TAMIL NADU CHROMATES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE Order of the Court is as follows :- THE writ petition is for the issue of a writ of certiorarified mandamus to quash the order of the third respondent dated 27-10-1993 and to forbear respondents 1 to 3 from insisting on payment of the central Excise Duty on the products of the petitioner's company while they are removed from the factory, until the operation of the scheme framed by the Board of industrial and Financial Reconstruction constituted under the Sick Industrial companies (Special Provisions) Act, 1985, (hereinafter called "the act" ).

(2.) THOUGH I am concerned only with the miscellaneous petition seeking an interim injunction restraining the respondents from insisting on such payment, pending disposal of the writ petition, a few facts may be necessary to understand the scope of the prayer in the injunction petition. The petitioner company is manufacturingsodium Bichromatewhich in turn is used in the manufacture of paints and certain other industries. Due to financial and other difficulties the Company approached the Board under the said Act and it was duly declared as a Sick Unit within the meaning of Section 3 (1) (b) of the act. The Industrial Reconstruction Bank of India was appointed as the operating agency to finance the scheme of rehabilitation for reviving the company. After considerable labour and other problems, the factory was working intermittently between August, 1992 and July, 1993. During the course of this period the Company had paid all the Central Excise Duty. The factory commenced production from 18-10-199 3 onwards. On 27-10-1993 the petitioner wrote a letter to the third respondent, referring to the scheme framed by the Board and Section 22 of the Act and consequently requesting the third respondent to permit removal of the goods manufactured without payment of Central Excise Duty for a period of two years and undertaking to pay the duty in a phased manner thereafter. The third respondent passed an order on the same day expressing inability to grant permission. It is under these circumstances that the writ petition has been filed for the prayer already referred to.

(3.) THE only other argument of Mr. G. Ramaswamy learned senior Counsel appearing for the petitioner is that it was open to the respondents to approach BIFR and seek their consent for recovering the excise duty at the time of removal of the goods. On the other hand the counsel for the revenue argues that it is for the petitioner to approach the Board and get a clarification. I am not deciding this question because I have already held that section 22 of the Act will not come to the aid of the petitioner. Central excise Authorities seek to recover the duty at the time of removal of the manufactured goods. In this connection the judgment of the Gujarat High Court in relation to the sales tax arrears collected from the purchasers, by the government seems to be apposite. Section 11-D of the Central Excise Act, also is to the same effect. 8. For all the above reasons, I am not satisfied that the petitioner-company has made out aprima faciecase for the grant of injunction. Consequently, W. M. P. is dismissed. THE interim order granted on 11-11-1993 is vacated. .