ASSOCIATED CEMENT COMPANIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) As soon as this appeal was called out for hearing, we made it clear to both the counsels that we would not like to take up this appeal for hearing as one of us, (Chief Justice), is a share-holder if the appellant No.1 company. Both the counsels stated that not only they have no objection to this Bench hearing the appeal, but they insisted that appeal should be heard by the Bench. In view of the specific submission made by both the counsels, we had taken up the appeal for hearing.

(2.) The appellant No.1, The Associated Cement Companies Limited, is a company registered under Companies Act, 1956 and is engaged in the manufacture of cement. The company had set-up a factory at Wadi Gulbarga district of State of Karnataka some time in the year 1968. The factory initially had a capacity to manufacture 4 lakh Metric Tonnes of cement and subsequently it was increased to 6 lakh Metric tonnes. The manufacture of cement is liable to payment of Excise Duty under the provisions of Central Excise and Salt Act, 1944.

(3.) The country experienced serve shortage of cement in Nineteen Eightees and government of India was keen on the manufacturers setting up new factories for increasing production of cement. The Government of India had offered various incentives and concessions to the manufacturers of cement. Relying upon the assurance given by Government of India, the Company set up second plant known as Phase-II in the Factory in July, 1982 and capacity was 10 lakh Metric Tonnes. The manufacture of cement commenced in July, 1982 in the second plant of the Company. On 29-4-1987 the Government of India in exercise of powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, exempted cement falling under sub-heading No.2502.20 of the Schedule to the Central Excise Tariff Act, from so much of duty of excise leviable thereon, as is in excess of the amount calculated at the rate of Rs. 205 per tonne. The notification required that exemption is available provided cement is manufactured in a factory, which had commenced production during the period commencing from January 1, 1982 and ending with March 31, 1986. It is not necessary to refer to the other requirements for availing of the benefit of exemption. The notification was to remain in operation till March 31, 1990.