SUPER CHEMICALS Vs. UNION OF INIDA

JUDGEMENT

(1.) THE Order of the Court is as follows :- Though all the above three writ petitions have been filed by different concerns, the first respondent in all the above writ petitions being the Union of India, represented by its Secretary, Ministry of Finance, Department of Revenue, New Delhi and the second respondent in W.P. No. 10747 of 1990 is the Superintendent of Central Excise, Sivakasi, the second respondent in W.P. No. 13580 of 1993 is the Superintendent of Central Excise, Sathoor Range, Sathoor and the second respondent in W.P. No. 13581 of 1993 is the Superintendent of Customs and Central Excise, Sathoor Range II, Sathoor and further the legal question and the relief sought for in all the three writ petitions being one and the same they are jointly heard and a common order is passed.

(2.) IN all the above writ petitions, the petitioners would pray for a Writ of Mandamus to direct the respondents to apply the Notification No. 175/66, dated 1-3-1986 without reference to the amending Notification No. 142/89, dated 16-5-1989 issued by the first respondent herein in so far as the petitioners are concerned.

(3.) IN all the three writ petitions, the legal question involved since being one and the same, it has been pleaded in common, the sum and substance of which is that the first respondent under Rule 8(1) of the Central Excise Rules issued the Notification No. 175/86 dated 1-3-1986 giving exemptions to the first clearances of the excisable goods of the description specified in the Annexure to the Notification (specified goods) up to the value of Rs. 20, 00, 000/- and concessional duty on subsequent clearances in the case of manufacturer having clearances all excisable goods not exceeding two crores of rupees in the preceding year, subject to certain conditions; that under Notification No. 175/86, dated 1-3-1986, the Potassium Chlorate which falls under Chapter 28 of the Central Excise Tariff and classified under the sub-heading 2829.10 was exempt from excise duty subject to the conditions mentioned in the abovesaid Notification for SSI Units; that the first respondent by Notification No. 142/89, dated 16-5-1989 without any reason arbitrarily amended the Notification No. 175/86, dated 1-3-1986 and as per the amendment, the Potassium Chlorate, which falls under sub-heading 2829.10 alone has been denied exemption from payment of excise duty. Hence, contending that the Notification No. 142/89, dated 16-5-1989 amending the Notification No. 175/86 issued for the benefit of Small Scale INdustries is bad in law, all the petitioners have come forward to file the above writ petitions seeking the relief extracted supra.8IN the counter affidavit filed on behalf of the . respondents in the first writ petition, it would be submitted that the petitioner therein applied for L4 licence on 2-3-1990 and the same was issued on 9-3-1990 for manufacture of Potassium Chlorate; that though the Notification No. l75/86 gives concession to Small Scale INdustries including Potassium Chlorate, the Government withdrew the concession extended to Potassium Chlorate by issuing amending Notification No. 142/89; that the Government as a policy decision has thought this commodity under physical control with specific rate of duty of Rs. 5/- per Kg., consequent to which the Central Excise Notification 175/86 was amended by Notification No. 142/89, dated 16-5-1989 to remove the Potassium Chlorate falling under sub-heading 2829.10 from the scope of eligibility under Notification No. 175/86; that the Central Excise licence was issued to the unit only on 9-3-1990 long after the introduction of the amended Notification; that the decision was a policy matter decided by the Government on various circumstances and hence there is no arbitrariness involved; that consequent to increase in excise duty on Potassium Chlorate from 15% ad valorem to Rs. 5/- per Kg. in 1989 Budget on reports received from field formations that there has bean proliferation of units in the Small Scale INdustries Sector for manufacture of Potassium Chlorate and this trend of proliferation started on account of wide duty difference between the organised sector units and the units in the Small Scale Sector which were availing the exemption under Notification No. 175/86, dated 1-3-1986 and this led to considerable loss of revenue as more and more numbers of SSI units started manufacturing Potassium Chlorate; that further the Department of Chemicals and Petro-chemicals had recommended that besides the revenue considerations, Potassium Chlorate is an explosive and hazardous chemical whose production should not be encouraged in the SSI Sector and taking into account all these factors, the Government of INdia have issued Notification No. 142 of 1989, dated 16-5-1989 so as to exclude Potassium Chlorate, from the purview of Small Scale exemption scheme; that the petitioner's single unit alone is not affected but all the Potassium Chlorate manufacturers in the Small Scale Sector in the countries are affected and hence the petitioner's claim that he has been put under grave hardship and prejudice is not correct and it is only to mislead this Court. With such and other averments, the respondents would pray to dismiss the writ petition as devoid of merits.