ASSOCIATED CEMENT COMPANIES LIMITED Vs. DIRECTOR OF INSPECTION

JUDGEMENT

(1.) This judgment would dispose of three Civil writ petition Nos. 1207 of 1967, 425 of 1968 and 16 of 1970 which have been filed by the Associated Cement Companies Ltd., against the Director of Inspection, Customs & Central Excise, New Delhi. Arguments have been addressed in petition No. 1207 of 1967 and it is H stated that the decision in that petition would govern the other two petitions also. So far as petition No. 425 of 1968 in which the Central Authority and Deputy Director of Inspection too have been impleaded as respondent is concerned, an additional ground, to which reference would be made hereafter, is also taken.

(2.) The petitioner is a company which owns about 16 cement factories in various parts of India. Tax Credil Certificate (Excise Duty on Excess Clearance) Scheme, 1965 (hereinafter called "the Scheme") was made applicable to the cement industry in 1965 to provide an incentive for increased production. The above Scheme was made by the Central Government in exercise of the powers conferred by section 280-ZE read with section 280-ZD of the Income-tax Act, 1961 which had been inserted by the Finance Act, 1965, For the year 1965-66, with which we are concerned, the excise duty for cement levied under the Central Excises and Salt Act, 1944 (hereinafter, for the sake of brevity, referred to as "the Excise Act") was Rs. 23.60 Paise per tonne. As per section 80 of the Finance Act of 1965, a special duty of excise equal to twenty per cent of the total amount of excise charge able under the Excise Act on various articles including cement was levied. According to section 280-ZD, a person shall be entitled to a tax credit certificate for an amount calculated at a rate not exceeding twenty-five per cent of the amount of the duty of excise payable by him on that quantum of the goods cleared by him during the relevant financial year which exceeds the quantum of the goods cleared by him during the base year.

(3.) The authority concerned in these cases calculated the rate for the purpose of granting the tax credit certificate at twenty-five per cent of the basic excise duty levied under the Excise Act only (Rs. 23.60 Paise per tonne) and not tweny-five per cent of the entire amount of duty of excise paid by the petitioner. The petitioner went up in appeal but the same was rejected by the Director of Inspection. It was observed that the tax credit is to be given only in respect of the Central excise duty levied under the Excise Act and any other excise duty levied under a different enactment was not entitled to the concession.