Mukesh R. Shah, J.@mdashAs common question of law and facts arise in both these petitions, they are disposed of by this common judgment and order. In both these petitions, the respective petitioner has prayed for appropriate direction or order, restraining the respondents, their servants and agents from preventing the petitioner-company from utilising money credit earned by it, as a result of use of unconventional minor oils, and thereby, set aside the Letter F. No. IV-16-75/MP/2003, dated 24-9-2003 (Annexure-J), issued by respondent No. 3, herein. It is also, further, prayed that an appropriate writ, direction or order be issued prohibiting the respondents, their servants and agents completely and permanently from disallowing or preventing the petitioners/companies from utilizing accumulated money credit that was lying in the petitioner''s RG 23B, Part-II, as on 22-7-1996.
2. The petitioner in Special Civil Application No. 16743 of 2004, i.e. Morvi Vegetable Products Ltd., has also prayed for an appropriate order to quash and set aside Order-in-Original No. 01 & 02/Commr/2005, dated 18-1-2005, passed by respondent No. 1, making a demand of Central Excise Duty on the ground that the petitioner has wrongly availed money credit accrued in its favour, which was lying in its RG 23B, Part-II, as on 22-7-1996.
3. For the sake of convenience, the facts of Special Civil Application No. 14593 of 2003 are considered.
4. That the petitioner-company is engaged in the business of manufacture of vanaspati/vegetable products, which are the goods classified under Heading 15.04 of the Central Excise Tariff. The Central Government issued a Notification No. 27/87 on 1-3-1987, thereby, allowing money credit at the rates specified in the Notification for use of unconventional oils for manufacture of vanaspati. That, thereafter, the Notification No. 192/87 came to be issued by the Central Government on 12-8-1987, thereby, allowing the money credit for use of unconventional/minor oils for manufacture of soap. The conditions in the said Notification were that the credit availed on purchase of minor oils in one month could be used only in the succeeding month and that the credit utilized shall not exceed Rs. 1,000/- per ton of vegetable products. It appears that as the rate, at which money credit was allowed, was higher, the manufacturers like the present petitioner-company started accumulating unutilized money credit in register maintained in form RG 23B. It appears that the Central Government, thereafter, issued a notification dated 25-8-1989 and rescinded the notification allowing money credit namely Notification Nos. 27/87 and 192/87. The Central Excise authorities in case of vanaspati manufacturers including the petitioner-company disallowed use of accumulated money credit for discharging duty liabilities on vegetable/vanaspati products on the ground that the notifications allowing money credit stood rescinded with effect from 25-8-1989. The aforesaid action on the part of the Central Excise authorities was challenged before this Court and this Court decided a group of writ petitions including the petition filed by the present petitioner-company and hold that the money credit was a monetary right earned by the manufacturers on purchasing and utilizing unconventional/minor oils and as manufacturers had changed the manufacturing process and plants hoping to get money credit by way of rebate, and therefore, vested right of utilizing money credit could not be taken away on rescission of the notifications. This Court, further, held that accumulated money credit would not lapse and the manufacturers were entitled to utilize the same in future for clearances of vegetable products. It appears that against the decision of this Court, the Revenue approached the Hon''ble Supreme Court and by order dated 8-10-1990, the Supreme Court dismissed the Special Leave Petitions.
5. It appears that, thereafter, the petitioners and the similarly situated other manufacturers started utilizing money credit lying in balance in view of the above referred judgment of this Court and confirmed by the Supreme Court. It appears that, thereafter, the Central Government again issued a notification, i.e. Notification No. 45/89, allowing money credit for use of unconventional oils in the manufacture of vegetable products. While issuing Notification No. 45/89, the Central Government imposed similar conditions like the previous Notification Nos. 27/87 and 192/87 including restriction of utilization of money credit of Rs. 1,000/- only per ton of the vegetable products. Hence, the petitioner-company and similarly situated manufacturers started accumulating money credit in RG 23B day-by-day. It appears that, thereafter, the Union Budget was present before the Parliament and the Central Government prescribed nil rate of duty for vanaspati/vegetable products falling under Heading No. 15.04 of the tariff. At the relevant point of time, i.e. on 22-7-1996, the petitioner-company was having unutilized balance of money credit of Rs. 6,34,51,009.56 in money credit register (RG 23B) for having purchased and utilized unconventional/minor oils. It appears that the Union Budget was presented before the Parliament on 28-2-2003, whereupon, vanaspati/vegetable products falling under Heading No. 15.04 was once again brought under payment of excise duty by prescribing 8 per cent, as the rate of duty, which is, thereafter, substituted by a specific rate of duty of Rs. 1.25 per kg. (i.e. Rs. 1250/- per ton).
