9911796707
TMI Blog1989 (12) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... e Writ Petition Nos. 13565 and 13567 of 1986 is for a declaration declaring condition (ii) in para 2 of the order F.No. B.22-5-1986-TRU, dated 7-4-1986 as invalid while the prayer in the writ petition Nos. 11938 and 11939 of 1988 is for a declaration declaring Rule 56(i) of the Central Excise Rules as ultra vires. 2. The brief facts necessary for the purpose of these cases are as follows : The petitioners are manufacturers of steel ingots. One of the inputs is waste and scrap which the petitioners buy in the open market. Under Rule 57A of the Central Excise Rules, the Central Government may by notification in the Official Gazette, specify in this behalf, for the purpose of allowing credit of any duty of excise or the additional duty ….. p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts are clearly recognisable as being non-duty paid or charged to NIL rate of duty. Acting on this order dated 7-4-1986 the third respondent in these writ petitions issued a notice of demand dated 8/10-2-1986 under Rule 57-1 of the Rules demanding certain amounts from the petitioners on the ground that credit had been wrongly taken by the petitioners and, therefore, they should pay the amount within ten days. 4. Rule 57-1, which has been relied upon by the third respondent reads as follows : "If the credit of duty paid on inputs has been taken wrongly, the credit so taken may be disallowed by the proper officer and the amount so disallowed shall be adjusted in the credit account or the account-current maintained by the manufacturer or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinguishable as non-duty paid and available on a specified date within the factory premises, customs area or a warehouse. In respect of the other inputs, the deeming provision is made applicable by the Rule, whereas by the orders issued on 7-4-1986 the Government had introduced in a sort of indirect way an additional condition taking away the benefit conferred under the Rule and therefore, the second condition enshrined in the order of the Government dated 7-4-1986 should be declared as invalid. The last submission of the petitioner is that if Rule 57-1 were to be strictly applied as enabling the third respondent to issue a notice of demand based on his subjective satisfaction of wrong credit, then the rule itself would be liable to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners should be given to state their case. This line of thinking is supported by the decision of the Madhya Pradesh High Court in Steel Ingote P. Ltd. v. U.O.I. 1988 (36) E.L.T. 529. There is held: "In the instant case, no opportunity was admittedly given to the petitioners to show cause before passing the impugned orders under Rule 57-1. These orders, therefore, deserve to be quashed on this short ground." Madhya Pradesh High Court relied on the judgment of the Supreme Court in Ramana Dayaram Shetty v. The International Airport Authority of India Others (AIR 1979 SC 1628) and Olga Tellis Ors. v. Bombay Municipal Corpn. Ors. (AIR 1986 SC 180). 7. In view of the facts that the demands in the instant case, which really were ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
