LAWS(MPH)-1989-4-2

DHAR CEMENT LTD Vs. UNION OF INDIA

Decided On April 04, 1989
DHAR CEMENT LTD. Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution of India seeking a writ, order or direction in the nature of mandamus and for incidental and consequential relief against the respondents, on the ground that the respondents have wrongly withdrawn the rebate in Central Excise duty to which the mini cement plant of the petitioner No. 1 company is entitled.

(2.) THE petitioner No. 1 M/s. Dhar Cement Ltd. (hereinafter referred to as the Company) is a public limited company duly registered with the Registrar of Companies M. P. Gwalior under the Companies Act, 1956 and has its registered office at 50, Sitlamata Bazar, Indore, The Company is carrying on the business of manufacture of cement in its mini cement plant situated at village Karondiya, District Dhar, M. P. The petitioner No. 2 is one of the promoters as well as share holder of the Company and has also been appointed its Managing Director. According to the petitioners, on the representation, assurances and promises made by the respondents, the cement manufactured by the petitioner Company's mini Cement plant is entitled to rebate in the payment of excise duty upto 50 per cent for a period of five years from the commencement of its production. As the mini cement plant has commenced its production from 1-2-1985, the company is entitled to the rebate in excise duty upto January, 1990. However, the respondents have arbitrarily restricted the grant of the said rebate to the period upto 31-3-1984 by a notification issued in May, 1979. Against the said notification all the manufacturers of cement through mini cement plants throughout the country made representations to the respondents. The Government of India made a statement in the Parliament in December, 1981 that the mini cement plants in the country have been exempted from the operation of distribution control under the cement Control Order 1967 and a rebate in the payment of excise duty upto 50 per cent from the date of commencement of the production has been provided to the mini cement plants. By this public statement solemnly made in Parliament by the then Minister of Industry in December, 1981, the respondents expressly disvowed their earlier notification of May, 1979 restricting the grant of the said rebate to the period ending 31-3-1984 and clarified and affirmed their true policy and intent, namely to grant the said rebate for a period of five years from the date of commencement of production.

(3.) HOWEVER, despite the aforesaid assurances made in the Parliament the respondents had declined to grant the rebate to the petitioner Company, upon which in August, 1987 the All India Mini Cement Manufacturers Association, including the petitioners, made a representation to the respondents, but the respondents refused to honour their representations and assurances aforesaid. As a result, the mini cement plants, including the petitioner Company are in dire financial straits affecting their fundamental right to carry on the business. The petitioners have enumerated the circumstances under which normally a period of 5 or 6 years is spent in establishing a mini cement plant. The petitioners have also illustrated the time consumed by some companies in Rajasthan, Maharashtra and Gujarat in establishing the cement plants. On the basis of the aforesaid the petitioners aver that if the exemption sought to be given to the mini cement plant was for a particular date the declaration and assurances of the respondents was meaningless and acting on the assurance if a company takes steps for establishing a mini cement plant normally a time of 5 to 6 years shall be consumed in the completion of the plant itself. Therefore, when on the basis of the assurance a mini cement plant is established and its production starts, the period for exemption itself expires. Therefore, reading the assurance along with the factual position, it is clear that the assurance given by the respondents to give rebate in excise duty to the mini cement plants is for five years from the date of the plant going into production and not five years from the date of the notification. As such, from the doctrine of promissory estoppel the petitioners are entitled to get the rebate in the central excise duty for a period of five years from the date of production.