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TMI Blog2014 (11) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment of India decided to restore the exemption by issuing a Notification No.116/94-CE dated 24.06.1994. But during the period from the date of withdrawal of exemption (1.3.1994) and the date of restoration of exemption (23.06.1994), the petitioner was made to pay the full incidence of Excise Duty. Therefore, the Government of India passed an order dated 24.03.1995, directing refund of the Duty paid during the said period. It is clear that the Government of India was fully aware of the nature of the exemption Notification, the nature of the manufacturing process carried on by the petitioner and the entitlement of the petitioner to the benefit. Being an authority functioning under the Government of India, the second Respondent is bound by the exemption Notification as well as the decision taken by the Government of India way back in 1995. Impugned show cause notice is nothing but an attempt to unsettle what was settled for nearly 24 years. What was settled for 24 years was not merely at the level of the Commissioner of Central Excise but at the level of the Government of India as seen from the ad hoc Notification issued in 1995 directing refund. Therefore, the impugned sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No.12/2012 dated 17.03.2012 was issued granting exemption in respect of more than about 300 items. Serial No.83 of the said Notification also covered the very same item manufactured by the petitioner. Therefore, for the past about 20 years ever since the first exemption Notification was issued in 1989, the 5th Respondent has been enjoying the benefit of the exemption, in respect of whatever is returned to the 5th Respondent. 8. But suddenly the second Respondent issued a notice bearing No.20/2013 dated 07.11.2013, demanding Duty in respect of the Petroleum gas returned to the 5th Respondent during the period from October 2008 to June 2013. Aggrieved by the said notice, the petitioner has come up with the above writ petition. 9. The first and foremost objection taken by the Respondents 1 to 4, to the writ petition is that what is challenged is only a show cause notice and that therefore the petitioner can always give a reply and submit his objections. Even if an order is passed against the petitioner, the petitioner can work out his remedies in accordance with the procedure prescribed by law. 10. Without prejudice to the contention regarding the maintainability of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4). (7)Special Director vs. Mohd. Ghulam Ghouse (MANU/SC/0025/2004) (8)Malladi Drugs and Pharma Ltd., vs. Union of India (UOI) (MANU/SC/0407/2004). (9)Union of India (UOI) vs. Guwahati Carbon Ltd. (MANU/SC/1256/2021). (10)Commissioner of Income Tax vs. Chhabi Dassw Agarwal (MANU/SC/0802/2013. (11)Veerappa Pillai vs. Raman Raman (MANU/SC/0057/1952). 13. In Medopharam, the Division Bench of this Court did not go into the question as to whether no writ petition would lie under any circumstances. 14. In State of Madhya Pradesh, the Supreme Court was concerned with cases arising out of public auctions conducted for the grant of licences for country made liquor. Repeated orders were passed by a learned Judge of the Madhya Pradesh High Court ignoring the nature of the jurisdiction under Article 226 and hence the Supreme court came down upon the High court. I do not know how the said decision is of any assistance to the Respondents. 15. In G.K.N.Driveshafts (India) Limited, the Supreme Court upheld the order of the Delhi High Court rejecting the challenge to the notices issued under Section 148 and 143(2) of the Income Tax Act, 1961. The circumstances under which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there have been notifications for exemption in respect of petroleum gases and other gaseous hydrocarbons falling under Chapter Heading No.27.11. The first exemption Notification was issued on 17.07.1989. In the Second Notification dated 01.03.2006, this item was at Serial Number 29. In the next Notification dated 17.03.2012, this item was at Serial Number 83. In order to understand the nature of the exemption granted, it would be appropriate to extract the Notifications. The first Notification dated 17.07.1989 reads as follows:- In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts petroleum gases and other gaseous hydrocarbons, falling under heading No.27.11 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), (hereinafter referred to as the said gases ), intended for use in the manufacture of polyisobutylene, from so much of the duty of excise leviable thereon, which is specified in the said Schedule, as is in excess of the duty leviable on the quantity of the said gases consumed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation:- For the purposes of the exemption the quantity of the petroleum gases and other gaseous hydrocarbons consumed in the manufacture of polyisobutylene shall be calculated by subtracting from the quantity of the said gases received by the factory manufacturing polyisobutylene the quantity of the said gases returned by the factory to the refinery, declared as such under Rule 20 of the Central Excise Rules, 2002, which supplied the said gases. Nil --- 25. A careful reading of the entries extracted above would show that the main part of the Notification actually contemplated the receipt of petroleum gases and other gaseous hydrocarbons received from the refinery intended for use in the manufacture of polyisobutylene and returned by the factory to the refinery from where the gases came. 26. There is no dispute about the fact that the petitioner receives petroleum gases and other gaseous hydrocarbons from the 5th Respondent, for the purpose of manufacture of polyisobutylene and that after the extraction, the gases and gaseous hydrocarbons are returned to the refinery of the 5th Respondent. 27. The explanations to these entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Sub-rule (2) of Rule 6 reads as follows:- (2) Where a manufacturer or provider of output service avails of CENVAT credit in respect of any inputs or input services, and manufacturers such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, then, the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and inventory of input and input service meant for use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services and take CENVAT credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable. 31. But if a manufacturer of goods or provider of output service opts not to maintain separate accounts, he will have to follow either of the two options mentioned in sub-rule (3) of Rule 6. The first option is to pay an amount equivalent to 10% of the value of the exempted goods (in respect of manufacturer of goods). The second option is to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g it to a process. The exemption Notification as originally issued on 17.07.1989, was actually rescinded by another Notification dated 01.03.1994, when Modvat was extended to petroleum products including LPG. Therefore, when companies like the petitioner made representations, the Government of India decided to restore the exemption by issuing a Notification No.116/94-CE dated 24.06.1994. But during the period from the date of withdrawal of exemption (1.3.1994) and the date of restoration of exemption (23.06.1994), the petitioner was made to pay the full incidence of Excise Duty. Therefore, the Government of India passed an order dated 24.03.1995, directing refund of the Duty paid during the said period. 36. Therefore, it is clear that the Government of India was fully aware of the nature of the exemption Notification, the nature of the manufacturing process carried on by the petitioner and the entitlement of the petitioner to the benefit. Being an authority functioning under the Government of India, the second Respondent is bound by the exemption Notification as well as the decision taken by the Government of India way back in 1995. 37. As rightly pointed out by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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