1993 (12) TMI 57 - HC - Central Excise

Summary

Issues Involved:
1. Validity of Notification No. 223/87.
2. Applicability of Notification No. 223/87 to the petitioners.
3. Alleged violation of Article 14 of the Constitution.
4. Specific contentions in W.P. No. 7204/1989 and W.P. No. 3805/1989.

Summary:

1. Validity of Notification No. 223/87:
The petitioners challenged Notification No. 223/87, which amended Notification No. 175/86, arguing it was ultra vires the provisions of the Central Excises & Salt Act, 1944, and violated Article 14 of the Constitution. The court held that the power to issue a notification under Rule 8(1) includes the power to amend, vary, or rescind it, as per Sec. 21 of the General Clauses Act. The court emphasized that flexibility in taxation is necessary and that the power to amend a notification should be read with the power to issue it. The amendment was deemed valid as long as it fell within the scope of the original power.

2. Applicability of Notification No. 223/87 to the Petitioners:
The petitioners contended that the second notification excluded them from the exemption because they used the brand name/trade name of another person. The court clarified that the exemption conditions could consider the circumstances of the manufacturer. The court noted that goods with brand names have special market value and that the exemption's purpose was to benefit SSI Units struggling to establish their market presence. The court rejected the argument that the notification was ultra vires Rule 8, stating that the conditions for exemption could relate to the status of the manufacturer.

3. Alleged Violation of Article 14 of the Constitution:
The petitioners argued that the denial of exemption was arbitrary and violated Article 14. The court held that fiscal regulations must satisfy Article 14 but allowed greater latitude in classifying subjects for taxation. The court found that SSI Units using brand names of others are a distinct class with market advantages, justifying the classification. The court concluded that the classification was not arbitrary and was based on relevant considerations, rejecting the contention of discrimination.

4. Specific Contentions in W.P. No. 7204/1989 and W.P. No. 3805/1989:
- W.P. No. 7204/1989: The petitioner, manufacturing stainless steel items for Indian Railways, contended that the identification mark of the Railways did not indicate a trade connection. The court suggested that this legal question should be agitated before statutory authorities and allowed the petitioner to file an appeal within sixty days.
- W.P. No. 3805/1989: The petitioner challenged an adjudication order dated 29-11-1988. The court directed the petitioner to file an appeal within sixty days, allowing the appeal to be entertained without reference to the bar of limitation.

Conclusion:
All writ petitions were dismissed, with the court providing specific liberties to the petitioners to pursue their contentions through statutory appeals.