GODFREY PHILIPS INDIA LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners - M/s. Godfrey Philips India Limited (hereinafter the company) - are engaged in the business of manufacture of cigarettes. On the said cigarettes excise duty is payable on and valorem basis under the Central Excises and Salt Act, 1944 (hereinafter the Act). Under section 2(f) of the Act :

(2.) By Notification No. 201 of 1979 dated 4th June 1979, the Central Government introduced a set-off procedure for the duty of excise payable on goods falling under Tariff Item No. 68 of the Act, where the said goods went into the manufacture of other excisable goods. The said notification is as follows :

(3.) In accordance with the requisite procedure, the company duly submitted from time to time declarations with regard to specific (inputs) namely, tear tape, slides, shells and printed cartons i.e. others/blanks used in the packing of cigarettes and these (inputs) were accepted by the respondents as necessary (inputs) in the manufacture of cigarettes. The company was accordingly availing of the set-off under the aforesaid notification. However, and for the first time, by this letter of 10th June 1981, the third respondent informed the company that the packing material viz., tear tape, slides, shells and printed cartons i.e. outers/blanks used in the packing of cigarettes could not be called 'inputs' and that the company could not avail itself of the set-off procedure under the notification and credit under the set-off procedure was disallowed with retrospective effect. Correspondence ensued but to no avail. The company was asked to strictly follow the instructions issued in the aforesaid letter of 10th June 1981. And ultimately, the third respondent - Superintendent of Central Excise - demanded payment of duty as per his notice of demand dated 25th September 1981 and annexure thereto. Hence this petition.