2002 (5) TMI 61 - HC - Central Excise

Issues Involved:
1. Interpretation of Notification No. 107/81 and Notification No. 88/84.
2. Maintainability of the writ petition vis-a-vis alternative remedy.
3. Territorial jurisdiction of the Court.
4. Applicability and interpretation of Notification No. 107/81.
5. Applicability and interpretation of Notification No. 88/84.

Detailed Analysis:

1. Interpretation of Notification No. 107/81 and Notification No. 88/84:
The core issue revolves around the interpretation of two notifications, namely Notification No. 107/81 and Notification No. 88/84, issued under the Central Excises and Salt Act, 1944. The petitioner, a company engaged in manufacturing tyres, sought benefits under these notifications, which provided excise duty exemptions to encourage investment in tyre manufacturing.

2. Maintainability of the Writ Petition vis-a-vis Alternative Remedy:
The petitioner contended that the excise authorities refused to grant benefits under the notifications. The Court noted that the matter had been pending since 1981, with several proceedings already initiated. Given the long pendency and the fact that the statutory authorities had already determined the issue, the Court decided not to relegate the petitioner to an alternative remedy at this stage. The Court cited the Supreme Court's ruling in Whirlpool Corporation v. Registrar of Trade Marks, which allows writ petitions despite alternative remedies in cases of jurisdictional errors or violation of fundamental rights.

3. Territorial Jurisdiction of the Court:
The respondent argued that the Delhi High Court lacked territorial jurisdiction, as a related writ petition had been filed in the Rajasthan High Court. However, the Court found that the impugned orders and notifications were issued by the Ministry in Delhi, and part of the cause of action arose within its jurisdiction. The Court referenced previous rulings, including Appollo Tyres Limited v. Union of India, to assert its jurisdiction.

4. Applicability and Interpretation of Notification No. 107/81:
Notification No. 107/81 provided excise duty exemptions for tyres manufactured in factories that commenced clearances between 1st April 1976 and 31st March 1984. The exemption was limited to five years from the date of the first clearance and up to 30% of the capital investment on plant and machinery. The petitioner argued that subsequent investments should also be considered. The Court, however, held that the notification intended to grant a one-time benefit based on the initial capital investment. The Court emphasized that exemption provisions should be construed strictly and cited several Supreme Court rulings, including Union of India v. Modi Rubber Ltd., to support its interpretation.

5. Applicability and Interpretation of Notification No. 88/84:
Notification No. 88/84 provided similar exemptions but included provisions for substantial expansions under Section 13 of the Industries (Development and Regulation) Act, 1951. The petitioner had obtained a separate license for substantial expansion and argued that the exemptions should apply to their expanded factory. The Court agreed, noting that the notification's third proviso, which referred to factories licensed under Section 13, should be read independently of the second proviso. The Court concluded that the exemptions applied to the petitioner's expanded factory, but remitted the matter back to the Assistant Collector for computation of the exact excise duty payable.

Conclusion:
The Court allowed the writ petition to the extent of recognizing the applicability of Notification No. 88/84 to the petitioner's expanded factory, while upholding a strict interpretation of Notification No. 107/81. The matter was remitted back to the Assistant Collector for computation of excise duty in accordance with the Court's interpretation. No order as to costs was made.

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