Bombay High Court
Zenith Tin Works Private Limited vs K.K. Verma And Ors. on 1 January, 1800
Equivalent citations: 1979(4)ELT618(BOM)
JUDGMENT
1. The petitioner is a Private Limited Company and carries on busines, interalia, of manufactureing Aluminium Collapsible Tubes by extrusion process. The petitioner was manufactureing aluminium collapsible tubes from slugs and flat bars which come in the from rectangular thick sheets and sometimes are referred to as sheets.
2. On April 3, 1965, the 5th respondetn-the Union of India-issued a notification under Central Excise Rules 8(1) whereny extruded sheets and sections sluminium were exempted from payment of so much of the duty of excise leviable under item (d) of Item No. 27 of the first Schedules to the Central Excises and Salt Act, 1944 as is equivalent to the duty already paid on th ealuminium in crude from or on the aluminium maujfactureers under sub-items(a) or (b) of Item No. 27. The procedure required to be followed for obtaining the exemption under this notification was to file an application under Rule 56A of the Cenrtral Excise Rules, 1944 read with Trade Notice No. 136-A (MP)/ALLUMINIUM (3) 31965 issued by the Bombay Central Excise Collectorate on August 25, 1965. The petitioner accordingly filed an application seeking premission under Rule 56-Aon September 8, 1965. By this application, the exemption was sought in respect of the aluminium which falls under sub-item (a) and sub-item (b) of Item No. 27 of First Schedule of the Central Excise and salt Act. The application filed by the petitioner was granted by an order dated September 15, 1965 with effect from September 8, 1965, the date on which application was filed. Subsequently, the permission granted was made applicable with effect from April 3, 1965 i.e. the date on which the notification granting exemption came into force. In pursuance of the permission granted, th epetiitoner imported the aluminium slug and the sheet in the Factory and after manufacturing the aluminium collapsible tubes sent it out of the Factory from time to time. It appears from a specimen notice which is annexed as Ex. D to the petition that particlars furnished by the petitioner to the Inspector of Central Excise while taking out the manufactured goods from the Factorey were "Aluminium Extruded Flat Bars", The petitioner made a declaration that the goods inported in the Factory were covered by the permission granted under Rule 56A of the Central Excise Rules. The representation made by the petiitoner was accepted by the Inspector of Central Excise. Accordingly, the goods were imported from time to time betweenMay, 1966 to Faburary 24, 1968.
3. On January 28, 1968, the Inspector of Customs and Centrak Excise addressed a letter to th epetiitoner informing that the p[ermission granted to the petitioner under rule 56-A was specificallly for the raw materials which has paid duty inder sub-item (a) and (b) of Item No. 27 of the Central Excise Tariff. The petitioner was informed that the Audit report indicates that the items of aluminium i.e. aluminium flat bars falling under sub-item (d) of Tariff Item No. 27 were also imported. the petitionmer was informed that to regularise the matter, they should make an application for permission to bring the product under sub-item (d) of Tariff Item No. 27. As per this notice, the petitioner did aply for a permission to import items covered under sub-item(d)of itsm No. 27 of the Tariff on Fabruary 24, 1968. The Assistant Collector of Centrla Excise, Bombay granted the application by his order dated September 2, 1968 but directed that the permission so granted would be applicable in respect of the gods received after the date of the order.
4. The order passed by the Assistnat Collector was challenged by the petitioner inappeal before the Collector of Central Excise, Bombay and the grievance of the opetitioner was that permission should have been granted not from the date of the order i.e. September 2, 1968 but from the date of the notification dated April 3, 1965. The appeal ended in dismissal ans the petitioner carried futher a revision before the Government of India. The Government of India partially allowed the revision application by order dated May 21, 1973 derecting that the petitioner is granted permission under Rule 56-A of the Centrla Excise Rules from the date of their application instead of from the date of the order of the Assistant Collector. In pursuance of the orders passed by the Authorities below, the Superintendednt of Central Excise, Range-II, Bomaby issued a notice of demand to th epetitioner calling upon the petitioner to pay an amount of Rs 85491. 94 which was short-levied and the demand notice was served upon the petitioner on August 28, 1973. The petitioner has filed the present proceedings under Articles 226 of the Constitution of the India to challenge the validity and legality ot the order passed by the Government of India on May 21, 1973 by the Superintendet of Central Excise, Range-II, Bomaby.
5. In support of the petition, Mr. Mody, the learned counsel, has raised two contentions. It was urged that the action of Government of India in granting exemption in respect of th egoods covered under sub- item (d) of Tariff Item No. 27 only from the date of tghe application i.e. February 24, 1968 is illegal and irrational. According to the learned counsel, the permission should have been granted not from the date of the application but from th edate whent the notification came into force i.e. April 3, 1965. there is no merit in this contention. It was urged by th elearned counsel that it was the policy of the Government to grant exemption in respect of the items covered under sub-item (d) of Tariff Item No. 27from the date of the notifiaction and the advatage of this notifiaction should not be denied to th epetitioner solely on the ground that the application was not filed till February 24, 1968. It was contended that the petitioner has acted bona fide and was under the impression that the goods covered under sub-item (d) were, in fact exempted because of the permission granted earlier on September 19, 1965. the submission of the learned counsel cannot be entertained as it cannot be assured that the policy of the Government was to exempt the goods covered under sub-item (d) of Tariff Item No. 27 as soon as the notifiaction was published. It was necessary under this notification for the importer to make an application under Rule 56-A of the Central Excise rules and that rule provides the procedure to be followed while granteing the premission to the importer. The publication of the notification in itself does not confer an absolute right to importer to import that the goods covered under sub-item (d) of Tariff Item No. 27 but a fuether application and permission from a proper Officer was necessary before the goods were imported. Apart from this, ther is no absolute right in a partu to claim that exemption should be granted from the date of the notifiaction even through it was not applied for. In my judgment, th egovernment has acted very rationally in granting the permission, and the petitioer would not be entitled to any relief in this connection.
6. In the result, the petiiton fails and the rule is discahrged with no order as to costs. As this stage, Mr. Mody,the learned counsel for the petitioner, requests that the order should be stayed for a period of 8 weeks to enable him to file an appeal. The prayeer is rejected. The petitioner has furnished Bank guarantee at the time of grant of interim relief. The deparment is entitled to proceed ans recover the amounet out of this Bank guatantee.