AGARWAL INDUSTRIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners M/s. Agarwal Industries Limited, Industrial Area, Azamabad, Hyderabad, have filed the present writ petition for a writ of mandamus restraining the respondents from giving effect to Notification No. 39/89-C.E. (NT), dated 25-8-1989 prior to 30-8-1989 and to permit the petitioner to utilize the unavailed credit which was accumulated on the use and hydrogenation of rice bran oil prior to 30-8-1989.

(2.) Vanaspati (hydrogenated vegetable oil) is normally manufactured from conventional oils. To encourage use of minor oils, the Central Government introduced in 1986-87 a scheme of rebate in excise duties for Vanaspati and soap linked to user of minor oils like rice bran oil, mahuva oil, water-melon seed oil etc. The Central Government inserted on 1-3-1987 Section AAA containing Rules 57K to 57P in Chapter V of the Central Excise Rules. On that date the Government also issued notification under Rule 57-K viz., Notification No. 27/1987 and Notification No. 40/1987 specifying the final products, minor vegetable oils and rates at which credit was to be given for use of such minor oils in manufacture of Vanaspati. Notification No. 40/1987 was, however, superseded by Notification No. 192/1987-C.E., and the said notification was subsequently amended by Notification No. 17/88-C.E., dated 1-3-1988.

(3.) The case of the petitioners in the writ petition was that in pursuance of the scheme brought in by Notification No. 27/1987, the petitioners were entitled to credit of money and that credit of money can be taken on completion of hydrogenation of such minor oils after following certain other procedure prescribed under the Notification. The credits so taken will be available for utilisation under the scheme only after the commencement of the succeeding month. This quantum of oil used in the manufacture of Vanaspati and the credit utilised for payment of duty on Vanaspati cleared should not exceed Rs. 1000.00 per metric ton. The excise duty payable on Vanaspati was Rs. 1900.00 per metric ton and, therefore, the manufacturer will have to pay a minimum of Rs. 900.00 per metric ton of Vanaspati cleared from other sources.