6. It is the case on behalf of the petitioner that the petitioner-company wrote a letter to the Central Excise authorities informing them of its intention to utilize balance money credit lying in its RG 23B and the petitioner-company utilized the money credit lying in RG 23B with restriction of utilization of Rs. 1,000/- per ton of vegetable products and reported such utilization to the Excise authorities by filing monthly returns in the prescribed form. That the Assistant Commissioner of Central Excise informed the petitioner-company and requested to make payment of excise duty through PLA (i.e. in cash) or through Cenvat credit, observing that the judgments referred to by the petitioner-company were not applicable. The petitioner-company, then, made a detailed representation to the Chief Commissioner of Central Excise as well as to the Commissioner of Central Excise in this matter and requested them to permit/allow the petitioner-company to utilize the money credit lying in RG-23B by submitting that the petitioner''s vested right to utilize accumulated money credit has been upheld. It appears that, thereafter, the petitioner was informed that his representation had been disposed of, because money credit scheme was not in force as on date and that money credit earned on any inputs could have been used for payment of duty on the final products manufactured out of such inputs only and the scheme of money credit had not been in force after 18-5-1989.
7. Being aggrieved and dissatisfied with the above, the petitioner-company has preferred the present petition for the aforesaid reliefs.
8. It appears that so far as Special Civil Application No. 16743 of 2004 is concerned, thereafter, the petitioner was served with a show cause notice and was called upon to show cause as to why the amount of money credit utilized by it, which was credited in its RG-23B, may not be recovered, as the petitioner was not entitled to utilize the same, and then, the Order-in-Original Nos. 01 & 02/Commr/2005, dated 18-1-2005, came to be passed by the Commissioner of Central Excise, Rajkot, which is challenged before this Court.
9. Shri Paresh Dave, learned Advocate appearing on behalf of the petitioner in SCA No. 14593 of 2003, and Mr. Uday Joshi, learned Advocate appearing on behalf of the petitioner in SCA No. 16743 of 2004, have vehemently submitted that as such the issue/question involved in the present petitions is squarely covered by a decision of the learned Single Judge of the Calcutta High Court in the case of "Rasoi Limited v. Union of India", 2004 (176) E.L.T. 101 (Cal.). It is submitted that with respect to the very Scheme of money credit and with respect to the very product, it has been held by the Calcutta High Court that manufacturers like the present petitioners are entitled to avail and/or utilize the money credit lying in their RG-23B. It is also submitted that, as such, decision of the Calcutta High Court has been confirmed by the Hon''ble Supreme Court [2005 (185) E.L.T. A170 (S.C.)], as the SLP against the said decision has been dismissed. It is, further, submitted that even otherwise considering the earlier decision of this Court, holding that as manufacturers changed the manufacturing process and plants, hoping to get money credit by way of rebate, vested right of utilizing money credit could not be taken away on rescission of the notifications. Therefore, the manufacturers are entitled to utilize the same in future for the vegetable products. It is, then, submitted that the very action on the part of the respondents in restraining the petitioners from utilizing the accumulated money credit and or trying to recover the utilized money credit by OLR deserves to be quashed and set aside.
10. Shri R.J. Oza, learned Counsel, has appeared on behalf of the Revenue. He is not in a position to dispute that with respect to the very dispute/question relating to the accumulated money credit and with respect to the very product, there is a decision of the Calcutta High Court against the Revenue. He is also not in a position to dispute that against the said decision SLPs have been dismissed by the Supreme Court. He has not shown any contrary decision to the decision of the Calcutta High Court. He also does not dispute that in earlier round of litigation, this Court held that the manufacturers are entitled to utilize the accumulated money credit and the same cannot be taken away solely on the ground that subsequently the Scheme of money credit is rescinded. He has, therefore, requested to pass appropriate order in these matters.
11. Heard the learned Counsels for the respective parties, at length. At the outset, it is required to be noted that in the earlier round of litigation, this Court has specifically held in favour of the manufacturers and observed that a vested right has accrued in favour of the manufacturers and that the money credit was a monetary right earned by the manufacturers on purchasing and utilizing unconventional/minor oils and for that the manufacturers had changed the manufacturing process and plants hoping to get money credit, and therefore, the aforesaid right cannot be taken away due to rescinding of the notification. This Court also held that the accumulated money credit would not lapse and the manufacturers were entitled to utilize the same in future. Special Leave Petitions filed by the Revenue as well as the manufacturers have been dismissed by the Supreme Court, and therefore, the contention of the Respondent that the Scheme of Money Credit has been rescinded subsequently and/or the same is not in force cannot be sustained.
