LexM/S. NAHAR INDUSTRIAL ENTERPRISES LTD. AND ORS. versus UNION OF INDIA AND ORS.
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A MIS. NAHAR INDUSTRIAL ENTERPRISES LTD. AND ORS. v. UNION OF INDIA AND ORS. AUGUST I 0, 2004 B [S.N. VARIAVA AND ARIJIT PASAYAT, JJ.] Central Excise Act, 1944-Section 3-Additional Duties of Excise (Textiles and Textile Articles) Act, 1978-Section 3-Cotton yarn manu- factured by 100% Export Oriented Undertaking from indigenous raw C materials-Additional Excise Duty (AED) in addition to Basic Excise Duty (BED)-Levy of-Notification 55191-CE granting exemption to 100% EOUs from AED-By Notification 8197-CE, 100% EOUs exempted from paying duty in excess of amount of BED paid by producer or manufacturer who is not 100% EDU-After amendment by Notification 1112000-CE, D amount in excess of excise duty leviable under the Act 'or under any other law for the time being in force' exemption-Circular dated 19.10.2000 clarifying that AED /eviable on excisable goods manufactured by 100% EOUs in addition to BED-High Court held that words 'or under any other law for the time being in force' took away exemption granted under E Notification 55191-CE-Correctness of-Held: Notification 8197-CE and Notification 1112000 CE does not create a liability on 100% EOUs to pay A ED-Also effect of Notification 55191-CE not diluted with regard to 100% EOUs-Thus, view expressed in the Circular and by High Court not sustainable-Hence, set aside. F Appellants-100% Export Oriented Undertaking (EOUs) are en- gaged in manufacturing of cotton yarn out of indigenous raw materials attracting Basic Excise Duty (BED) leviable under Section 3 of the Central Excise Act, 1944 and Additional Excise Duty (AED) leviable under Section 3 of the Additional Duties of Excise (Textiles and Textile G Articles) Act, 1978. Notification No. 55/91-CE was issued and 100% EOUs manufacturing excisable goods were exempted from additional duty. Subsequently, under Notification No. 8/97-CE 100% EOUs were granted exemption from paying duty in excess of amount of BED paid by producer or manufacturer who is not 100% EOU. The said H Notification was amended by Notification 1112000-CE and 100% EOU 432 NAHAR INDUSTRIAL ENTERPRISES LTD. v. U.0.1. 433 is exempted from paying duty in excess of amount of BED plus the A amount of AED plus any other duties of excise under any other law for the time being in force, paid by the producer or manufacturer who is not 100% EOU. Central Board of Excise and Customs then issued a Circular dated 19.10.2000 clarifying that AED would also be leviable on yarns manufactured by 100% EOU from indigenous raw materials B and cleared into DTA in addition to BED. The Circular was challenged, and the High Court dismissed the writ petitions holding that introduc- tion of the words 'or any other law for the time being in force' took away exemptions granted to the manufacturers like the appellants under Notification No. 55/91-CE. Hence the present appeals. Appellants contended that both the Board and High Court failed to notice that the introduction of words 'or any other law for the time being in force' did not in any way affect the exemption flowing from Notification No. 55/91-CE. Allowing the appeals, the Court HELD : I.I. A bare reading of Notification No. 8/97-CE dated 1.3.1997 and as amended by Notification 11/2000-CE dated 1.3.2000 shows that there was clear intention to rationalize the payment of duty c D by 100% EOUs and others. What is clearly intended relates to the E liability of the manufacturer who is 100% EOU to pay the amount which amounts to aggregate of the duties of excise leviable under Section 3 of the Act or under any other law for the time being in force on the like goods produced or manufactured in India by those who are not 100% EOU if sold India. The obvious object was to see that the F manufacturer who is 100% EOU is not in more advantageous position vis-ii-vis the others. [440-F-H] 2. A perusal of the un-amended notification 8/97-CE and notifi- cation after amendme!'t Notification No. 11/2000 CE shows that words inserted by amendment, 'the aggregate or after words 'equal to' and G words 'or under any other law for the time being in force' after 'Section 3 of Central Excise Act' in the original notification did not in any way create a liability on the 100% EOUs to pay AED. Notification No. 55/91-CE dated 25.7.1991 is in no way diluted so far as the manufacturers like the appellants are concerned, notwithstanding H 434 SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R. A what h
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