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TMI Blog2014 (11) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... cture, development, financial concessions and to provide easy market access. The new initiatives were to provide the required incentives as well as an enabling environment for industrial development, improve availability of capital and increase market access to provide a fillip to the private investment in the state. 2. Accordingly, it has been decided to provide the package of incentives for these States. In Clause 3.1 (a), (b) it has been set out as under:- "Clause 3.1 (a) 100% (hundred percent) outright excise duty exemption for a period of 10 years from the date of commencement of commercial production. (b) 100% income tax exemption for initial period of five years and thereafter 30% for companies and 25% for other than companies for a further period of five years for the entire states of Uttarakhand and Himachal Pradesh from the date of commencement of commercial production. 3. It is asserted that in implementation of the excise duty, exemption promised by the said Industrial Policy and in exercise of power conferred under Section 5A of the Central Excise Act, 1944, Ministry of Finance, Department of Revenue through the Central Board of Excise & Customs (CBE&C for short) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the show cause notice reveals that the minds of the respondents are made up and showing cause in such circumstances would be a futile exercise and thirdly, where the notice itself is issued after undue delay the settled principles is that same is barred by limitations as in the case in hand. In this context, the petitioner relied upon the judgments of Hon'ble Supreme Court, rendered in 'Calcutta Discount Company Ltd. v. Income Tax Officer, Companies District, I and another', 1961 (48) AIR 372 SC, 'Siemens Ltd. v. State of Maharashtra', 2007 (207) ELT 168 SC and 'Gammon India Ltd. vs. CCE, Goa', 2002 (146) ELT 173, affirmed by Hon'ble Supreme Court in 2002 (146) ELT A313. 7. The issue pertains to the scope of the notification no. 50 of 2003 dated 10.06.2003 issued under Section 5A of Central Excise Act, 1944 granting area based exemption in respect of certain duties of excise mentioned under the notification no. 50 of 2003. 8. It is asserted by the petitioner that the notification is an 'implementing notification', implementing the Industrial Policy wherein ex-facie in Clause 3.1 there is '100% outright excise duty exemption'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the respondent's office, the show cause notice for the extended period i.e. April, 2007 to June, 2011 has been worked out. 10. The other preliminary objection as to the maintainability of the writ petition is that the petitioner has an alternate and efficacious and statutory remedy available under the Central Excise Act, 1944 & Rules, hence on this ground alone, the writ petition deserves to be dismissed. 11. Heard Mr. Arshad Hidayatullah, learned Senior Advocate for the petitioner and Mr. Shobhit Saharia, Senior Standing Counsel for Central Excise. 12. Learned Senior Advocate for the petitioner, first of all, argued that the person, who issued the impugned notice, is himself the adjudicating authority, hence the notice is pre-determination of the issue against the petitioner, as to whether the petitioner was entitled to 100% outright excise duty exemption. The respondent no. 3's mind is made up and showing cause before him would, therefore, be futile. Similarly, filing appeal before the Tribunal would be futile, because apart from the large amount of duty purported to be demanded in the context of levy of NCCD, Education Cess and Secondary Education Cess, which would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kward areas of the State to encourage setting up of new industries in backward areas, the implementing notification issued thereunder, have to be given a liberal interpretation and the rule of strict interpretation has no application. In this context, learned Senior Advocate relied upon the judgments of Hon'ble Apex Court, rendered in 'State of Jharkhand and ors. vs. Tata Cummins Ltd. & ors.', 2006 (SC1) GJX 205 SC (in Appeal (Civil) 10272 of 2003 decided on March, 24, 2006), 'Bajaj Tempo Ltd. vs. Commissioner of Income-Tax', 1972 (79) AIR 1622 SC, Commissioner of Customs (Import), Mumbai vs. M/s. Konkan Synthetic Fibres 2012-TIOL-29-SC-CUS.. 15. Learned Senior Advocate for the petitioner contended that principle of interpretation of incorporation by reference is embodied in Section 136 (3) of the Finance Act, 2001. He submitted that provisions of Section 5A of the Central Excise Act, 1994 and the implementing notification no. 50 of 2003 have to be read as a part of the exemption from Central Excise Duties granted under the Industrial Policy in the implementation of 100% outright excise duty exemption. He submitted that reference to the Amendment and Validation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the tax exemption on 11.12.2006 and in the application it was specifically mentioned that it was as per the notification no. 50/2003 dated 10.06.2003. Further, nowhere it has been pleaded in the writ petition that petitioner in any manner whatsoever, believing on the policy decision dated 07.01.2003, took any steps detrimental to its interest, and thus, is in any manner whatsoever has the right of claiming the declaratory relief by invoking the doctrine of promissory estoppel against the respondents. It is submitted that no any specific and categorical pleadings whatsoever have been made in the whole of the writ petition and nor any cogent material has been brought on record to even, prima-facie, show that the petitioner acted upon the policy decision dated 07.01.2003 and it is a settled principle of law that 'for application of the doctrine of promissory estoppel the promisee must establish that he suffered in detriment or altered his position by placing reliance on the promise'. He contended that a bare reading of the replies submitted by the petitioner before the revenue and as brought on record, as well as specifically pleaded in paragraph no.13 of the writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1982, in the exemption notification 50 of 2003, admittedly made after 24-09-1984, exemption from the provisions of Central law i.e. Finance Act 2001 cannot be read into, since provisions of Finance Act 2001 are neither mentioned in the preamble of the exemption notification issued under the Central Excises and Salt Act nor the notification 50/2003 expressly provides for exemption of duty of excise livable under the Finance Act 2001. It is further submitted that Act of 1982 is not only an Amendment Act but also a Validation Act and the law laid down by the Apex Court with respect to the "Validation Act" is that the object and purpose of the Validation Act is to remove the very basis and reason because of which an earlier judgment has been passed by the Higher Courts. He contended that the Validation Act of 1982 was passed in order to remove the very basis and the reason of passing of judgment by the Delhi High Court in the case of Modi Sugars, wherein the Delhi High Court had construed the term "duty of excise" in an exemption notification to include all kinds of duty of Excise be it special, auxiliary etc. notwithstanding the fact that such a duty is mentioned in the exemption not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion contained therein from the levy of the duty of excise known as NCCD for a period of ten years calculated from the date of commencement of commercial production by the petitioner. In fact, the petitioner is seeking from this Court to grant a declaratory relief. 24. The learned Senior Advocate for the petitioner submitted that showing cause before the respondent no.3 would be a futile exercise as he, being adjudicating authority, has already made up his mind. This argument is not acceptable as view taken in the show cause notice is always tentative not decisive, inasmuch as, final decision is always taken after hearing the party, against whom notice is issued. Similarly, another argument of learned Senior Advocate that filing appeal before the Tribunal, would also be futile, has no legs to stand, as appellate authority is required to decide the case on its own merits. This Court is not dismissing the writ petition on the ground of alternative remedy, because petition was admitted earlier and was heard on merit. But it is made clear that alternative remedy, if available to a party under the law, can always be availed. 25. Main submission of learned Senior Advocate for the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30. In Novopan Indian Ltd., this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case of doubt or ambiguity, the benefit of it must go to the State. A Constitution Bench of this Court in Hansraj Gordhandas v. CCE and Customs held that (Novopan India Ltd. case, SCC p. 614, para 16) "16......such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption." 26. The case of Surbhi Industries V. CCE, reported in 2007 (208) ELT 578 AAR, covers the case in hand in which following principle was laid down: "From the discussion of the case law, the principle that emerges is that to avail the benefits of an exemption notification a person has to comply strictly with the terms of the notification. Nothing can be added to the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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