TMI Blog2023 (1) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... is not entitled to any benefit thereunder as petitioner-unit was not availing any benefit immediately before and/or on 1st day of July 2017. Not only this, petitioner-unit has been unambiguously shown to have commenced its commercial production as on 25th September 2017 and,as such, petitioner-unit is not squarely qualified and covered to have had the benefits as are emanating from the Notification/Scheme of 2017. In the present case, impugned Notifications are lucid and eloquent and need not be interpreted or construed in the way and manner the petitioner intends and chooses to and as a result whereof, writ petition qua impugned Notifications is liable to be dismissed. It is worthwhile to mention here that exemption notification should not be read liberally construed and beneficiary must fall within the ambit of exemption and fulfil the conditions thereof and if the conditions are not fulfilled, the issue of application of notification does not arise at all by implication. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranav Kohli, Sr. Advocate with Mr Vineet Nagla, Advocate Mr Arun Dev Singh, Advocate For the Respondent(s) : Mr Jagpaul Singh, Sr. CGSC for respondents 1,2 5 to 8 Ms Pallavi Sharma, Advocate vice Mr Ravinder Gupta, AAG for respondent no.4 None for respondent no.3 JUDGMENT TASHI RABSTAN-CJ(A) 1. In both the writ petitions, Notification No.F.No.10(1)2017-DBA-II/NER dated 5th October 2017 and Notification/SRO 519 and 521 dated 21st December 2017 read with Circular No.1060/9/2017-CX dated 27th November 2017, are prayed to be declared as violative of Article 14 of the Constitution of India to the extent the definition of Eligible unit prohibits petitioner s unit from availing any benefit under the impugned Notification. By writ of mandamus, petitioner s units: one situated at Chak Prat Singh, National Highway-1A, Hatli Morh, Kathua (J K); and another situated at SIDCO Industrial Complex, Lane-3, Phase-II, Bari Brahmana, Samba, are sought to be held and declared eligible for budgetary support as given under the Notification F.No.10(1)2017-DBA-II/NER dated 5th October 2017 and Notification/SRO 519 and 521 dated 21st December 2017. Respondents, by writ of manda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise dated 6th February 2010 (Excise Exemption Notification) to enable manufacturers to set up new units/undertake substantial expansion at a later date from availing the central excise benefit. According to petitioner, there was no sunset clause prescribed under Excise Exemption Notification, giving an option to existing units to undertake substantial expansion at any date without any limitation. 2.2 It is averred by petitioner unit that in order to avail the continued benefit, petitioner undertook steps for substantial expansion of its unit. As stated by petitioner-company the steps taken and permissions granted thereafter led it to presume that benefit given under the erstwhile Excise Exemption Notification would be grandfathered into the Goods and Services Tax (GST) regime. 2.3 It is stated that petitioner-unit made additional investment with the belief that the same would yield an exemption benefit over a period of time as envisaged in the erstwhile Excise Exemption Notification which now stand rescinded and replaced with the Budgetary Support Scheme announced vide impugned Central Notification. Following the rollout of GST regime on 1st July 2017, respondent no.2 rescin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 3. Objections have been filed by respondents. It is their contention that petitioner-unit was registered under erstwhile Central Excise under R.C.no.AABCG 3365 JEM 018 and was availing Central Excise Exemption benefit under erstwhile Notification no.56/2002-CX dated 14th November 2002 and that commencement of commercial production from expanded capacity was 10th February 2007, which was valid for ten years only, that is, up to 9th February 2017 and therefore, after 9th February 2017, petitioner-unit was neither eligible to avail the benefit of notification nor working under said notification and no application of petitioner-unit for further expansion of the unit is pending with the department. 3.1 It is further contention of respondents that notification no.56/2002-CX dated 14th November 2002 ceased to apply with effect from 1st July 2017 and stands rescinded on 18th July 20177 vide notification no.21/2017 dated 18th July 2017. 3.2 It is also contended by respondents that petitioner-unit was not availing the benefit of any exemption notifications issued by the Government of India in exercise of powers conferred under Section 5-A of the Central Excise Act in the erstwh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for petitioners has stated that petitioner-unit at Chak Pratap Singh, National Highway-1A, Hatli Morh, Kathua, J K, was availing the area-based exemption under erstwhile Notification no.56/2002-Central Excise dated 14th November 2002 and in the wake of option given under Notification no.1/2010-Central Excise dated 3rd February 2010, petitioner undertook substantial expansion for the said unit and due to such expansion, petitioner s unit would have received refund of central excise duty for a further period of ten years from the date of commencement of commercial production. 5.1 Learned senior counsel s further submission is that after rollout of GST, respondents rescinded erstwhile Central Excise Notification nos. 56/2002 and 02/2010 in terms of Notification no.21/2017 dated 18th July 2017, introducing a Central Scheme for budgetary support vide Notification no.F.No.10(1)2017-DBA-II/NER dated 5th October 2017. He also avers that rescinding notification has come to be issued on 18th July 2017 in exercise of powers under Section 5A(1) of the Central Excise Act when the said provision was not even in existence as Section 174 of the Central Goods and Service Tax Act repealed the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther contention is that the unit, availing benefit on 30th June 2017, has been given entitlement to the benefit whilst another unit, like petitioner, which did substantial expansion and had no opportunity to avail benefit under erstwhile Central Excise Notification no.01/2010, but were entitled to avail the benefit, is deprived of the benefit under Budgetary Support Scheme without there being intelligible criteria with the object sought to be achieved. 