UNION OF INDIA Vs. MODERN MILLS LTD

JUDGEMENT

(1.) THE Union of India and officers of Central Excise Department, functioning under the Central Excises and Salt Act, 1944 have brought in challenge in the present appeal an order dated 26 -10 - 1990 passed by the learned Single Judge in Writ Petition No. 18534 of 1989 moved by respondents herein before the learned Single Judge. By the impugned order, the learned Judge has allowed the petition and directed the appellants to permit to writ petitioners to utilise the accumulated credit claimed in Annexure -C to the petition subject to verification as to the correctness of the amount. The learned Judge has further observed that the writ petitioners will be entitled to accumulated credit under the earlier Notification No. 27/87 and in addition, they will be entitled to further benefit available under the subsequent Notification No. 45/89 as available to manufacturers of vegetable products under the said notification.

(2.) IN order to appreciate the grievance of the appellant -authorities, it is necessary to note a few relevant facts leading of these proceedings.

(3.) THE contention of the respondents was that accumulated credit, which was earned by the respondents during the currency of the Notification No. 27/87 did not get wiped off on account of rescission of Notification No. 27/87 and can be utilised by the respondents for clearances of future vanaspati products by effecting debits to the accumulated credit account and in any case under the new Notification No. 45/89, the respondents become entitled to get additional benefit of the said notification. According to the respondents for every tonne of Vanaspati being final product cleared at the factory gate as against the liability of Rs. 1900/ - per metric tonne of excise duty, the respondents were entitled to debit Rs. 1,000/ - to the account of credit earned under new Notification No. 45/89 and the balance of Rs. 900/ - could be adjusted by debiting the accumulated credit account so far as the accumulated credit under old Notification No. 27/87 was concerned and thus the respondents were not liable to pay in cash any excise duty for future clearances of final product Vanaspati oil and that the insistence of the Department that for even such future clearances despite the balance of accumulated credit under old notification, the respondents were to pay per tonne in cash Rs. 900 and could get the past accumulated credit adjusted only by debit entry of Rs. 1,000 was unjustified and illegal.