INDIAN CHARGE CHROME LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) PETITIONER No. 1 is a Public Limited Company and petitioner No. 2 is a shareholder of the company. They have filed this writ application to declare the amendment made on 1st of May, 1986, to the Notification No. 133/85 Customs, as well as the Notification No. 67/87 Cus toms, dated 1 3 1987 to be constitutionally invalid being discriminatory in nature and have further prayed to quash the order of the Assistant Collector of Customs, Paradeep, dated 17th of August, 1987, annexed as Annexure 3, by which order the said Assistant Collector has cancelled the registration of the project contract/85 86. Under the Notification No. 133/85 Customs, dated 19th of April, 1985, which has been issued by the Central Government in exercise of power conferred under Sub section (1) of the Section 25 of the Customs Act, an Explanation has been added and under the explanation the expression 'Powered Projects' shall mean,

(2.) PETITIONER 's case in a nutshell is that petitioner No. 1 manufactures high carbon ferro chrome/charge chrome as a 100 per cent Export oriented unit. In accordance with the policy of the Union Government and as the normal supply of power in the State of Orissa practically crippled the industry, a Letter of Intent was granted in favour of petitioner No. 1 to set up a captive power plant for generation of power. It entered into two separate contracts dated 28 9 1984 with Gotaverken Energy System and Asea Stal. Under the Customs Tariff Act, 1975, the Central Government has enacted the Project Import (Registration of Contract) Regulations, 1965 (hereinafter referred to as the 'Regulations'). Under the aforesaid Regulations, an improper claiming assessment of articles falling under any of the sub headings of Heading No. 84.66 on their importation has to apply to the proper officer of the Customs at the Port where the goods are to be imported, for registration of the contract, as provided in Regulation 3(2) of the Regulations. Under Regulation 4, the Proper Officer will have to examine the application and be satisfied and will then register the contract by entering the particulars thereof in a book kept for the purpose and assign a number in token of registration and communicate the number to the importer. The said Regulations have been annexed as Annexure 4 to the writ application. Sub heading No. 84.66 of Section XVI of Chapter 84 deals with item of properties. Clause (d) thereof provides :

(3.) THE opposite parties have filed a counter affidavit being sworn to by the Assistant Collector, Central Excise and Customs (Law). The stand of the opposite parties is that power having been conferred upon the Central Government to grant exemption on being satisfied that it is necessary in public interest so to do, it has the power to modify an exemption notification either wholly or partially. Such exemption being within the exclusive discretion of the Central Government, the same is immune from being challenged as an unreasonable restriction under Article 19(g) of the Constitution. That apart, the exemption notification really intended to exempt those projects which generate power and supply the same to the consumers, but it was not intended to confer any benefit to the industrialists who have set up captive power plants for running their own factories whose end product is something else than power and, therefore, though the original notification did not contain any such explanation and brought within itself all the power projects, but by amendment an explanation was added restricting the exemption only in respect of those power projects which generate power and distribute power to others and, therefore, it is a reasonable classification having a reasonable nexus with the object of exemption and the same cannot be said to be arbitrary or discriminatory. So far as the letter of the Assistant Collector under Annexure 3 is concerned, the stand taken in the counter affidavit is that since the petitioner's contracts with the two firms in relation to setting up of a captive power plant do not come within the purview of the amended notifications, and the customs authorities have on an erroneous impression granted registration, the said registration had been cancelled and the petitioner's application dated 28th of January, 1986, has not been allowed and there is no illegality in the same.