AGGARWAL BROS MADRAS Vs. UNION OF INDIA

JUDGEMENT

(1.) ONE Messrs Ramakrishna Kulwantrai held a licence L. 4 No. 3 of 1953 for the manufacture of iron and steel products falling under Tariff Item 26AA of the Schedule I to the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act) for their factory located at 4B/4C, North Railway Terminus Road, Royapuram, Madras 13. The petitioners herein purchased this factory and applied for transfer of the licence on 16-10-1963 and a fresh licence was issued in terms of the provisions of Rule 178(3) of the Central Excise Rules (hereinafter referred to as the Rules, The transferor had the benefit of exemption from excise duty under Notification No. 131/62, dated 13-6-1962. But the petitioners who are transferees of the factory were held not entitled to the exemption under the said notification as they had applied for licence after 13-6-1962 and the benefit of exemption under the notification was not available to new licensees. In that view the Excise authorities issued a demand under Rule 10A of the rules for Rs. 7, 485.66 being the excise duty on the clearance made during the period 21-7-1963 to 30-11-1963. This demand was objected to by the petitioners before the Assistant Collector, who had, however, confirmed the same by his order dated 10-1-1968. The petitioners filed an appeal to the Collector of Central Excise but the order of the Assistant Collector was affirmed by him. The matter was taken in revision to the Government of India and there also the petitioners were not successful. The petitioners therefore seek to quash the order of the Government of India confirming the orders of the Excise authorities imposing the said demand.

(2.) IN this writ petition the petitioners have raised substantially two contentions : (1) that the demand issued under Rule 10A is invalid as Rule 10A itself isultra viresthe provisions of the Central Excise Act and (2) that the petitioners are entitled to the benefit of the exemption as they cannot be considered to be new licensee since they were manufacturing the goods only on the basis of the licences issued in the name of their transferor Messrs. Ramakrishna Kulwantrai.

(3.) THE next question is as to whether the petitioners are entitled to the exemption under the Notification No. 131 of 1962, dated 13-6-1962 which is set out below :"In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 as in force in India, as applied to the State of Pondicherry, the Central Government hereby exempts with effect from 24-4-1962 Iron and Steel products falling under Item No. 26AA of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and made from rerollable scraps of iron and steel which has been already paid to the appropriate amount of duty from the whole of the duty of excise leviable thereon :