ZENITH CHEMICALS Vs. GOVT OF INDIA

JUDGEMENT

(1.) This is a writ petition against the order of Government of India, Ministry of Finance, Department of Revenue dated February 4, 1991, whereby the revision application filed by the petitioner against the appellate order dated March 19, 1990 passed by the Collector of Customs Central Excise Appeals, Bombay, who had upheld the order of the Assistant Collector (Rebate), Bombay dated February 24,1989, was rejected.

(2.) The writ petition arises in the following circumstances : The petitioner is a manufacturer and exporter of H. Acid (Dye-Intermediate). Nephthalene is one of the inputs used in the manufacture of H. Acid. Before the commencement of the Central Excise Tariff Act, 1985 both the aforesaid input as well as the end product fell under tariff item 68 of the Central Excise Tariff Act. The petitioner at that time was availing proforma credit under Rule 56-A Central Excise Rules, 1944 as both the input as well as the end product fell under one common tariff item. Subsequent to the coming into force of Central Excise Tariff Act, 1985, Nephthalene was classifiable under sub-heading 2707.40.

(3.) On October 6, 1986, the Government of India by Notification No.432/86 exempted final products, namely. Dye Intermediate, Pharmaceuticals Products, Pigments, Synthetics, Organic Dye-Stuff and Leather Tanning Agents from so much of duty of Excise leviable thereon under the Central Excise and Salt Act, 1944 as is equivalent to the duty of Excise already paid on the input namely Nephthalene. This Notification in so far as it is relevant is extracted below and reads thus - "In exercise of the powers conferred by sub-rule (1) of the rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts excisable goods of the description specified in column (5) of the Table hereto annexed (such goods being hereinafter referred to as "final products") and falling under such Chapter of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as is specified in the corresponding entry in column (4) of the said table, from so much of the duty of excise leviable thereon under the Central Excise and Salt Act, 1944 (I of 1944) as is equivalent to the duty of excise leviable thereof under the said Act already paid on the goods of the description specified in the corresponding entry in column (3) of the said Table (such goods being hereinafter referred to as "inputs") and falling under such sub-heading No. of the said Schedule as is specified in the corresponding entry in column (2) of the said Table : Provided that the inputs specified in column (3) of the said Table are used in the manufacture .of the final products specified in the corresponding entry in column (5) of the said Table." Sr.No Sub-Heading Description Chapter Description of No. of inputs No. final product 1. 2707.40 Nephthalene 29 Dye Intermediate. 2. 2707.40 Nephthalene 30 Pharmaceutical Products. 3. 2707.40 Nephthalene 32 Pigments, Synthetic Organic Dyestuffs. 4. 2707.40 Nephthalene 34 Leather Tanning agents