TUNGABHADRA INDUS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS appeal is directed against the Division Bench judgment of Andhra Pradesh High Court in Writ Petition No. 4059 of 1994, wherein, following the earlier judgment of the said Court in Writ Petition No. 11311 of 1991, the High Court dismissed the writ petition.

(2.) THE appellant is the manufacturer of hydrogenated oil. The appellant filed a Reference before the Assistant Collector, Central Excise, Kurnool, claiming that they would be entitled to utilise the accumulated credit, available to them under the Money Credit Scheme, as per Rule 57-K of the Central Excise Rules, 1944 (hereinafter referred to as 'the rules), at the time of rescinding of the Notification No. 27/87 as well as the credit available to them under Notification dated 11/10/1989, issued by the Central Government under Rule 57-K of the Rules. The Assistant Collector disposed of the said Reference by his order dated 9-10-1991, holding that the assessee-appellant is entitled to appropriate the credit available to him on the date of recession of the Notification of 1987, which stood rescinded on 25th of August, 1989 as well as the credit which gets accumulated, pursuant to Notification dated 11th of October, 1989, but not entitled to utilise the credit available under both the Notifications simultaneously and, therefore, the credit would be utilised for payment of duty on the manufactured product, which should not exceed Rupees one thousand per M.T. It is because of this order, the appellant filed the writ petition in the High Court of Andhra Pradesh to stay the recovery of excise duty contemplated under Notice dated 14-10-1998 issued by the Superintendent of Central Excise, Kurnool. The identical question raised by the appellant in the writ petition filed before the Andhra Pradesh (High Court) having been answered against the assessee in another writ petition, which stood disposed of on 28-4-1998, the present writ petition by the appellant also stood dismissed. Be it be stated that in disposing of Writ Petition No. 11311 of 1991 on 28-4-1998, the High Court also came to the conclusion that the assessee is not entitled to adjust the available credits under Notification of the year 1987 as well as the Notification of the year 1989, simultaneously, and therefore, there has been no illegality committed by the Excise Authorities. The question for consideration, therefore is whether an assessee like the appellant, who accumulated credits to his accounts on account of the incentive Notification issued by the Central Government in exercise of powers conferred under Rule 57-K of the Rules by the date of the recession of the said notification on 25/08/1989 can make adjustment towards payment of duty in addition to the credits earned, pursuant to Notification dated 11th of October, 1989 simultaneously.

(3.) MR. T.L.V. Iyer, the learned senior counsel, appearing for the Union of India did not dispute the position that the credits already acquired could be utilised notwithstanding rescinding of the relevant notification, even though the stand taken by the Union of India in the counter-affidavit filed in this Court is to the contrary. But according to MR. Iyer the accumulated credit in favour of the assessee under the old notification of the year 1987 can be utilised subject to the conditions mentioned in the notification itself and in that view of the matter, an assessee is not entitled to utilise the accumulated credit under the old notification as well as the credits earned under the new notification of the year 1989 simultaneously and accordingly, the authorities of the department have taken the correct view. In support of this contention, reliance has been placed on the decision of the Karnataka High Court in the case of Union of India v. Modern Mills Ltd., 1994 (72) ELT 246 (Kant).