TMI Blog1980 (3) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Costs and Prices to go into the entire economics of the growth of automobile tyres and tubes industry and to suggest measures calculated to further its growth. A detailed study was then made by that Bureau and a report was submitted in the year 1973, making several recommendations. As a consequence thereof, the Central Government issued a notification dated 18-1-1974 bearing No. 8 of 1974, under Rule 8 of the Central Excise Rules, 1944, inter alia, granting exemptions from payment of excise duty to the new industrial units pertaining to the said automobile tyres and tubes industry. By virtue of and under this notification, the said industrial units were granted exemption; so that, inter alia, they became liable to pay only 40% ad valorem excise duty instead of the current 55% ad valorem duty. 3. The petitioners contend that relying upon this policy of the government, the first petitioner sponsored and established its industrial unit for the manufacture of automobile tyres and tubes at Perambra, Trichur District in the State of Kerala, and were duly granted an industrial licence under the provisions of the Industries Development and Regulations Act, 1957. The trial production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions dated 18-1-1974 and 16-6-1976, it is stated that the Central Government issued a press note which was circulated by the Collector of Customs and Central Excise, Cochin by Trade Notice No. 54/77, dated 9-3-1977, directing that the excise authorities should grant exemption available under the latter notification only to such manufacturers as passed on their benefits thereof partly or wholly to their respective consumers. This was pleaded to be an unwarranted interference in the quasi-judicial functions of the excise authorities by administrative directions. 7. The petitioners, it is next averred, submitted to excise authorities their price lists in accordance with the provisions of the Central Excises Salt Act, 1944, and the Central Excise Rules, being price list No. 3/74 and price list No. 4/74. The Assistant Collector of Central Excise (impleaded as Respondent No. 2), however, settled and/or disposed of those price lists by his orders dated 21-3-1977 and 25-3-1977, in such manner that the first petitioner was denied benefits of the second notification. In doing so, he principally based his orders on the administrative directions contained in the said Press Note. In this w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 36 of the Act, and that the same was not being availed as no justice would be accorded to the petitioners by the Central Government in view of the policy declaration made by it, the present writ petition has been moved. The notification dated 16-6-1976, issued by the Central Government, it is pointed out, was in the exercise of statutory powers and the first petitioner qualified for certain benefits thereunder. There was no such condition imposed in that notification that the benefits were available to the manufacturers only if they passed them on to the consumers. The excise authorities, it is asserted, could not abdicate their quasi-judicial functions in favour of the Central Government and be guided by the Press Note or the Trade Notice as aforesaid. The impugned orders are, therefore, assailed on the ground that they partake the inherent vice of the impugned trade notice. The benefits available under the notification dated 16-6-1976, are pleaded to constitute property within the meaning and for the purpose of Articles 19 and 31 of the Constitution of India, and the effect of the impugned orders was that they deprived the petitioners of their property in violation of thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty for the period 14-7-1978 to 31-8-1978, be not recovered. 13. The respondents on their part have challenged the maintainability of this writ. It is pointed out that alternative remedy of revision before the Central Government under Section 36 of the Act, was available which had not been availed of. Issue of Notifications No. 8/74 and 198/76, dated 16-6-1976, and the Trade Notice 54/77, dated 9-3-1977 are admitted. The benefit of the Notification No. 198/76, it has been asserted, was rightly denied to the first petitioner as it was not passing on the benefits to the buyers. It is, however, denied that the Notification No. 198/76 was issued on the basis of the recommendations of any committee. The government, it is pleaded, is within its rights in defining the purpose for which a concession is granted and to impose conditions for availing of the same. As such no exception could be taken to the Press Note quoted in the Trade Notice No. 54/77. No provisional clearance was allowed to the first petitioner by the Assistant Collector as its case did not fall under Rules 173-C (2-B) and 9-B of the Central Excise Rules. The Delhi High Court decision in the Modi Rubber Ltd., it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to pass on the benefit accruable under that notification to the consumers in terms of the Press Note issued by the Central Government which was circulated by the Collector of Customs and Central Excise, Cochin, by Trade Notice No. 54/77 of 9-3-1977. This Trade Notice had simply given effect to the Press Note issued by the Central Government. Since the latter had emanated from New Delhi, the jurisdiction of this Court to entertain this writ clearly exists. Moreover, when the Central Government had itself issued the impugned Press Note, it was futile to move any revision under Section 36 of the Act before it. The writ is, therefore, maintainable. 18. We further find that the validity of this Central Government Press Note quoted in the said Trade Notice, dated 9-3-1977, came up for adjudication before a Division Bench of this Court in the case of Modi Rubber Ltd. v. Board of Central Excise and Customs, reported as I.L.R. (1978) II Delhi 352 = 1978 E.L.T. (J 127). It was held that since the earlier notification dated 16-6-1976, was statutory in nature, being issued under Rule 8 of the Central Excise Rules, its benefit could not be withheld by any subsequent administrative Press ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lications were not gone into by the Division Bench in the case of Modi Rubber Ltd. (supra), and that whatever liability was created or the benefit allowed in the levy of excise duty, the same passed on to the consumer, and the manufacturing cost was thereby not affected. We, however, find that in para 21 of the judgment, the learned Division Bench did go into the implications of Section 4 of the Act. The following observations were made :- "21. Mr. Dewan further pointed out that in order to determine the excise duty leviable on the items produced by the petitioner, it is necessary first to determine the assessable value under section 4 of the Act. It is only after the assessable value is determined that the excise duty leviable thereon is ascertained. It is erroneous to suggest, as is done by the Government, that assessable value will have to be again determined after taking into consideration the relief and exemption granted under the notification, dated 16th June, 1976. It is neither intended by the notification nor is it practicable that the assessable value should be determined after giving effect to the relief and the exemption contemplated under the said notification. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... denied the assessee petitioner the benefits of a notification dated 18-1-1974. Under this notification exemption from excise duty was granted in respect of tyres for motor vehicles (except certain specified items) if the total value of tyres for motor vehicles cleared by the manufacturer during the preceding financial year for whole consumption did not exceed Rs. 2 lacs. The petitioner started manufacture in December, 1976 and its commercial production started only on or about 8-3-1977. It, however, claimed the benefit of the above notification for the financial year 1976-77 on the ground that since in the preceding financial year 1975-76 its production was nil, it was entitled to the exemption under the notification in respect of its production in the financial year 1976-77. This contention has been rejected by the Assistant and Appellate Collectrors of Excise on the ground that the notification contemplated an exemption only in cases where a factory really did exist during the previous financial year and actually had clearance of some goods during that period. In the present case the petitioner did not exist in the financial year 1975-76 at all nor was there any clearance for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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