Law: Central Excise and Salt Act, (I of 1944)

Section: 2(17),3-B,12A(1)

Law: Central Excise Rules, 1944

Section: 7,10

Result: Order accordingly THIS ORDER PASSED BY: MUHAMMAD SAIR ALI, JUSTICE:------------ The appellant is a public company limited by shares, and is engaged in manufacture and supply of sugar. During the years, 1990-91, 1991-92, 1992-93 and 1993-94 season it claimed clearance of sugar on concessional rates as contemplated in S.R.O. 814(I)/85, dated 29-8-1985. Para 1 of that S.R.O. Reads as under: "In exercise of the powers conferred under. Subsection (1) of section 12A of Central Excise and Salt Act, 1944 (I of 1944), the Federal Government is pleased to exempt new sugar mills, which may commence operation hereafter, from payment of fifty per cent of central excise duty leviable on their production of first two years commencing from the date of operation." 2. The Department however, refused to allow the claimed concession on the ground that the appellant had come into production on 14-2-1990 when the aforesaid notification had already been rescinded through another Notification S.R.O. No. 556(I)/89, dated 3-6-1989. 3. The appellant appears to have approached this Court in Constitutional jurisdiction wherein as a matter of interim relief it was allowed clearance of sugar from 21-5-1992 to 13-1-1994 on payment of 50% of excise duty. For the remaining 50% the appellant was directed to furnish Bank guarantee. That Constitutional petition was dismissed by this Court on 19-1-1992; while the appeal filed before the Hon'ble apex Court was dismissed on 1-4-1998. On being served with a notice for recovery of remaining 50% of excise duty amounting to Rs.5,62,14,545, the appellant allegedly filed a civil suit in connivance with the Bank whose guarantee was furnished for 50% of the duty. However, during the pendency of that civil suit against the bank, on 4-6-1998 an interm relief in the form of restraint order against encashment of guarantee was made by the Court. In the meanwhile, on 4-6-1998 the appellant sought permission to make payment of remaining 50% excise duty in Installments which was allowed by the Collector through his order, dated 5-6-1998. The application for interim relief filed by the appellant in the civil suit was dismissed on 19-6-1998 whereby on usual…

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