GUJARAT AMBUJA EXPORTS LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition under Article 226 of the Constitution of India, the petitioners have challenged show cause notices dated 2-7-2002 calling upon the petitioners to show cause as to why excise duty to the extent stated therein should not be recovered under Section 11A of the Central Excise Act, 1944 (the Act); penalty should not be imposed under Rule 173Q of the Central Excise Rules, 1944 (the Rules) and interest at the prescribed rate should not be recovered under section 11AA of the Act.

(2.) The petitioner No. 1, a Public Limited Company, is inter alia engaged in the business of manufacture of Deoiled cakes of Soyabean/Ground-nut/Mustard/other edible oil seeds and has two units at Kadi in Mehsana district. The above units of the petitioner company have been permitted to work as 100% Export Oriented Undertakings, by the Government of India. The two units of the petitioner company are known as "Unit No. 1" and "Unit No. 2", where the petitioner company is manufacturing deoiled cakes of edible oil seeds for the purpose of their export to foreign countries. The petitioners have been granted necessary permissions by the Department of Industrial Development, Ministry of Industries, Government of India to work as a 100% Export Oriented Units. Pursuant to the letter of permission issued by the above referred Ministry, the petitioner company has been producing deoiled cakes of edible oilseeds and such deoiled cakes which are classified under SH No. 2302.00 of the Schedule to the Central Excise Tariff Act, 1985, were being exported by the petitioner company to foreign countries.

(3.) During the manufacture of deoiled cakes, a by-product, namely. Soyabean Solvent Extraction Raw Oil/Crude Oil falling under SH No. 1503.00 of the Tariff emerges. The petitioners' units are, however, allowed to operate as 100% EOUs for such product which is a fact also mentioned in the letter of permission issued in favour of the petitioners. According to the petitioners, the above referred types of Crude Oils falling under SH No. 1503.00 of the Tariff are chargeable to nil rate of central excise duty.