S. Ranganathan, J.
1. The petitioners, M/s Ceat Tyres of India Ltd., carry on business, inter alia, as manufacture of tyres and tubes and for that purpose have a factory at Bhandup in Greater Bombay. The tyres and tubes manufactured by the petitioners were subjected to excise duty on an ad valorem basis in the case of tyres for motor vehicles originally at 60% and subsequently at 55% and in the case of others at 25%. However, by a notification No. 198/76 dated 16.6.1976 issued under Rule 8(1) of the Central Excise Rules, 1944 the Central Government granted an exemption of excise duty on the production of the assessed beyond a particular limit and it is the scope of this notification that calls for interpretation in this writ petition.
2. Broadly speaking, the purport of the notification was that where the production of the goods by the asses-see exceeded that during a base period (hereinafter called the 'base clearance'), the further production of the goods of the description in issue in the present case should be exempted 'from so much of the duty of excise livable thereon...as is in excess of seventy-five per cent of such duty, subject to the following conditions'. Sub para 2 of the Notification provides that for the purpose of determining the base period the clearances of all specified goods from a factory should be compared in terms of weight, number or volume except where excise duty is chargeable on ad valorem basis. In the latter case sub-paragraph (b) of para 2(1) provides that the value shall be the assessable or tariff value under the Central Excises and Salt Act 'as adjusted with reference to the average index number of wholesale prices in India for manufactures (New Series : Base 1961-62 2100) issued by the Government of India in the Ministry of Industry and Civil Supplies for the relevant financial year.' Sub-para (2) of para 2 provides the methods of determination of 'the base period and base clearances, in relation to a factory'. This has to be determined after comparing the clearances of specified goods under sub-paragraph (1) in the following manner:
(a) where the specified goods were or are cleared from a factory for the first time on or after the 1st day of April 1976, the base period shall be the year 1975-76, and the base clearances shall be nil ;
(b) where the specified goods were cleared from a factory for the first time on or after the 1st day of April 1973, but not latter than the 31st day of March, 1976, the base period shall be the three financial years, namely, 1973-74, 1974 75 and 1975-76 and the base clearances shall be one-third of the aggregate of the clearances of such goods during such base period ;
(c) Where the specified goods were cleared from the factory for the first time earlier than the 1st day of April 1973, the base period shall be the year in which the aggregate of the clearances of such goods during any of the financial years 1973-74, 1974-75 and 1975-76 was the highest and the clearances during such base period shall be the base clearances.
The present petitioners' case falls under the third of the above categories. The above notification came into force on 1.7.1976 and remained in force till 31.3.1979 in respect of these goods.
3. It may be appropriate here to to draw attention to a press-note issued by the Government of India on the same day explaining the terms and provisions of the Notification. This press-note begins by saying:
The Government of India today announced a scheme for grant of relief in respect of selected commodities to the extent of 25% of duty payable on goods produced in excess of production in a selected base year.
The proposal to introduce the scheme to encourage higher production was made by the Finance Minister while presenting the budget for the current year to Parliament.
The Scheme as finalised now in the context of excise relief already now in the context of excise relief already announced underlines Government's all out efforts to boost production in farms and factories.
4. The press-note thereafter proceeds to explain the scheme of the concession that was granted and pointed out that 'In a few cases where clearances are to be determined in terms of value, attempt has been made to neutralise the effect of price escalation to extent possible'.
5. In pursuance of the above notification the petitioner filed declarations giving its calculations of the base clearances available to it in terms of the notification. According to the petitioners so far as tyres were concerned the maximum production after converting the value in terms of the average index number of wholesale prices) for the financial year 1975-76 was the highest. It was claimed that production in this year, namely, 31, 36, 15, 714.10 should be treated as the base clearance for tyres and that the clearances during the period commencing 1.4.1976 will be entitled to exemption under the notification. Similarly the petitioners claimed that so far as tubes were concerned the financial year 1975-76 would be the base year and that the base clearance would be 2, 23, 86, 920. These calculations were considered by the department and the Assistant Collector of Central Excise approved the declarations made by the petitioners on 28.12.1976.
6. On 25.1.1977 the petitioners applied to the Superintendent of Central Excise pointing out that the petitioners had exceeded the base clearance value for tubes on 13.11.1976 and for tyres on 18.11.1976 and that in terms of the notification a refund of Rs. 76,41,262.71 was due to the petitioner as differential duty.
7. At this stage on 18.2.1977 the Government of India issued certain administrative instructions regarding the scope of the notification and the scheme of excise duty relief granted by it to encourage higher production.