5.5 Learned senior counsel for petitioner, in order to bolster his submissions and contentions, has placed reliance on Geldhof Auto and Gas Industries Ltd v. Union of India, 2010 SCC Online Bom 2124; State of Bihar and others v. Suprabhat Steel Limited and others, (1999) 1 SCC 31; Lloyds Electric and Engineering Limited v. State of Himachal Pradesh and others, (2016) 1 SCC 560; State of Jharkhand v. Tata Cummins Ltd and another, (2006) 4 SCC 57; Bajaj Tempo Ltd v. Commissioner of Income Tax, (1993) 3 SCC 78; Vadilal Chemicals Ltd v. State of A.P. and others, (2005) 6 SCC 292. 6. Per contra, learned counsel for respondents has stated that in terms of Notification no.56/2002, exemption was applicable only to new industrial u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P notification dated 5th October 2017 immediately before 1st day of July 2017, and have shown their date of commencement of commercial production as 25th September 2017, which is not squarely covered under the said notification and therefore petitioner-unit is not eligible to budgetary support schemes. His further exhortation is that withdrawal of exemption is in public interest and therefore, a matter of policy and the courts would not bind the government to its policy decision for all times to come irrespective of the satisfaction of the government that a change in policy was necessary in public interest. To buttress his arguments learned counsel has placed reliance on a judgement passed by the Supreme Court in a case titled as Union of India v. V. V. F. Industries and others, reported in (2020) 20 SCC 57. 7. As is noticeable from perusal of Notification bearing F.No.10(1)/2017-DBA-II/NER, impugned herein, it has been in pursuance of the decision of the Government of India that Budgetary Support came to be notified to be provided to eligible manufacturing units operating in Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim under differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore 1st July 2017. The eligibility of the unit shall be on the basis of application filed for budgetary support under the scheme with reference to: (a) Central Excise registration number, for the premises of the eligible manufacturing unit, as it existed prior to migration to GST; or (b) GST registration for the premises as a place of business, where manufacturing activity under exemption Notification no. 49/2003- CE dated 10th June 2003 and no.50/2003- CE dated 10th June 2003 were being carried prior to 1st July 2017 and the unit was not registered under Central Excise. 7.7 Para 4.2 of the Notification provides that Specified goods means the goods specified under exemption notifications, listed in paragraph 2, which were eligible for exemption under the said notifications, and which were being manufactured and cleared by the eligible unit by availing the benefit of excise duty exemption, from: (a) The premises under Central Excise with a registration number, as it existed prior to migration to GST; or (b) The manufacturing premises registered in GST as a place of business from where the said goods under exemption Notification Nos.49/2003- CE and 50/2003- CE both dated 10th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld continue to be applicable in terms of the scheme as provided in impugned Notification. However, the provisions relating to facility of determination of special rate under the respective exemption notifications would not apply under the scheme. 7.13 Budgetary support under the scheme is to be worked out on quarterly basis for which claims are to be filed on a quarterly basis namely for January to March, April to June, July to September October to December. 7.14 It is also provided in the Notification that if any unit is found on investigation to overstate its production or make any misdeclaration to claim budgetary support such a unit would be made ineligible for residual period and would be liable for recovery of excess budgetary support paid. The activity as to concealment of input tax credit, purchase of inputs from unregistered suppliers, unless specifically exempt from GST registration or routing of third-party production or other activities aimed at enhancing the amount of budgetary support by misdeclaration would be treated as fraudulent activity and, without prejudice to any other action under law may invite denial of benefit under the scheme abinitio. The units w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including budgetary support paid for the past period under this scheme shall be recovered along with an interest @ 15% per annum thereon. In case of recovery or voluntary adjustment of excess payment, repayment, recovery or return, interest shall also be paid by unit at the rate of fifteen per cent per annum calculated from the date of payment of refund till the date of repayment, recovery or return. 7.20 When any amount under the scheme is availed by wrong declaration of particulars regarding meeting the eligibility conditions in this scheme or as specified under respective exemption notification issued by the Department of Revenue, necessary action would be initiated and concluded in the individual case by the Office of concerned Assistant Commissioner or Deputy Commissioner of Central Taxes, as the case may be. 7.21 The procedure for recovery as provided in the scheme/Notification is that where any amount is recoverable from a unit, the Assistant Commissioner or Deputy Commissioner of Central Tax, as the case may be, shall issue a demand note to the unit (i) intimating the amount recoverable from the unit and the date from which interest thereon is due and (ii) directing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Industrial Units located in States of J K, Uttarakhand, H.P. and North East dated 5th October 2017, is in operation. 