MEWAR SUGAR MILLS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) BY this writ petition, the petitioner seeks to quash the order dt. 21st August, 1981 passed by the respondents and to direct the respondents to refund the amount of duty already paid by the petitioner for the period February, 1981 to June, 1981. The petitioner has also prayed for a writ or order prohibiting the respondents from collecting any excise duty under Item 15CC of the 1st Schedule to the Central Excises and Salt Act, 1944 and has further prayed for declaring the amending Notification No. 20/82 dt. 20 -2 -1982 and Section 51 of the Finance Act ultra vires of the Constitution whereby Rules 9 and 49 of the Central Excise Rules have been amended.

(2.) THE petitioner No. 1 M/s. Mewar Sugar Mills Ltd. (hereinafter referred to as the petitioner Company) is an existing company which manufactures sugar through vacuum pan process and also manufactures alcohol in distillery. The petitioner company in the process of manufacture of sugar, crushes sugarcane and extracts juice from it, which after passing through certain processes goes to centrifugal in the form of 'Massecuite' whereby centrifugal force white crystal sugar is separated and along with other waste material burnt sugar, which is known as molasses, is produced as a by -product. Earlier the molasses was a non -excisable product but on 1st March, 1975, the Union Government for the first time imposed excise duty on the manufacture and production of molasses under Item No. 68 of First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to be as the Act). On 30th April, 1975, a subsequent Notification No. 118/75 was issued by the Central Government whereby it has exempted molasses from payment of excise duty manufactured in a factory and intended for use in the factory in which it is manufactured or in any other factory of the same manufacturer. By the Finance Act, 1980 w.e.f. 18th June, 1980, the Central Government included molasses in the First Schedule to the Act as Item No. 15C and levied excise duty on molasses @ Rs. 30/ - per Metric ton. During the pendency of the writ petition by Section 51 of the Finance Act, 1982, Rules 9 and 49 of the Central Excise Rules have been amended by which the manufacturer is required to pay the excise duty on every intermediate stage and this amendment has been given retrospective effect from 28 -7 -1944, and the petitioner by an amended writ petition has also challenged vires of Rules 9 and 49 of the Central Excise Rules.

(3.) MR . Choudhary, learned counsel appearing for the Union of India has submitted that this case is squarely covered by the decision of their lordships of the Supreme Court in J.K. Cotton Spinning and Weaving Mills Ltd. v. Union of India [1987 (32) E.L.T. 234 (SC) : 1987 (Suppl.) SCC -350]. He has also relied on Oudh Sugar Mills Ltd. and Ors. v. UOI through Secretary Ministry of Finance (W.P. No. 3662/1980, decided on 13 -4 -1981) [1982 (10) E.L.T. 937 (All.), Khandelwal Metal and Engg. Works and Anr. v. UOI [1985 (20) E.L.T. 222 (SC)] and Kesar Sugar Mills v. UOI [1983 (12) E.L.T. 285]. On the other hand Shri Shishodia contends that an S.L.P. is already pending with the Apex Court against judgment in Oudh Sugar Mills case (supra).