Para 2 of this telex message can be extracted here as the controversy between the parties turns on the propriety of this instructions:
2. A question has been raised whether under Notification No. 198/76-CE dt. 16-6-76, as amended, it is obligatory on the part of manufactures to pass on the benefit of the duty exemption to consumers. It may be observed that the exemption Notification does not specify any such condition. However, Central Excise officers have to ensure that in the case of goods chargeable to duty with reference to value, the correct assessable values are arrived at under Section 4 of the Central Excise and Salt Act, 1944, and the reduced rate of duty is taken into consideration for deriving the Assessable value from the sale price of the goods (which is inclusive of the duty element). To illustrate, if in spite of the reduction in the duty payable on account of the exemption under the aforesaid Notification, an assessed maintains his price at the level at . which the goods were sold before he became so eligible to pay the reduced rate of duty, then his Assessable value has necessarily to be more than the Assessable value declared by him prior to the exemption. The assessable value should be worked out as follows:
Assessable Value = Sale price (Cum duty price) x100---------------------(100 + Reduced Rate)The Excise duty will be livable at the reduced rate on the assessable value as determined above (?) For example, if in a case, the rate of duty is 20% then by virtue of the above Notification this rate will get reduced to 15% (75% of 20%)' Now, if before the exemption, the sale price (cum duty price) of the assessed was Rupees 120/- and the assessable value was Rupees 100/- and if even after the exemption, the assessed continues to sell the goods at Rupees 120/- then the assessable value will be determined as follows:
100Rupees 120 x --------------------- =(100 + 15)Rupees 120 x 100--------- =115Rs. 104.35.The duty livable will be 15% of Ruppes 104.35.
8. This message was followed by a press-note to the same effect and also a trade notice issued by the Bombay Central Excise Collectorate. Soon after this a second development also took place. This was that on 11.5.77 the Assistant Collector of Central Excise recomputed the base clearance value available to the petitioners. According to him the base clearance value on tyres worked out Rs. 38,57, 65,63.296 instead of Rs. 31,36,15, 714.10 approved earlier and the base clearance value in respect of tubes was raised to Rs. 2,75,37,219.34. It was explained that the base clearance value should have been the value shown under Section 4 instead of clearance value based on average index number of wholesale prices.
9. On 7.9.1977 the respondents wrote a letter to the petitioners. Referring to the fact that the petitioners had availed themselves of concession of excise duty on tariff item No. 16 (1) & (3), the petitioners were required to inform whether the concession of 25% of excise duty had been passed on to the dealers or retained by the petitioners. This letter was obviously the direct consequence of the administrative instructions issued by the Government of India on 18.2.1977 and in the first instance perhaps several manufactures took up the issue with the Government by means of a joint representation. However, on 14.11.1977 the petitioners gave a detailed reply. In this reply three points were taken by the petitioners.
1. The query raise was entirely irrelevant for the purposes of the notification and the manufacturer was entitled to avail himself of the concession under the notification whether or not he passed on the benefit to his customers;
2. Due to the constant increase in costs of raw material and labour, the petitioners would have been compelled to increase the prices of their products but for the concession and that it was in these circumstances that the concession or any part of it had not been passed on to the consumers ; and
3. The query did not take into account the extreme practical difficulty involved in passing on any such concession. The prices were fixed at the beginning of a particular period and at that stage the petitioners could not predict what the production would be during the entire year and to what extent the concessions would be available. Frequent changes in the prices based on the concession available would not be a practical proposition.
The Explanationn apparently was not satisfactory to the respondents. the Superintendent of Central Excise wrote to the petitioner on 19-12-1977 stating that the differential duty on the basis of the instructions and trade-notice dated 5.4.1977 should be paid immediately. There was a further reply by the petitioners on 10.1.1978 and eventually on 9.6.1978 the respondents issued a show cause notice calling upon the petitioners to pay a sum of Rs. 85,23,158.58 in respect of the clearances between 29.12.76 to 31.3 77 (for the financial year 1976-77) and in respect of the clearances between 14.12.77 to 31.3.78 (for the financial year 1977-78). This was followed by another show cause notice dated 23.8.78 claiming a sum of Rs. 2,44,125/- in respect of the special additional excise duty for the period 1.3.78 to 31.3.78. The petitioners submitted their reply to the above notices and on 6.12.78 the petitioners' claim was rejected and an order was passed by the Assistant Collector of Central Excise confirming the demands for Rs. 85,23,158,58 and Rs. 2,44,125.52 above referred to.
10. In the meantime, on 24.10.78, the petitioners had applied to the Superintendent, Central Excise, for a refund of Rs. 71,69,711.26 in respect of financial year 1977-78 on the basis that the basic clearances had been exceeded, in regard to tyres on 10.11.77 and in regard to tubes on 29.10.77.
The present writ petition has been filed seeking orders quashing the directives issued by the respondents by way of press-note and telex message and trade notice and the orders passed pursuant thereto by respondent No. 2. It is also pointed out that the application for the refund filed by the petitioners on 25.1.77 was returned to the petitioners on 23.1.1978 on the ground that no question of refund arose and that though this was represented on 22.7.1978, no further action has been taken thereon. Orders or directions are, thereforee, sought directing respondents Nos. 2 & 3 to refund to the petitioners the amounts of Rs. 76,41,262.71 and Rs. 71,69,711.26 as prayed for by the petitioners in their applications for refund dated 25.1.77 and 24.10.78.
