2014 (11) TMI 616 - HC - Central Excise

Levy of NCCD while allowing area based exemption - Exemption under Notification No.50/2003 dated 10th June, 2003 - Imposition of National Calamity Contingent Duty (NCCD), Education Cess, Secondary & Higher Education Cess, interest and penalty - Held that - Exemption granted by a notification must be read limited to the duty of excise as mentioned in the notification, and by simple interpretation it cannot be extended to cover any other kind of excise duty. Moreover, the petitioner is getting and is availing benefit of exemption notification 50/2003. The petitioner is not aggrieved by any condition contained in the notification nor there is any challenge to the notification - writ petition lacks merit - Decided against assessee.

Issues Involved:
1. Scope of Notification No. 50 of 2003 under Section 5A of the Central Excise Act, 1944.
2. Applicability of National Calamity Contingent Duty (NCCD) exemption.
3. Maintainability of writ petition against a show cause notice.
4. Interpretation of implementing notifications in the context of Industrial Policy.
5. Doctrine of promissory estoppel.

Detailed Analysis:

1. Scope of Notification No. 50 of 2003 under Section 5A of the Central Excise Act, 1944:
The core issue pertains to the scope of Notification No. 50 of 2003, which grants area-based exemptions in respect of certain duties of excise. The petitioner contends that the notification should be interpreted to include NCCD as part of the excise duty exemptions. However, the court held that the notification must be read in plain and simple terms, and it does not expressly include NCCD within its scope. The court cited the Supreme Court's decision in CCE vs. Hari Chand Sri Gopal & others, emphasizing that exemption notifications must be interpreted strictly based on the language employed.

2. Applicability of National Calamity Contingent Duty (NCCD) exemption:
The petitioner argued that the 100% excise duty exemption under the Industrial Policy should include NCCD. However, the court found that the implementing notification did not explicitly exempt NCCD. The court referred to the Amendment and Validation Act of 1982, which clarified that exemption notifications under the Central Excises and Salt Act do not automatically extend to duties imposed under other laws, such as the Finance Act, 2001, unless expressly stated. Thus, NCCD was not exempt under Notification No. 50 of 2003.

3. Maintainability of writ petition against a show cause notice:
The petitioner challenged the show cause notice on the grounds that it was issued with a predetermined mindset and that responding to it would be futile. The court rejected this argument, stating that a show cause notice is tentative and not decisive. The court also noted that the petitioner had an alternative remedy available through the appellate process. However, the court heard the petition on merits since it had already been admitted.

4. Interpretation of implementing notifications in the context of Industrial Policy:
The petitioner argued for a liberal interpretation of the implementing notification in light of the Industrial Policy, which promised 100% outright excise duty exemption. The court, however, held that the notification should be interpreted based on its clear language and not extended to include duties not expressly mentioned. The court cited the Supreme Court's decision in Novopan Indian Ltd., which established that exemption provisions must be strictly construed.

5. Doctrine of promissory estoppel:
The petitioner invoked the doctrine of promissory estoppel, arguing that the government should be bound by its promise of 100% excise duty exemption. The court found that the petitioner did not act upon the policy decision dated 07.01.2003 but rather relied on Notification No. 50 of 2003. Therefore, the doctrine of promissory estoppel was not applicable. The court emphasized that for promissory estoppel to apply, the promisee must have altered their position based on the promise, which was not the case here.

Conclusion:
The court dismissed the writ petition, concluding that the petitioner was not entitled to an exemption from NCCD under Notification No. 50 of 2003. The court emphasized the need for strict interpretation of exemption notifications and found no basis for applying the doctrine of promissory estoppel. The petitioner's arguments on liberal interpretation and the futility of responding to the show cause notice were also rejected.

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