CHAKRA TYRES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE matter arises under Central Excises and Salt Act. THE facts are not in dispute. THE petitioner is a public limited company. It was incorporated on 2-6-1982. Its main object is to manufacture tyres and tubes for automobiles and other rubber products. Some tax concession is being extended by the Central Government to new industries since commencement of production with a view to promote industrial growth in this country. It is the case of the respondents since 1976 some tax concession was being issued as regards rubber industry such as Notification Nos. 198/76; 142/78; 268/82; 88/84 and 159/85. In this case, I am concerned with Notification Nos. 268/82, 88/84 and 159/85. At once, it may be pointed out that the petitioner relies on Notification No 268/82 undergoing slight change in No. 88/84, which was rescinded under Notification no. 159/85 on 15-7-1985. It is the latest Notification No. 159/85 that is sought to be quashed in this proceeding.

(2.) THE part of Notification No. 268/82 as germane for this case is reproduced below :- NOTIFICATION No. 268/82 - Central Excises, DATED 13-11-1982 GSR. 693 (E ). In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central government hereby exempts tyres (excluding tubes and flaps) falling under Item no. 16 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise leviable thereon under Section 3 of the said Act as is in excess of the amount calculated at the rate of seventy-five per cent of the rate of duty leviable on such tyres under the said first Schedule, read with any Notification issued under sub-rule (1) of rule 8 of the said rules and in force for the time being:provided that such tyres are manufactured in a factory which is a new industrial undertaking licensed under section 11 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and from which the clearances of tyres are effected for the first time during the period commencing on the 1st day of April, 1976, and ending with the 31st day of March, 1984: Provided further that the exemption contained in this notification shall not apply to clearances of tyres effected after the expiry of a period of seven years from the date of the first clearance of tyres from any factory. Provided also that the exemption contained in this notification shall apply to first clearances of tyres for home consumption during any financial year only upto a total quantity not exceeding seventy-five per cent of the initial annual licensed capacity of tyres as certified by the development Officer of the Directorate General of Technical Development : Provided also that the exemption contained in this notification shall not apply to such of the clearances of tyres as are in excess of the clearances of tyres in respect of which the aggregate of the amount of exemption under this Notification and the amount of exemption, if any, availed in respect of clearances of tyres, under all or any of the notifications of the Government of India in the Department of Revenue and banking No. 198/76-CEs. . , dated the 16th June, 1976, or in the Ministry of finance (Department of Revenue), No. 142/78-CE. , dated the 14th July, 1978, or in the Ministry of Finance (Department of Revenue) No. 107/81-CE. , dated the 24th April, 1981, equals fifty per cent of the sum total of the value of the capital investment made on plant and machinery in the said factory for the manufacture of tyres prior to the date of the first clearance of tyres as certified by the Development Officer of the Directorate General of Technical development. Explanation I: For the purposes of computing the period of seven years from the date of the first clearance, the period commencing on the first day of April, 1980 and ending with the 23rd day of April, 1981 shall not be taken into account. "the petitioner's contention is that this concession is for a certain period to wit for a period of 7 years since the date of the first clearance of tyres from any factory. It is common ground that other conditions envisaged under the said Notification are satisfied by the petitioner. THE petitioner is a factory in which tyres are manufactured; it is a new industrial undertaking licensed under Section 11 of the Industries (Development and Regulations Act, 1951. From the petitioner's factory clearances of tyres were effected for the first time on 25-1-1984, i. e. during the period commencing on the 1st of April, 1976 and ending with the 31st day of march, 1984. Thus, the petitioner claims that it is entitled to have the concession for a period of 7 years with effect from 25-1-1984, under the doctrine of promissory estoppel. This concession is referred to in the prospectus and indeed, it is averred,'in view of this excise duty concession extended by the Notification duly issued under R8 (1) of the Excise rules, the petitioner applied for an industrial licence for setting up an undertaking for the manufacture of tyres and tubes for two wheelers and three wheelers'. On the strength of the said industrial licence and relying upon the Notification which assured the petitioner of the excise duty concession, the petitioner made a public issue of capital on 15-7-1983 through a prospectus, dated 6-6-1983. In the said prospectus, excise duty concession to which the petitioner was entitled under Notification No. 268/82 was also set out as the incentive and concession available to the company. Through in the counter, the petitioner was put to strict proof of these averments, the learned Counsel for the respondents never challenged these statements. Even otherwise, the petitioner's typed set contains documents to support the above circumstances relied on by the petitioner; further in the course of arguments, the prospectus was produced before me.

(3.) THE further contention advanced by the learned Counsel for the respondents that no promise was given by the respondents to the petitioner, is equally untenable for the simple reason that the exemption was issued under sub-rule (1) of Rule 8 of the Rules.