ASSAM BROOK LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) All the cases under consideration having raised common questions of law on identical facts were heard together and are being disposed of by this common judgment and order.

(2.) Pursuant to a policy decision of the Government of India to provide incentives for development of industries in the North-eastern region an Office Memorandum dated 24th of December, 1997 was issued by the Ministry of Industries, Govt. of India promulgating a new industrial policy/concessional package for development of industries in the Northeastern States of the country. Amongst the different incentives and concessions announced, exemption from Central Excise in respect of industrial activities relating to manufacture of tea in the North-eastern States for a period often years, as contained in the Office Memorandum dated 24th December, 1997 is the subject matter of consideration in the present bunch of writ petitions. The petitioners are manufacturers of tea classifiable under Chapter 9 heading 09.02 sub-heading 09.02.00 of the Central Excise Tariff Act, 1985. Central excise on tea and tea waste falling under the heading and sub-headings noted above, on the date of the issuance of the O.M. dated 24.12.1997 was nil. With effect from the mid-night of 27th/28th February, 1999 excise duty at the rate of Rs. 2 per kilogram of bulk tea was introduced. As the levy was not accompanied by any exemption thereof to manufacturers of tea in the North-eastern Region, a series of writ petitions were filed before this Court. During the pendency of the aforesaid writ petitions, a Notification bearing No. 33 of 1999 was issued on 8.7.1999 exempting, amongst others, tea cleared from a unit located in any of the Northeastern States from the duty of excise leviable under the provisions of the Central Excise Act, 1944; Additional Duty of Excise (Goods of Special Importance) Act, 1957 and Additional Duties of Excise (Textile and Textile Articles) Act, 1978. The aforesaid Notification No. 33 of 1999, issued under the relevant provisions of the statutes in question empowering the Central Govt. to grant exemptions, contemplated payment of duty by the manufacturer in the first instance and refund thereof, upon due verification, in the manner specified in the Notification. Pursuant to the Notification No. 33/99 refund of duty paid by the manufacturers of tea like the petitioners were granted. In the meantime by the Finance Act of 2002 the duty leviable on tea and tea- waste was brought down to Rs. 1 per kilogram. Thereafter, pursuant to the budget speech of the Hon'ble Finance Minister of the Union for the financial year 2003-04, an exemption Notification No. 6 of 2003 was issued exempting tea from the excise duty leviable and instead, an additional duty of excise, by way of surcharge, at the rate of Rs. 1 per kg. was introduced by Section 157 of the Finance Act, 2003. The duty imposed, thereafter, was included in the First Schedule to the Tariff Act of 1985. The demand of the manufacturers of tea for refund of the aforesaid additional duty of excise under Notification No. 33/99 having been turned down by the respondents on the ground that such refund is not covered by the said Notification No. 33/99 and further as the levy of additional excise duty by the Finance Act of 2003 is for the purposes of creation of a special fund for development of the tea industry, the instant writ petitions have been filed seeking appropriate intervention of the Court in the matter so as to facilitate the refund of the additional duty of excise levied and paid by the manufacturers.

(3.) The arguments advanced on behalf of the petitioners by Sri K.N. Choudhury, learned senior counsel and the resistance offered on behalf of the Union by Sri B. Sarma, learned Additional C.G.S.C. has been elaborate and reliance has been placed by the respective counsels on several case laws. The arguments and counter-arguments advanced disclose two primary questions that would call for answers from this Court in the present bunch of cases. The first is whether additional duty of excise levied by way of surcharge with the avowed object of creating a special fund for the development of the tea industry is covered by the exemption Notification No. 33 of 1999 so as to entitle the manufacturers to a refund of the said duty. A negative answer to the above question for the Court would require consideration of the further issue as to whether the petitioners would be entitled to exemption from the duty imposed/ refund thereof on the basis of the claimed promise of exemption from excise duty in terms of the policy resolution of the Government dated 24th of December, 1997. Having noticed what must be answered, the Court may now proceed to perform the required exercise in the light of the arguments advanced and the judicial precedents cited at the Bar.