9.1 Para 2.1 of the Notification dated 21st December 2017, provides that Eligible Manufacturing unit means a unit which avails the benefit of 58% reimbursement under Central Scheme and specified goods under Para 2.2. means the goods manufactured by Industrial Units as have been allowed by the Department of Industries/ Handloom/ Handicrafts/J K Khadi and Village Industries Board/ SICOP/ SIDCO. 9.2 For availing the benefit of the scheme, an eligible unit is to first utilize input tax credit of Central Tax and Integrated Tax and balance of liability, if any, would be paid in cash and where this condition is not fulfilled, reimbursement sanctioning officer would reduce the amount of reimbursement payable to the extent credit of central tax and integrated tax, is not utilised for payment of tax. 9.3 If any unit is found to have overstated its production or made any misdeclaration to claim reimbursement would be made ineligible for the scheme and would be liable for recovery of excess reimbursement paid to the industrial unit and that activity relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support under GST regime to the existing eligible manufacturing units operating in the States of J K ad others, which were eligible for drawing benefits under the earlier excise duty exemption/ refund schemes viz. Notfn. No.56/2002-CE 57/2002-CE both dt. 14.11.02 and Notfn. No.01/2010-CE dt. 06.02.2010 issued by Govt. of India, Ministry of Finance, Deptt. Of Revenue, but has otherwise no relation to the erstwhile schemes. After the introduction of GST regime, as per DIPP Notf. all these notfns. have ceased to apply w.e.f. 01.07.2017 and stand rescinded on 18.07.17 vide Notfn.No.21/2017 dt.18.07.18. As per Para No.3.1 of this scheme, the said scheme shall come into operation w.e.f. 01.07.17 for an eligible unit (as defined in Para 4.1) and shall remain in operation for residual period (as defined in Para 4.3) for each of the eligible unit in respect of specified goods (as defined in Para 4.2) and the overall scheme shall be valid upto 30.06.2027. The definition of Eligible Unit has been specified in Para No.4.1 which states as under Eligible unit means a unit which was eligible before 1st day of July, 2017 to avail the benefit of ab-initio exemption or exemption by way of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue ID number is not required to be issued to them for availment of budgetary support under the said scheme. I have further observed that the party has misdirected at Sr.12 of their application for unique ID that they were availing erstwhile Central Excise Notfn. No.01/2010 dated 06.02.2010 upto 30.06.2017, whereas the fact is that they were working under Notfn. No.56/2002-CE dated 14.11.2002 and that was also valid upto 09.02.2017 only. After 09.02.2017 and before 1st July 2017 they were not working under Notfn. NO.01/2010-CE dated 06.02.2010 and not availing any exemption during the said period. 7 In view of the aforesaid discussions, I hereby reject the application dated 28.02.18 of the party for issue of unique ID. Yours sincerely, Sd/ Assistant Commissioner 10.1. From perusal of impugned Order dated 28th August 2018, it is vivid that petitioner-unit is not Eligible Unit , to be given the benefit that it exhorts to be bestowed under the auspices of the Scheme of 2017. It is clearly mentioned in the impugned order dated 28th August 2018 that petitioner-unit, working under and in terms of Notification of 2002, being Notification no.56/2002, was entitled to the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. An exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the relevant policy and the exemption notifications issued in that regard. The exemption notification should be strictly construed and given a meaning according to legislative intendment. The statutory provisions providing for exemption have to be interpreted in light of the words employed in them and there cannot be any addition or subtraction from the statutory provisions. It is also well settled eligibility clause in relation to exemption notification must be given effect to as per the language and not to expand its scope deviating from its language and therefore, there is a vast difference and distinction between a charging provision in a fiscal status and an exemption notification. [Vide: Krishi Upaj Mandi Samiti, New Mandi Yard, Alwar v. Commissioner of Central Excise and Service Tax, Alwar, (2022) 5 SCC 62; Commissioner of Customs, Bangalore v. GE B Ltd and another, (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the mind of the court, while considering the applicability of the doctrine. Doctrine of promissory estoppel must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation. 12.3. The supersession or revocation of an exemption notification in the public interest is an exercise of the statutory power of the State under the law itself. 12.4. In Kasinka Trading v. Union of India (1995) 1 SCC 274, the Supreme Court has held that the appellants in the said case appear to be under the impression that even if, in the altered market conditions the continuance of exemption may not have been justified, yet, the government was bound to continue it to give extra profit to them. That certainly was not the object with which the notification had been issued. The withdrawal of exemption in public interest is a matter of policy and the courts would not bind the Government to its policy decision for all times. 12.5. As has been held by the Supreme Court in Union of India v. V.V.F. Ltd, (2020) 20 SCC 57, that under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subjects to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Courts must, therefore, adjudge constitutionality of such legislation by the generality of its provisions and not by its crudities and inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues. As has also been held by the Supreme Court in Commr. of Customs v. Dilip Kumar Co., (2018) 9 SCC 1, that every taxing statute including c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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