12. Even otherwise, the identical question came to be considered by the Calcutta High Court in the case of "Rasoi Limited v. Union of India" (supra), which deals with the very same issue/question with respect to utilization of the accumulated money credit and denial of the same on the ground that the said Scheme has been rescinded and or Excise Duty has been abolished. In Paras 11 to 14 of the aforesaid judgment, the learned Single Judge, observed and held as under;
"11. Before I proceed to consider the respective submissions of the learned Counsel of the parties, it will be profitable to refer to the provisions contained in Section 38A of the Central Excise Act, 1944, which was retrospectively introduced by way of an amendment with effect from the very inception, i.e. 1944. The said provision is quoted below:
"Section 38A. Effect of amendments, etc., of rules, notifications or orders. - Where any rule, notification or order made or issue under this Act or any notification or order issued under such rule, is amended, repealed, suspended or rescinded, then, unless a different intention appears, such amendments, repeal, supersession or rescinding shall not-
(a) revive anything in force or existing at the time at which the amendment, repeal, supersession or rescinding takes effect, or
(b) affect the previous operation of any rule, notification or order so amended, repealed, superseded or rescinded or anything duly done or suffered thereunder; or
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order so amended, repealed, superseded or rescinded; or
(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed under or in violation of any rule, notification or order so amended, repealed, superseded or rescinded; or
(e) affect any investigation, legal proceeding or remedy may be instituted continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the rule, notification or order, as the case may be has not been amended repealed, superseded or rescinded."
12. In view of the aforesaid provisions contained in Section 38A of the Act, I find substance in the contention of Mr. Bajoria that by reason of the omission of the rule, the right of the petitioner No. 1 to have money-credit in terms of the notification under the rule cannot lapse. As pointed out by the Supreme Court in the case of Tungabhadra Industries Limited (Supra), Central Excise Act does not permit divestment of any accrued right of a person acquired by virtue of any of the provisions contained in the Act, rules, notification, order, etc.. Moreover it is rightly pointed out by Mr. Bajoria that even in cases, where by specific enactment a vested right is taken away in violation of the provisions contained in Section 38A of the Act, the Apex Court has unhesitatingly preserved such accrued right, [see the cases of Samtel India Ltd. and Eicher Motors Ltd. (Supra)].
13. In this case, there is no dispute that the petitioner No. 1 had acquired money-credit to the extent of Rs. 17,32,78,689/- in terms of the notification under the money-credit scheme. Such money credit scheme permitted the petitioner No. 1 to utilize such credit for an amount not exceeding Rs. 1,000/- per MT at any time after the succeeding month in which the money-credit accrued. Thus, the petitioner No. 1 is entitled to invoke such vested right in accordance with the conditions mentioned in the notification as it then stood. The aforesaid point is, thus, answered in favour of the petitioner No. 1.
14. Regarding the other objection of the respondents as regards relocation of the factory, after going through the provisions contained in Rules 57K to 57P and 174 of the Central Excise Rules, relied upon by Mr. Banerjee, I find that according to those provisions, goods cannot be manufactured without a license. Those provisions demand that the manufacturing premises are to be specified in the plan while making application for license. The license authorizes the license holder to undertake manufacturing operation at the premises mentioned in the registration certificate. If one wants to operate manufacturing process from more than one premise, separate registration is to be made for each of those premises. The object of such separate registration is to ensure proper supervision by the Inspectors for proper accounting of the credit, goods manufactured, assessment of duty, etc., in respect of the goods produced at different places. But scheme granting money- credit did not require that such credit is to be utilized only for the payment of duty by the manufacturer in respect of goods produced at the same unit and not at the different units maintained by the same manufacturer. Such right really accrues to the asset and it passes to the person who owns such asset. Thus, it is preposterous to suggest that a manufacturer cannot get the credit benefit in respect of the goods manufactured at his different units and such benefit should be limited to the duty payable and the production of the selfsame unit. I, therefore, hold that there is no impediment in getting adjustment of the money credit accrued in respect of the goods manufactured at New Alipore towards duty payable for the good produced at the Bangannagar factory. It may not be out of place to mention here that both the aforesaid factories are registered and licensed. The aforesaid question is, thus, answered in favour of the petitioner No. 1."
13. It is, therefore, held that the manufacturers were entitled to utilize the accumulated money credit in terms of the notification and the Money Credit Scheme. Further, the learned Single Judge rejected the claim of the manufacturers to get the accumulated money credit in cash. It is reported that against the said decision both the Revenue as well as the manufacturers had approached the Supreme Court and the Supreme Court dismissed both the Special Leave Petitions. Therefore, the view taken by the Calcutta High Court that the manufacturers were entitled to utilize the accumulated money credit has been upheld by the Supreme Court. In view of the above, the action on the parts of the respondents in restraining the petitioners from utilizing the accumulated money credit lying in RG-23B as on 21-7-1996 cannot be sustained and consequently any further order trying to recover the same also deserves to be quashed and set aside. In view of the above and for the reasons stated above both the petitions succeed. It is held that the respective petitioners are entitled to utilize the accumulated money credit lying in their RG-23B register, accumulated as on 21-7-1996. It is reported that, as such, by way of interim relief, the petitioner in Special Civil Application No. 14593 of 2003 was permitted to utilize the respective accumulated money credit, and therefore, same must have been utilized by the petitioner by now. Consequently, order in 01-02-Commissioner-05, Dated 18-1-2005, which is the subject matter of Special Civil Application No. 16743 of 2004 also deserves to be quashed and set aside and is accordingly quashed. Rule is made absolute to the aforesaid extent in each petition. Further, in the facts and circumstances of the case, there shall be no order as to costs.
