9911796707
TMI Blog2000 (12) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... l Products (Standards of Quality) Order, 1975; that the Directorate of Vanaspathi, Government of India, has issued the registration certificate dated 17-8-1999 for manufacture of Vanaspathi and allied items; that the petitioner has set up a Vanaspathi unit with huge investment; that the petitioner has a captive Hydrogeneration plant; that for the manufacture of Vanaspathi, one of the raw material is crude Palm Oil; that the crude Palm Oil is refined in the petitioner's factory and hydrogen gas is added to Palm Oil to get the end product Vanaspathi; that the petitioner purchases the hydrogen gas from Chemfab Alkalies, Pondicherry; that the hydrogen gas is a by-product produced in alkali units; that certain other Vanaspathi manufacturers have set up their own captive hydrogen generation facility; that the setting up of captive hydrogen generation plant facility involves an expenditure of more than Rs. 2 crores besides requiring high power intensive; and that since the petitioner is a medium scale industry, it could not make an investment of such huge amount of Rs. 2 crores, it has only set up a captive hydrogenation unit to procure the hydrogen gas from outside. 3.It is the further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as decided to further rationalise the duty structure so as to harmonise the interest of the customers, formers and the processors and at the same time regulate the unabated import of edible oils. Crude Palm Oil was hitherto chargeable to basic duty of 15% when imported for manufacture of vanaspathi. It has now been decided that this benefit of concessional duty of 15% (basis) shall now be available only to those manufacturers having captive hydrogen generation facilities. Registration with the Directorate of Vanaspathi, Veg. Oils and Fats shall also be necessary for availing of this exemption. This is safeguard against the possibility of misuse of this facility." 4.It is the further case of the petitioner that the denial of the concessional rate of duty to non-captive hydrogen generation units is arbitrary and violative of Article 14 of the Constitution of India; and since the petitioner is not having a captive hydrogen generation facility, by virtue of this amendment made under Notification No. 88 of 2000, the petitioner become non-entitled to the concessional rate of duty. Hence, the present writ petition to declare condition No. 4B(ii) of the Notification No. 88/2000 which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 25 of the Customs Act empower the Government to issue exemption notification in the public interest. While that being so, the withdrawal of the concession should also be exercised in the like manner. The impugned notification restricted the concession to units having captive hydrogen generation facility and not to other manufacturers of Vanaspathi is not in public interest and is ultra vires to Section 25 of the Customs Act. She further contended that except a few multi-national companies, most of the manufacturers are producing Vanaspati by procuring hydrogen gas from other suppliers. Because of this restriction imposed, only the multi-national companies are benefited and not the units of medium and small-scale sectors and thereby the restriction is against the public interest and further contended that the withdrawal of the concession to units having no facility to manufacture hydrogen is violative of Article 19(1)(g) of the Constitution. 7.On the other hand, Mr. Balaji, learned Counsel, appearing for the respondent has contended that the concession notification issued under the fiscal statutes has to be construed strictly. It is true that the notification has been issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liability to pay customs duty arises when the taxable event occurs. An exemption notification issued under Section 25 of the Act had the effect of suspending collection of duty. Such an exemption by its very nature is susceptible of being modified or subjected to certain other conditions. From the very nature of the power of exemption granted under Section 25, it is obvious that the same is with a view to enable the Government to regulate, control and promote the industries in the country. 10.In the present case, originally, concession was granted to all importers as stated in Notification No. 66 of 2000 so as to promote and encourage the manufacturers in Vanaspathi, but however having realised the fact that the importer, who is not having the hydro-generation facility are indulging in otherwise disposing of the crude palm oil which was imported on availing the concession than for the purpose for which concession has been granted, in the public interest, for the purpose of regulation, the 1st respondent has imposed the condition that the concession could be available to those units which have the captive hydrogen generation unit by Notification No. 88 of 2000. 11.The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification under Section 25 of Customs Act and the one and only consideration is the public interest. If the petitioner is not able to assail the notification on the ground that the restriction imposed in the notification is against the public interest, he cannot assail the restriction on any other grounds. 14.The public interest in imposing the condition to have the hydrogen generation plant to avail the benefit of the Notification is amply manifested from the memorandum dated 13-6-2000, wherein it is clearly stated that "the Government has reviewed the edible oil situation in depth and has decided to further rationalise the duty structure so as to harmonise the interest of the customers, formers and the processors and at the same time regulate the unabated import of edible oils. Crude Palm Oil was hitherto chargeable to basic duty of 15% when imported for manufacture of vanaspathi. It has now been decided that this benefit of concessional duty of 15% (basis) shall now be available only to those manufacturers having captive hydrogen generation facilities. Registration with the Directorate of Vanaspathi, Veg. Oils and Fats shall also be necessary for availing of this exemption. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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