MADHUSUDAN INDUSTRIES LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) AS common question of law and facts arise in both these petitions, they are disposed of by this common judgment and order. In both these petitions, the respective petitioner has prayed for appropriate direction or order, restraining the respondents, their servants and agents from preventing the petitioner -company from utilising money credit earned by it, as a result of use of unconventional minor oils, and thereby, set aside the Letter F. No. IV -16 -75/MP/2003, dated 24 -9 -2003 (Annexure -J), issued by respondent No. 3, herein. It is also, further, prayed that an appropriate writ, direction or order be issued prohibiting the respondents, their servants and agents completely and permanently from disallowing or preventing the petitioners/companies from utilizing accumulated money credit that was lying in the petitioner's RG 23B, Part -II, as on 22 -7 -1996.

(2.) THE petitioner in Special Civil Application No. 16743 of 2004, i.e. Morvi Vegetable Products Ltd., has also prayed for an appropriate order to quash and set aside Order -in -Original No. 01 & 02/Commr/2005, dated 18 -1 -2005, passed by respondent No. 1, making a demand of Central Excise Duty on the ground that the petitioner has wrongly availed money credit accrued in its favour, which was lying in its RG 23B, Part -II, as on 22 -7 -1996.

(3.) THAT the petitioner -company is engaged in the business of manufacture of vanaspati/vegetable products, which are the goods classified under Heading 15.04 of the Central Excise Tariff. The Central Government issued a Notification No. 27/87 on 1 -3 -1987, thereby, allowing money credit at the rates specified in the Notification for use of unconventional oils for manufacture of vanaspati. That, thereafter, the Notification No. 192/87 came to be issued by the Central Government on 12 -8 -1987, thereby, allowing the money credit for use of unconventional/minor oils for manufacture of soap. The conditions in the said Notification were that the credit availed on purchase of minor oils in one month could be used only in the succeeding month and that the credit utilized shall not exceed Rs. 1,000/ - per ton of vegetable products. It appears that as the rate, at which money credit was allowed, was higher, the manufacturers like the present petitioner -company started accumulating unutilized money credit in register maintained in form RG 23B. It appears that the Central Government, thereafter, issued a notification dated 25 -8 -1989 and rescinded the notification allowing money credit namely Notification Nos. 27/87 and 192/87. The Central Excise authorities in case of vanaspati manufacturers including the petitioner -company disallowed use of accumulated money credit for discharging duty liabilities on vegetable/vanaspati products on the ground that the notifications allowing money credit stood rescinded with effect from 25 -8 -1989. The aforesaid action on the part of the Central Excise authorities was challenged before this Court and this Court decided a group of writ petitions including the petition filed by the present petitioner -company and hold that the money credit was a monetary right earned by the manufacturers on purchasing and utilizing unconventional/minor oils and as manufacturers had changed the manufacturing process and plants hoping to get money credit by way of rebate, and therefore, vested right of utilizing money credit could not be taken away on rescission of the notifications. This Court, further, held that accumulated money credit would not lapse and the manufacturers were entitled to utilize the same in future for clearances of vegetable products. It appears that against the decision of this Court, the Revenue approached the Hon'ble Supreme Court and by order dated 8 -10 -1990, the Supreme Court dismissed the Special Leave Petitions.