, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG
23. WP(C) No. 387 of 2013 with MC[WP(C)] No. 419 of 2013 M/S RNB Carbides & Ferro Vs. The Union of India & Ors.
Alloys (P) Ltd. Unit I Appearance:
For the Petitioner/Appellant(s) : Mrs. R. Dutta, Adv.
Vice Mr. S. Thapa, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG 5
24. WP(C) No. 388 of 2013 with MC[WP(C)] No. 417 of 2013 M/S Pioneer Carbide Pvt. Ltd. Vs. The Union of India & Ors.
Appearance:
For the Petitioner/Appellant(s) : Mrs. R. Dutta, Adv.
Vice Mr. S. Thapa, Adv.
For the Respondent(s) : Mr. S.C. Keyal, ASG ___________________________________________________________ Coram:
Hon'ble Mr. Justice Mohammad Yaqoob Mir, Chief Justice Hon'ble Mr. Justice S.R. Sen, Judge ___________________________________________________________
i) Whether approved for reporting in Yes/No Law journals etc.:
ii) Whether approved for publication in press: Yes/No ______________________________________________________ Per Mohammad Yaqoob Mir, 'CJ': ORAL
1. In these batch of petitions, issues for determination in essence are identical so are taken up together for disposal.
2. Notifications No.17/2008-Central Excise dated 27.03.2008 and No. 31/2008-Central Excise dated 10.06.2008 issued by the Government of India, Ministry of Finance (Department of Revenue) are sought to be quashed.
3. Pursuant to the new industrial policy for North Eastern Region dated 24.12.1997, vide notification No.32 dated 08.07.1999, in exercise of powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, 100% excise duty exemption was for a period not exceeding ten years from the date of publication of the notification in the Official Gazette or from the date of commencement of commercial production whichever is later.
4. Vide impugned notification No.17/2008-Central Excise dated 27.03.2008, Notification No.32/1999 dated 08.07.1999 has been amended and 100% excise duty exemption has been reduced in case of the 6 petitioners to 39% as is mentioned in the impugned notification.
Similarly, vide notification No.31/2008-Central Excise dated 10.06.2008, notification No.32/1999-Central Excise dated 08.07.1999 has been further amended vis-à-vis item No.8 of the table in the column descriptions the words other than iron ore has been added to "all goods" The amendment introduced by the said two impugned notifications according to the petitioners are illegal and offend not only object of the new industrial policy introduced in North Eastern Region but also is hit by the principle of promissory estoppel.
5. It is stated that acting on the promises, assurances and undertaking made by the respondents, the petitioners-companies had invested huge amount in setting up industrial units. Therefore, they cannot be deprived of 100% excise duty exemption for a period of ten years from the date of commencement of commercial production of their units.
6. Perusal of the record reveals that in view of the industrial backwardness of the North Eastern Region, the Government of India for attracting the investors with an object and purpose of establishing industrial units, so as to bring capital investment, employment opportunities and overall growth to various sectors, introduced incentives package to stimulate development of industries i.e. how Industrial Policy Resolution (IPR) was notified on 24.12.1997. In terms of the said policy, export promotion zones, industrial parks, industrial estates and industrial areas were designated as tax free zones. Amongst other fiscal benefits, various tax exemptions and concessions were provided to the new industries or existing units provided they undertake expansion in their installed capacity within such zones. The period of exemption is ten years from the date of commencement of commercial production. In the same background, notification No.32/1999-Central Excise dated 08.07.1999 was issued granting exemption in respect of all excisable goods specified in the schedule to the notification. Under the said notification, new industrial units existing have undertaken substantial expansion by way of 7 increase in installed capacity who subject to fulfilment of the conditions would be granted benefit of complete exemption from central excise duty for a period of ten years from the date of commencement of commercial production. With the changes in circumstances from time to time, original notification No.32/1999 was amended vide notification No.65/2003 dated 06.08.2003 then again on 01.04.2007, North-East Industrial and Investment Promotion Policy (NEIIPP), 2007 was notified and 100% excise duty exemption was directed to continue.
7. Precisely for industrial development so as to bring North-East out of the industrial backwardness, investors were extended exemptions/concessions. Now, withdrawal of exemption by reducing the percentage according to the petitioners is not in keeping with the object of the industrial policy, in effect, amount to backtracking aimed at depriving the investors from the benefits of exemptions/concessions extended. The impugned notification reducing excise duty exemption already stands quashed by the Gauhati High Court while allowing batch of writ petitions. The judgment rendered in the writ petitions was assailed by the Union of India by medium of Writ Appeals Nos.230 and 243 of 2009 before the Gauhati High Court unsuccessfully as the appeals were dismissed and it was directed that all the industries set up pursuant to the policy of 1997 and 2007 shall continue to enjoy the benefits of full exemption as per the policy and notifications. The judgment dated 20.11.2014 rendered in the writ appeals captioned "Union of India & ors v. Kamakhya Cosmetics & Pharmaceuticals & ors" has been assailed before the Hon'ble Apex Court by medium of Special Leave to Appeal (C) No.(s)11878 of 2015, which is pending.
