Supreme Court in the case of Union of India Versus M/s V.V.F Limited

Case Covered:

Union of India & Another Etc. Etc.

Versus

M/s V.V.F Limited & Another  Etc. Etc. 

Introduction:

The SC  in the case of Union of India Vs VVF Ltd Appeal No.2256=2263/2020 dt 22.4.2020 allowed the Appeal filed by Government in respect of a refund of Excise duty granted on the area based excise exemption notification. The High Court has set aside subsequent notification ( on the ground of promissory estoppel) which permitted refund of Excise duty which shall be only actual excise duty paid on actual value addition made by the assessee during the manufacturing process.

Facts of the case:

A common question of law and facts arise in this group of appeals and as such arise out of the impugned common judgment and order dated 10.03.2010 passed by the High Court of Gujarat at Ahmedabad in respective Special Civil
Application Nos. 5909/2008, 6300/2008, 6298/2008, 6299/2008, 5907/2008, 8468/2008, 6334/2008, and 6562/2008, all these appeals are being decided and disposed of by this common judgment and order.

Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 10.03.2010 passed by the High Court of Gujarat at Ahmedabad in respective Special Civil Application Nos. 5909/2008, 6300/2008, 6298/2008, 6299/2008, 5907/2008, 8468/2008, 6334/2008 and 6562/2008, by which the Division Bench of the High Court has allowed the aforesaid writ petitions preferred by the respondents herein – original writ petitioners and by which the
High Court has held that the impugned policy of withdrawal of the benefit/incentive to the original writ petitioners is retrospective and not retroactive and quashed and set aside the Notification 16/2008 dated 27.03.2008, on the ground that bar of promissory estoppel would operate, the Union of India has preferred the present appeals.

Observations of the court:

The purpose of the original scheme was not to give the benefit of refund of the excise duty paid on the goods manufactured only on paper or in fact not manufactured at all. As the purpose of the original notifications/incentive schemes was being frustrated by such unscrupulous manufacturers who had indulged in different types of tax evasion tactics, the subsequent notifications/industrial policies have been issued allowing refund of excise duty only to the extent of the duty payable on the actual value addition made by the manufacturers undertaking manufacturing activities in these areas which are absolutely in consonance with the incentive scheme and the intention of the Government to provide the excise duty exemption only in respect of genuine manufacturing activities carried out in these areas.

The judgement of the court:

Now, so far as the Civil Appeals @ SLP © Nos. 14751/2013, 14752/2013, and 14753/2013 are concerned, the challenge to notification Nos. 16/2008-CE and 33/2008-CE FAIL and the Excise authorities have in fact allowed the refund of
excise in line with the subsequent notification Nos. 16/2008-CE and 33/2008-CE which are now upheld by this Court, the present appeals deserve to be dismissed and are accordingly dismissed. NO COSTS

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