1972 (3) TMI 103 - HC - Central Excise

Summary

Issues:
1. Validity of demand issued under rule 10-A of the Central Excise Act
2. Entitlement of petitioners to exemption under notification No. 131 of 1962

Analysis:

Issue 1: Validity of demand under rule 10-A
The petitioners challenged the demand issued under rule 10-A, contending that the rule itself is ultra vires the provisions of the Central Excise Act. The court referred to a previous decision where a similar rule was held to be ultra vires due to lack of statutory backing. The Central Government Standing Counsel did not seek to sustain the demand under rule 10-A but argued for rule 9(2) instead. However, the court held that rule 9(2) could not be invoked in this case based on previous judgments. Ultimately, the court deemed the demand invalid as rule 10-A could not be applied, leading to the allowance of the writ petition.

Issue 2: Entitlement to exemption under notification No. 131 of 1962
The petitioners claimed entitlement to exemption under a specific notification dated 13th June 1962. The notification exempted certain iron and steel products from excise duty but excluded manufacturers applying for a license after the mentioned date. The court found that the license issued is personal to the licensee and not transferable, making the transferees new licensees after the crucial date specified in the notification. Since the petitioners applied for a license after the cutoff date, they were not eligible for the exemption as per the second proviso of the notification. Consequently, the court ruled against the petitioners' claim for exemption.

In conclusion, the court allowed the writ petition as the demand could not be sustained under rule 10-A or rule 9(2). The petitioners were denied the exemption under the notification due to applying for a license post the specified date. No costs were awarded in the judgment.