TMI Blog2011 (8) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... hi, Advs. for the Petitioner/Appellant B. K. Gupta, Vipul Sharma, H. M. Bhatia and Arvind Vashisht, Advs. for the Respondent JUDGEMENT Tarun Agarwala, J:- 1. The Division Bench finding itself unable to agree with the decision of another Co-ordinate Bench has referred the matter to a Larger Bench and that is how the matter has come up before us. 2. The brief facts leading to the filing of the writ petition is, that the Government of India, Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) issued a New Industrial Policy dated 7th January, 2003 providing fiscal incentives to new industrial units and to existing units on their substantial expansion. Clause 3.1 of the Policy provided the following package, namely:- Clause 3.1 Fiscal Incentives to new Industrial Units and to existing units on their substantial expansion:- (I) New Industrial units and existing industrial units on their substantial expansion as defined, set up in Growth Centres, Industrial Infrastructure Development Centres (IID Cs), Industrial Estates, Export Processing Zones, Theme, Parks (Food Processing Parks, Software Technology Parks, etc.) as stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, 2003, the State Industrial Development Corporation of Uttaranchal (SIDCUL) was notified as the nodal agency for the State of Uttaranchal for routing the said subsidies/incentives under the New Industrial Policy. 5. Pursuant to the aforesaid policy, the Central Government, in public interest, issued a Notification No.50/2003 dated 10th June, 2003 under Section 5A of the Central Excise Act, 1944 granting exemption of Excise Duty on certain kinds of goods cleared from a unit located in an area specified in Annexure-II. The relevant extract of the Notification No. 50/2003 dated 10* June, 2003 is quoted hereunder:- G.S.R.(E):- In exercise of the powers conferred by Sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944) read with Sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and Sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the First Schedule and the Second Schedule to the Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iser falling under Central Excise Tariff Heading 2706.90. In order to take advantage of the Policy of the Central Government dated 7th January, 2003 and the notification dated 10th June, 2003, the Petitioner informed the Deputy Commissioner, Customs and Central Excise, Dehradun vide letter dated 11th February, 2004 about their intention to set up a new manufacturing unit at Khasra No. 54 in village Behedeki, Tehsil Roorkee in District Haridwar. 9. As per Annexure-I to the policy dated 7th January, 2003 and Annexure-II to the notification dated 10th June, 2003, the Petitioner's unit was located in the Khasra, Tehsil and village in the District of Haridwar and, after setting up the unit and, upon commencing commercial production, the Petitioner filed a declaration with the Deputy Commissioner, Customs and Central Excise vide letter dated 19th November, 2004 in order to claim incentives as provided in the notification dated 10th June, 2003. 10. It transpires that the Deputy Commissioner, Central Excise wrote a letter dated 21st February, 2005 to the Managing Director of State Industrial Development Corporation of Uttarakhand (SIDCUL), which is the Nodal Agency for routing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y dated 7th January, 2003 and the notification dated 10th June, 2003, the Petitioner established a new industrial unit in the area specified in Annexure-II and was entitled for central excise exemption on the goods cleared from its unit. The Petitioner further submitted that no further notification was required and the Petitioner was entitled for the exemption under the Notification No. 50/2003 dated 10th June, 2003. The contention of the Petitioner that the categorization made in Annexure-II under District Haridwar would make no difference since the notification dated 10th June, 2003 did not make any such distinction between a new unit and an existing unit and that the exemption under the said notification as specified in Anneuxre-II was applicable not only to new industrial units, but also to the existing units which had undertaken a substantial expansion. It was further submitted that the refusal to grant exemption by the Deputy Commissioner was patently illegal and against the notification dated 10th June, 2003. Further, the clarification issued by SIDCUL, which was only a nodal agency, was wholly illegal and without jurisdiction. The learned Counsel for the Petitioner further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existing unit could be located in order to avail exemption. The contention of the Respondents, is that the area where the Petitioner's unit is located had been earmarked for existing units only and, since the Petitioner's unit is a new unit, the Petitioner was consequently not liable for any exemption under the notification. 19. The State Government has also filed a counter-affidavit contending that under category "C" for Haridwar District in Annexure-II, units established in non-industrial areas would be entitled for exemption of central excise on their substantial expansion and since the Petitioner is a new unit it is not entitled for exemption under the notification. 20. SIDCUL has also filed a counter-affidavit indicating that the Petitioner's unit is not located in a designated industrial area and that the area is required to be notified by the State Government which has not been done so far. It was further contended that the heading under category "C" in District Haridwar, namely, "Industrial Activity in Non-Industrial Area (to be notified alongwith extension)" had wrongly been incorporated in the notification by a typographical error while sending the details of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10th June, 2003 is on account of the reasoning that category "C" under District Haridwar applies only to existing units and not for new units. This reasoning is based on the basis of the heading given in category "C" namely, "Industrial Activity in Non-Industrial Area (to be notified alongwith extension)" implying that this category refers to existing industrial units. 25. In our opinion, the reasoning adopted by the Respondents is patently erroneous and cannot be culled out from the categories mentioned in Annexure-II. 26. The notification dated 10th June, 2003 clearly indicates that a new unit would be entitled for exemption if it commences production after 7th January, 2003 established in an area specified in Annexure-II. The said categories mentioned under District Haridwar namely,- (A) Existing Industrial Estates, (B) Proposed Industrial Area/Estates, (C) Industrial Activity in Non-Industrial Area (to be notified alongwith extension) and, (D) Expansion of Existing Estates does not in any manner indicate that the said categories (A), (B), (C) and (D) relates to an existing unit or to a new unit. Consequently, we are of the opinion that category "C" ..... X X X X Extracts X X X X X X X X Extracts X X X X
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