Law:

Section:

JUDGMENT This judgment would dispose of three Civil Writ Petitions Nos. 1207 of 1967, 425 of 1968 and 16 of 1970 which have been filed by the Associated Cement Companies Ltd. against the Director of Inspection, Customs & Central Excise, New Delhi. Arguments have been addressed in Petition No. 1207 of 1967 and it is stated that the decision in that petition would govern the other two petitions also. So far as Petition No. 425 of 1968 in which the central authority and Deputy Director of Inspection too has been impleaded as a respondent is concerned, an additional ground, to which reference would be made hereafter, is also taken. The petitioner is a company which owns about 16 cement factories in various parts of India. Tax Credit Certificate (Excise Duty on Excess Clearance) Scheme, 1965 (hereinafter called "the scheme"), was made applicable to the cement industry in 1965 to provide an incentive for increased production. The above scheme was made by the Central Government in exercise of the powers conferred by section 280ZE read with section 280ZD of the Income-tax Act, 1961, which had been inserted by the Finance Act, 1965. For the year 1965-66, with which we are concerned, the excise duty for cement levied under the Central Excises and Salt Act, 1944 (hereinafter, for the sake of brevity, referred to as "the Excise Act") was Rs. 2360 per tonne. As per section 80 of the Finance Act of 1965, a special duty of excise equal to twenty per cent. of the total amount of excise chargeable under the Excise Act on various articles including cement was levied. According to section 280ZD, a person shall be entitled to a tax credit certificate for an amount calculated at a rate not exceeding twenty-five per cent, of the amount of the duty of excise payable by him on that quantum of the goods cleared by him during the relevant financial year which exceeds the quantum of the goods cleared by him during the base year. The authority concerned in these cases calculated the rate for the purpose of granting the tax credit certificate at twenty-five per cent of the basic excise duty levied under the Excise Act only (Rs. 23.60 per tonne) and not twenty-five per cent, of the…

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