8. Respondents in their counter affidavit have stated that the respondents are within their power in terms of sub-section (4) of Section 5A of the Central Excise Act, 1944 to amend, vary, rescind or supersede any notification issued under sub-section (4) of Section 5A. Therefore, the 8 impugned notifications have been issued within frame work of law and in public interest.
9. During the course of arguments, learned counsel for the petitioners projected that the Gauhati High Court as well as the High Court of Gujarat have already quashed the impugned notifications. The judgment passed by the Gauhati High Court squarely covers the cases of the petitioners.
10. Learned counsel for the respondents would submit that as a matter of fact, the impugned notifications have been quashed by the Gauhati High Court as well as by the High Court of Gujarat but SLPs are pending. The Hon'ble Apex Court in the Special Leave to Appeal (C) No.(s)11878 of 2015 arising out of judgment dated 20.11.2014 in WA No.243 of 2009 passed by the High Court of Gauhati while considering I.A. No.3 of 2015 has directed that subject to the release of 50% of the amount due to the respondents in terms of the impugned judgment on furnishing solvent surety to the satisfaction of the jurisdictional commissioner, the operation of the impugned judgment shall remain stayed, same order has been complied with not only vis-à-vis the respondents in the SLPs before the Supreme Court but vis-à-vis all eligible unit holders including the petitioners herein. Therefore, whatever will be the final outcome of the SLPs from the Hon'ble Apex Court same will govern the petitioners herein also.
11. It is agreed to by the learned counsel for the parties that issues for determination in these petitions are identical to one as were the issues before the Gauhati High Court. Line of attack and defence is similar therefore, whatever will be the outcome of the SLP same will apply to all the unit holders claiming benefits of 100% excise duty exemption in accordance with the notification No.32/1999 dated 08.07.1999.
12. It shall be advantageous to quote as to what the Hon'ble Supreme Court has directed on 07.12.2015 while disposing of I.A. No.3 of 2015 in Special Leave to Appeal (C) No.(s)11878 of 2015 titled "Union of India & ors v. M/s Kamakhya Cosmetics & Pharmaceuticals & ors":-
9"Heard.
Pending further orders, we direct that subject to the petitioners releasing 50% of the amount due to the respondents in terms of the impugned judgment on the respondents' furnishing solvent surety to the satisfaction of the jurisdictional commissioner, the operation of the impugned judgment shall remain stayed. We further direct that contempt proceedings initiated against the petitioners shall subject to their releasing 50% of the amount as stated above remain stayed.
The needful shall be done within four weeks from today. I.A. No.3 of 2015 is accordingly allowed and disposed of."
13. Learned counsel for the respondents was fair enough to state in unequivocal terms that the afore quoted directions have been applied to all unit holders who were availing benefits or had to avail benefits under the notification No.32/1999 dated 08.07.1999 and whatever will be the outcome of the SLPs same will not only apply to the respondents (writ petitioners) before the Supreme Court but will also apply to all similarly situated unit holders as well as the petitioners herein.
14. In short, in view of the submissions made, the cases of the petitioners have to be governed in terms of the judgment of the Gauhati High Court and the interim order passed by the Hon'ble Apex Court as already quoted above. Both learned counsel for the parties agreed that interim direction as issued or may be issued during pendency of SLP and then final judgment as may be passed by the Hon'ble Apex Court will also be applied to the petitioners herein.
15. For the stated reasons, circumstances and submissions of the learned counsel for the parties all these writ petitions are allowed, the impugned notifications No.17/2008-Central Excise dated 27.03.2008 and No.31/2008-Cetral Excise dated 10.06.2008, which are already set aside by the Gauhati High Court while allowing batch of writ petitions and then upheld while dismissing WA Nos.230 and 243 of 2009, shall also stand set aside vis-à-vis petitioners herein. However, same shall be subject to the interim direction and final decision of the Hon'ble Apex Court in SLP No.11878 of 2015.
1016. All these petitions shall stand disposed of as above along with the connected misc. cases.
(S.R. Sen) (Mohammad Yaqoob Mir)
Judge Chief Justice
Meghalaya
22.10.2018
"Lam AR-PS"
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