2023 (4) TMI 259 - HC - Central Excise

Area Based Exemption - Inclusion of the commodities produced by it i.e. kraft paper (4804.90) and printing and writing paper (4802.90) in negative list vide Notification dated 27.6.2008 - whether the products manufactured by petitioner were included in the negative list right from the inception and if not so, whether the benefits of fiscal incentives could be denied to the petitioner by giving retrospective effect to notification dated 27.06.2008 issued by respondent No.1? - entire thrust of attack in the petition is on the amendment carried in the negative list by respondent No.1 by way of amending notification dated 27.06.2008. HELD THAT - The negative list made specific inclusion of products by their excise classifications. The products of kraft paper and printing and writing paper included in negative list had their particular species, which definitely did not include product as manufactured by the petitioner. This action becomes evident from the fact that respondent No.1 had to include the remaining types of kraft papers as well as printing and writing paper in the category of Others under excise classifications 4802.90 and 4804.90 by amending Office Memorandum dated 07.01.2003, firstly by bringing out Office Memorandum dated 21.06.2005 and thereafter by way of impugned notification dated 27.06.2008. The fact of the matter is that Office Memorandum dated 07.01.2003 had been followed by notification dated 08.01.2003 extending benefit of subsidy in capital investment and further notifications No.49 and 59 dated 10.06.2003, whereby the benefit of exemption or payment of excise duty was extended. All these notifications had appended or annexed a negative list each with them. These negative lists were in identical terms as Office Memorandum dated 07.01.2003. These notifications were not amended. Similarly, appendice attached to said notifications specifically the negative lists remained the same. Thus, the benefit extended by these notification(s) remained available to all eligible industrial units save and except those mentioned in the negative list - the products manufactured by the petitioner were not mentioned in the negative list(s) annexed with all these notifications. The entire thrust of attack in the petition is on the amendment carried in the negative list by respondent No.1 by way of amending notification dated 27.06.2008. There is not even a whisper that petitioner had ever made any claim to the respondents under the notifications dated 08.01.2003 and 10.06.2003 and the respondents had denied such claim(s). In the absence of such averments, the petitioner cannot be held to have made out a case for itself to seek indulgence of this Court. This petition is disposed off by holding that the petitioner has failed to make out any cause of action for seeking reliefs as prayed by way of instant petition.

Summary

Issues Involved:
1. Validity of Notification dated 27.06.2008.
2. Eligibility for fiscal incentives under Office Memorandum dated 07.01.2003 and subsequent notifications.

Summary:

1. Validity of Notification dated 27.06.2008:
The petitioner sought to quash the notification dated 27.06.2008, which included their products in the negative list, arguing it was illegal, bad in law, and null and void. The court noted that the negative list initially did not include the petitioner's products (kraft paper and printing and writing paper) under excise classifications 4804.90 and 4802.90. These classifications were added to the negative list only via the Office Memorandum dated 21.06.2005 and the subsequent notification dated 27.06.2008. The court emphasized that the Office Memorandum dated 07.01.2003 and the notifications dated 08.01.2003 and 10.06.2003 did not originally include the petitioner's products in the negative list, and these notifications were not amended. Therefore, the court held that the products manufactured by the petitioner were not included in the negative list from the inception, and the benefits of fiscal incentives could not be denied by giving retrospective effect to the notification dated 27.06.2008.

2. Eligibility for Fiscal Incentives:
The petitioner argued that they were entitled to fiscal incentives based on the Office Memorandum dated 07.01.2003 and subsequent notifications, which promised 100% excise duty exemption, income tax exemption, and capital investment subsidy for eligible industries. The court found that the petitioner had undertaken substantial expansion and established new units during the continuance of these incentives. However, the court noted that the petitioner had not provided evidence of any claim made to the respondents under the notifications dated 08.01.2003 and 10.06.2003, nor any denial of such claims by the respondents. Thus, the court concluded that the petitioner failed to make out a case for seeking reliefs as prayed. However, the court allowed the petitioner to approach the respondents for availing necessary benefits under the notifications if permitted by law, and directed the respondents to decide the claims strictly in accordance with the law.

Conclusion:
The petition was disposed of with the court holding that the petitioner's products were not included in the negative list from the inception and the benefits of fiscal incentives could not be denied retrospectively. The petitioner was allowed to approach the respondents for necessary benefits under the notifications, and the respondents were directed to decide the claims in accordance with the law. Pending applications were also disposed of.