INDIAN DYESTUFF INDUSTRIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner carries on the business of manufacture of synthetic organic dyestuff and in the manufacturing process uses about two dozen intermediates as raw materials, classifiable under Tariff Item No.68 in the First Schedule to the Central Excise and Salt Act, 1944 (for short the Act). On the manufacture of synthetic organic dyestuff the petitioner is liable to pay excise duty under Tariff Item No.14-D of the First Schedule.

(2.) In exercise of powers conferred under Rule 8 of the Central Excise Rules, 1944 (for short, the Rules), the Central Government, by Notification No.103/61, exempted synthetic organic dyestuff falling under Tariff Item No.l4-D, manufactured wholly or partly out of the intermediates from the payment of so much duty of excise thereon as was equivalent to the amount of countervailing duty paid on imported intermediates. As a result of the Notification, the manufacturer of synthetic organic dyestuff became entitled to get credit for countervailing duty paid on raw materials utilised in the manufacture of said synthetic organic dyestuff at the time of payment of excise duty thereon.

(3.) By amending Notification No. 109/80, dated 19 June 1980, the Central Government directed that Notification No.103/61 shall stand amended in the manner specified in Col.3 of the table annexed to the Notification. Thus, Notification No. 103/61 stood amended by insertion of the following proviso: