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Home Case Index All Cases Central Excise Central Excise + SC Central Excise - 2005 (9) TMI SC This

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2005 (9) TMI 80 - SC - Central Excise


  1. 2020 (10) TMI 746 - SC
  2. 2019 (9) TMI 791 - SC
  3. 2018 (2) TMI 115 - SC
  4. 2017 (5) TMI 496 - SC
  5. 2016 (9) TMI 408 - SC
  6. 2015 (5) TMI 500 - SC
  7. 2015 (4) TMI 814 - SC
  8. 2014 (9) TMI 585 - SC
  9. 2014 (2) TMI 549 - SC
  10. 2024 (8) TMI 1304 - HC
  11. 2024 (8) TMI 391 - HC
  12. 2023 (11) TMI 1111 - HC
  13. 2022 (12) TMI 1336 - HC
  14. 2022 (12) TMI 810 - HC
  15. 2022 (3) TMI 1315 - HC
  16. 2022 (4) TMI 202 - HC
  17. 2022 (1) TMI 309 - HC
  18. 2020 (8) TMI 854 - HC
  19. 2020 (4) TMI 499 - HC
  20. 2019 (12) TMI 1013 - HC
  21. 2019 (7) TMI 136 - HC
  22. 2019 (6) TMI 1076 - HC
  23. 2018 (9) TMI 885 - HC
  24. 2018 (8) TMI 2016 - HC
  25. 2018 (5) TMI 652 - HC
  26. 2017 (12) TMI 1238 - HC
  27. 2017 (12) TMI 638 - HC
  28. 2017 (11) TMI 494 - HC
  29. 2017 (9) TMI 1997 - HC
  30. 2017 (6) TMI 1105 - HC
  31. 2016 (7) TMI 1074 - HC
  32. 2016 (5) TMI 1384 - HC
  33. 2016 (5) TMI 1074 - HC
  34. 2016 (2) TMI 175 - HC
  35. 2016 (1) TMI 1210 - HC
  36. 2015 (8) TMI 742 - HC
  37. 2015 (11) TMI 262 - HC
  38. 2015 (3) TMI 986 - HC
  39. 2014 (11) TMI 1007 - HC
  40. 2013 (11) TMI 482 - HC
  41. 2013 (8) TMI 606 - HC
  42. 2013 (6) TMI 362 - HC
  43. 2012 (12) TMI 1143 - HC
  44. 2012 (7) TMI 190 - HC
  45. 2012 (6) TMI 816 - HC
  46. 2014 (2) TMI 550 - HC
  47. 2012 (1) TMI 180 - HC
  48. 2011 (12) TMI 175 - HC
  49. 2010 (12) TMI 237 - HC
  50. 2010 (12) TMI 1182 - HC
  51. 2010 (12) TMI 997 - HC
  52. 2010 (3) TMI 1146 - HC
  53. 2009 (10) TMI 925 - HC
  54. 2009 (10) TMI 58 - HC
  55. 2009 (6) TMI 624 - HC
  56. 2006 (8) TMI 370 - HC
  57. 2005 (12) TMI 88 - HC
  58. 2020 (2) TMI 359 - AT
  59. 2019 (11) TMI 1012 - AT
  60. 2017 (10) TMI 1181 - AT
  61. 2016 (12) TMI 1175 - AT
  62. 2016 (1) TMI 1349 - AT
  63. 2015 (12) TMI 1893 - AT
  64. 2015 (11) TMI 1788 - AT
  65. 2014 (11) TMI 1062 - AT
  66. 2014 (10) TMI 323 - AT
  67. 2010 (9) TMI 16 - AT
Issues Involved:
1. Exemption Notification No. 32/99-C.E. dated 8th July 1999
2. Withdrawal and Reintroduction of Exemption
3. Refund of Excise Duty
4. Constitutionality of Section 154 of the Finance Act, 2003
5. Retrospective Operation of Section 154
6. Procedural Requirements under Section 11A of the Central Excise Act, 1944
7. Discrimination Against Cigarette Manufacturers

Issue-wise Detailed Analysis:

1. Exemption Notification No. 32/99-C.E. dated 8th July 1999:
The dispute arises from an exemption granted by the Central Government to new industries via Notification No. 32/99-C.E., dated 8th July 1999, under Section 5A of the Central Excise Act, 1944. This notification exempted all excisable goods from duty if produced by new industrial units that commenced commercial production on or after 24th December 1997 in specified areas. The exemption was for 10 years, with manufacturers required to pay excise duty and subsequently claim a refund.

2. Withdrawal and Reintroduction of Exemption:
The exemption was withdrawn on 31st December 1999 by Notification No. 45 of 1999 but reintroduced on 17th January 2000 by Notification No. 1 of 2001. Petitioners set up units in specified growth centers and initially received the benefit of the notification. However, from July to October 2000, refunds were not provided, leading to writ petitions in the Gauhati High Court, which directed provisional refunds. The exemption was finally withdrawn in January 2001.

3. Refund of Excise Duty:
Assistant Commissioners rejected refund claims for July 2000 to January 2001 and ordered recovery of amounts already refunded from April to June 2000. They argued that units without a Permanent Registration Certificate could not legally commence production, rendering earlier refunds unjust.

4. Constitutionality of Section 154 of the Finance Act, 2003:
Section 154 retrospectively amended Notification No. 32/99, excluding cigarettes from the exemption from 8th July 1999. This meant previously refunded excise duties would be recoverable, and no further refunds would be made. Petitioners challenged Section 154 as unconstitutional, arguing it violated Articles 14 and 19 of the Constitution due to its retrospective nature and financial burden.

5. Retrospective Operation of Section 154:
The Court held that retrospective legislation must not be unduly oppressive or confiscatory. The context of Section 154 was to correct the unintended benefits granted to cigarette manufacturers, who did not contribute to the State's economic welfare as intended. The retrospective effect was less than two years, and the dispute over refunds was ongoing, making the financial burden foreseeable.

6. Procedural Requirements under Section 11A of the Central Excise Act, 1944:
Petitioners argued that Section 154 violated Section 11A, which requires notice for recovery of duties. The Court noted that refunds under the exemption notifications were not "normal" refunds under the Act but special provisions. Therefore, Section 154(4) allowed recovery independently of Section 11A.

7. Discrimination Against Cigarette Manufacturers:
The Court rejected claims of unfair discrimination against cigarette manufacturers, noting the high revenue from excise duties on cigarettes and the legislative presumption of constitutionality. The retrospective withdrawal of exemptions was justified as it corrected the misuse of benefits by cigarette manufacturers.

Conclusion:
The Court upheld the constitutional validity of Section 154, dismissed the transferred writ petitions, and emphasized that the retrospective operation, though potentially harsh, was justified by the need to correct the unintended benefits and ensure the State's economic welfare.

 

 

 

 

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