1996 (4) TMI 138 - HC - Central Excise

Summary

Issues:
1. Interpretation of provisions relating to exemptions in various notifications.
2. Clubbing of clearances of various firms for exemption limit.
3. Treatment of loan licensees as separate manufacturers for exemption limit.
4. Appeal against order of adjudication and jurisdiction of CEGAT.

Analysis:

1. The High Court considered writ appeals against a common order related to the interpretation of provisions in various notifications regarding exemptions. The learned single Judge had negatived the contention that loan licensees should be treated as separate or independent manufacturers. The Division Bench upheld the decision, emphasizing that the determination of exemption criteria is within the prerogative of the Legislature or the executive, and courts cannot interfere in such matters. The Court affirmed the dismissal of the writ petitions, stating that the impugned notification applied to all covered entities, and courts cannot question the government's policy decisions regarding exemptions.

2. The Court addressed the issue of clubbing clearances of various firms for the exemption limit under Notification No. 175/86. The contention was that loan licensees should be treated as different manufacturers for the exemption limit. The circular clarified that different firms would be considered different manufacturers for the exemption limit. The Court noted that if there is an independent unit within the factory premises not connected with the petitioners, it should be proven before the adjudicating authorities. The Court agreed with the learned single Judge's view that this contention must be proved in each case.

3. The Court rejected the argument that the contentions decided in the writ petitions should be kept open for appeal before CEGAT. It clarified that the writ petitions challenged show cause notices and the provisions of exemptions in the notifications. As the adjudication was based on the findings in the writ petitions, the Court saw no reason to allow the petitioners to raise the same grounds before CEGAT. The writ appeals were dismissed, and the connected CMPs were also dismissed.

4. In conclusion, the High Court upheld the decisions of the learned single Judge and the Division Bench regarding the interpretation of exemption provisions in notifications. The Court emphasized the government's discretionary power in granting exemptions and affirmed that loan licensees cannot be treated as separate manufacturers for exemption limits. The Court also clarified the jurisdiction and scope of appeal before CEGAT, dismissing the writ appeals and connected CMPs.