TMI Blog1990 (2) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 40/87 specifying the final products, minor vegetable oils and rates at which credit was to be given for use of such minor oils in manufacture of vanaspati and soap, respectively. Notification No. 40/87 was superseded by Notification No. 192/87-C.E. and the later notification was subsequently amended by Notification No. 17/88-C.E., dated 1-3-1988. 3. It is the case of the petitioners that with an intention to avail of the benefits of those notifications, the petitioners effected changes in their plants and machinery and started using specified minor oils. It is also their case, and that is not in dispute, that they were given credit of money for the use of those specified minor oils and were permitted to utilise the same for payment of excise duty on Vanaspati and soap manufactured by them using such specified minor oils till 25-8-1989. The Central Government on 25-8-1989 withdrew Notifications No. 23/87 and 192/87 by issuing Notification No. 39/89. Though these notifications were rescinded on 25-8-1989, the subordinate excise officers probably did not know about the same till 1-9-1989. Thereafter they started informing the petitioners that as both the notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of money is to be given for use of such inputs in the manufacture of final products. (2) When a notification has been so issued under sub-rule (1), credit at rates specified therein may be allowed for use of such inputs in the manufacture of such final products and the credits so allowed may be utilised for payment of duty on the final products, subject to the provisions in this section and the conditions, if any, stipulated in the said Notification. "57N. Manner of utilisation of the credit: (1) Credit of money allowed in respect of any inputs may be utilised towards payment of duty of excise on the final products in or in relation to the manufacture of which such inputs are intended to be used in accordance with the provisions of the declaration filed under Rule 57-0: Provided that the credit in respect of inputs used in the final products cleared for export under bond shall be allowed to be utilised towards the payment of duty of excise on similar final products, cleared for home consumption on payment of duty. (2) No part of the credit allowed shall be utilised save as provided in sub-rule (1)." As stated earlier, Rules 57K to 57P came to be inserted into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rer or adjusted against or utilised for payment of duty on any excisable goods under any other circumstances; (iv) where the description in column (2) of the Table specifies solvent extracted variety of the oil, the manufacturer shall within 5 months from the date of taking credit, or such extended period as the Assistant Collector of Central Excise may allow in this behalf, produce a certificate from an officer not below the rank of Deputy Director in the Directorate of Vanaspati, Vegetable Oils and Fats in the Ministry of Food and Civil Supplies of the Government of India to the effect that the said oil has been manufactured by the solvent extraction method; and (v) the credit shall be taken only in respect of indigenous inputs and the manufacturer shall produce such documents as may be required by the Assistant Collector of Central Excise in this regard: Provided that in the case palm oil used as input the manufacturer shall within 5 months from the date of taking credit, or within such extended period as the Assistant Collector of Central Excise will allow in this behalf produce certificate from an officer not below the rank of Deputy Director in the Directorate of Vanaspat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section, be subject to the following conditions, namely :- (i) the credit shall be taken only in respect of indigenous inputs; (ii) in the cases where all the processes relating to the manufacture of soap, starting from vegetable oils, are done in the same factory, the credit shall be taken on the quantity of vegetable oils received into the factory for the purpose and only on or after the date of receipt of such vegetable oils; (iii) in the cases where the processes of hydrogenation or hydrolysis are done outside the factory manufacturing soap, the credit shall be allowed - (a) only if the procedure that may be specified by the Collector to establish the identity of the vegetable oils from which such processed oil has been made is followed and only if the manufacturer produces such documents as may be required by the Collector in this regard; (b) only on or after the receipt of such hydrolysed or hydrogenated vegetable oils into the factory manufacturing soap; (c) on the quantity of processed vegetable oils received into the factory calculated at the rate applicable to the corresponding vegetable oils. (iv) the credit taken during any calendar month shall be utilised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ad valorem duty on vanaspati is being changed to a specific duty." In the Memorandum issued by the Finance Ministry, explaining provisions of Finance Bill for the year 1987-88, it was further explained that the existing rebate scheme for vanaspati and soap was modified so as to provide for granting of rebate through a system of granting credit to be used for payment of duty on final products. The speech and the memorandum also make it clear that the purpose of the new provisions contained in section AAA was to allow credit to the manufacturers of vanaspati and soap, if they had used in the manufacture of those products specified minor oils. 9. This purpose will have to be kept in mind while interpreting Rules 57K and 57N. Clause (b) of sub-rule (1) of Rule 57K uses the words, "the credit of money is to be given". Sub-rule (2) though uses the words, "may be allowed" really confers a right on the manufacturer and leaves no discretion with the excise authorities to refuse credit, if all the specified conditions are satisfied. Though Rule 57N provides that the credit of money allowed in respect of any inputs may be utilised towards payment of duty of excise on the final products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit of money, but the Government could not have intended to deprive the manufacturer of his right to utilise the credit already earned because that would have been unfair to the manufacturers. The manufacturers, relying upon the rules and the notifications, used the notified minor oils in the manufacture of Vanaspati or soap, thus suffering a disadvantage because of the low process yield of such minor oils, but hoping to get credit of money by way of rebate and a further right to utilise that credit for payment of excise duty on the manufacture of Vanaspati and soap. We are, therefore, of the opinion that even after the aforesaid notifications came to be rescinded with effect from 25-8-1989, the credit of money which was earned by the manufacturers of Vanaspati and soap could be utilised by them in terms of the rules and the notifications for payment of excise duty on Vanaspati and soap manufactured by them after 25-8-1989. 11. Learned counsel for the petitioners relied upon the decision of the Bombay High Court in London Star Diamond Co. (India) Pvt. Ltd. v. Union of India,, 1989 (43) E.L.T. 47, wherein it was held that the importers who became entitled to receive drawback of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w duties in respect of transactions which were complete at the time the Amending Act came into force ..." He also relied upon similar observations made by the Supreme Court in Govinddas v. Income-tax Officer, AIR 1977 SC 552: "10. Now it is a well settled rule of interpretation hallowed by time and sanctified by judicial decisions that unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure,.." These observations of the Supreme Court also support the view that a right which is acquired as a result of operation of a statutory provision cannot be taken away retrospectively unless the statutory provision so provides or by necessary implication it has the same effect. As pointed out, here in this case, what has been done is to rescind the notifications and not the Rules. Though the right of the manufacturers like petitioners to credit of money had crystalized only after issuance of the notifications and the extent of it was governed by the terms of the notif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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