GTC INDUSTRIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Article 226 of the Constitution impugns an order passed by the 2nd respondent viz. the Assistant Collector of Central Excise, rejecting an application for refund of a sum of Rs. 54,40,642.71 ps.

(2.) Petitioners are engaged in the manufacture of cigarettes. They have their factory at Vile Parle Bombay and we are required to pay excise duty on excisable articles produced or manufactured by them as per the rates that prevail under the Central Excise and Salt Act, 1944 (CESAT). The 1st respondent on 1st March, 1979 issued a notification under Rule 8(1) of the Central Excise Rules, 1944 (Rules) granting cigarettes partial exemption from duty of excise leviable vis-a-vis a particular item falling in the first schedule to CESAT. By the notification issued on 30th November, 1982 published in a Gazette of the same date, the exemption granted by the notification dated 1st March, 1979 was rescinded. The Excise department on 14th December, 1982 informed the petitioners in common with other cigarette manufacturers of the withdrawal of exemption granted under the notification of 1st March, 1979. After receipt of the communication there ensued some correspondence between the Excise department and the petitioners. The latter, on October 30, 1984, applied to the 2nd respondent for a refund of the amount which the had been forced to pay pursuant to a demand made by the Excise department officers. Shortly stated, their case was that though the exemption had been rescinded by notification dated November 30, 1982, the said rescinding had came to the knowledge of the petitioners for the first time when they received the letter dated December 14, 1982. It was from the later date that they could be asked to pay the full excise duty. Recovering the full duty from them for the period from November 30, 1982 to December 14, 1982, was not warranted. They were entitled to and sought the refund of the amount which come to Rs. 54,40,645.71 ps. The claim made by the petitioners was negatived by the 2nd respondent and his reasons for so doing which need to be reproduced were as below :---

(3.) Petitioners case is that the exemption would take effect from the date of publication of the notification and that is the requirement of section 38 of the CESAT as also Rule 8 of the Rules. Publication as contemplated by these provisions did not mean mere printing, but availability for perusal by the common people including those in the trade. So far as the petitioners were concerned, they learnt of the withdrawal of the exemption for the first time from the letter dated 14th December, 1982. By a rejoinder they have placed on record a letter addressed by the Controller of Publications, informing another manufacturer of cigarettes of the Gazette in which the notification was published, being made available for sale as from 8 December, 1982. Without prejudice to the claim for refund of the sums claimed in the application made to respondent 2, the rejoinder claim is that in no case, can the respondent retain sums recovered from the petitioners for the period ending with 8th December, 1982. The total rejection of the application for refund was unwarranted and hence the claim for writ to quash the impugned order with a consequential direction to the respondents to pay unto the petitioners the sum of Rs. 54,40, 642.71 ps. The return tendered on behalf of the respondents is to the effect that the notification withdrawing the exemption was published in the Official Gazette on 30th November, 1982. The exemption was not in force after that date. Therefore, whatever be the deficit the petitioners were liable to pay. This liability had been enforced by their Officers, and, rightly so. It was not correct to say that the notification rescinding the exemption came into operation only from 14th December, 1982 or 8th December, 1982.