11. The points of controversy between the petitioners and the respondents lie in a narrow compass and are two in number. The first is that according to the petitioners, they are eligible to a refund of excise duty levied in respect of the production in excess of the base clearances to the extent of 25% of the duty livable in respect thereof. On the other hand according to the respondents the amounts refundable to the petitioners cannot be calculated in such a simple fashion and that in a case where the benefit of reduction in the excise duty on account of the exemption conferred by the Notification is not passed on to the consumers, the assessable value of the goods in question has to be worked out and the petitioners will be entitled only to a much smaller benefit than has been asked for by the petitioners. The second point of controversy is that, according to the petitioners, the figure of base clearances has to be arrived at after an adjustment for the cost of living index number, whereas, according to to the respondents, the cost of living index and an adjustment by reference thereto was relevant only for fixing or determining the base period but that such an adjustment was irrelevant for arriving at the figure of base clearances. It is not necessary to go into the details of the figures and the working because these are the only two points of principle that have been urged before us by the counsel on the two sides.
12. Both the issues which are raised are directly covered by a decision of the Division Bench of this Court (V.S. Deshpande and H. L. Anand, JJ.) in Modi Rubber v. Board of Central Excise and Customs I.L R. 1978 (2) Del 352. On the first point this Court has held in the above judgment that the press-note and the trade-notice and the telex message conveying administrative instructions had not given a proper interpretation of the effect of the exemption notification and that since they are purely administrative orders, they will not have the effect of modifying the statutory notification under Section 8 of the Act. In paragraph 11 of the judgment, the court set out the contention raised on behalf of the Government;
Under Section 4 of the Central Excises and Salt Act, 1944 the specific method of determination of the assessable value for the purpose of payment of Central Excise Duty provides that the assessable value has to be so assessed that the benefit of the relief has to be passed on to the consumers. In the instant case admittedly the petitioner has not passed on such relief either in part or in whole to the consumer.
In other words the contention of the respondent was that the petitioner would be entitled to the full benefit of duty rebate only if it reduced the price proportionately to the reduction in duty so as to pass on the benefit of such reduction to the purchasers of the tyres and tubes. After examining the scheme of the levy of excise duty contained in Section 3 of the Act, on the value determined in accordance with the provisions of Section 4, the court pointed out that it was open to the Government to grant an exemption subject to conditions. If the object of the Government in granting the exemption was to benefit the consumers by the reduction of the selling price of the goods then the Government Notification granting the exemption itself should have said so. It was pointed out that one notification No. GSR 1089 dated 29.4.1969 did specifically mention such a condition which did not find a place in the notification in the present case. The notification, it was pointed out, had statutory force and after issuing such a notification no conditions could be imposed by way of administrative directions, guidelines or press-note. In paragraph 19 of the judgment it was pointed out that the notification did not make any classification between the manufacturers who passed on the benefits to the consumers and those who did not. The point raised in the counter affidavit of the respondents was met in paragraph 21 of the judgment which may be now extracted:
Mr. Dewan further pointed out that in order to determine the excise duty livable on the items produced by the petitioner, it is necessary first to determine the assessable value under Section 4 of the Act. It is only after the assessable value is determined that the excise duty livable thereon is ascertained. It is erroneous to suggest, as is done by the Government, that assessable value will have to be again determined after taking into consideration the relief and exemption granted under the notification, dated 16th June, 1976. It is neither intended by the notification nor is it practicable that the assessable value should be determined after giving effect to the relief and the exemption contemplated under the said notification. This in effect would be the stand of the Government by its insistence that it is only when the benefit of the rebate in duty is passed on by the manufacturer to the consumers that the manufacturer becomes entitled to the benefit of exemption from duty. In other words if the price to the customer inclusive of duty remains the same and the duty livable thereon is calculated and thereafter the relief permissible under the notification is reduced, as the Government intends to do, then according to the suggestion in the show cause notices, the assessable value would thereafter have to be recalculated and it would be higher than the assessable value on which the excise duty livable was calculated in the first instance. Having arrived at this assessable value if the duty is then to be calculated, it would not be the same as before and in this manner the calculation would keep on changing. Such a procedure would keep on changing. Such a procedure would lead to an absurd situation.
13. The judgment proceeded to point out that there could have been no intention underlying the notification that the benefit should be passed on to the consumers in order to be eligible for the concession and that this would be clear from the fact that in cases where the excise duty is calculated on the basis of fixed tariff values or on volume, weight or number, there was no such requirement. It was pointed out that giving different interpretations to the said notification in respect of goods subjected on the one hand to ad valorem duty and on the other hand to duty or the basis of tariff values or weight, volume or number would lead to discrimination which cannot be supported on the basis of reasonable classification between the two and would be contrary to Article 14 of the Constitution.
14. So far as the question regarding the adjustment of values for the base clearances is concerned the court observed as follows:
It was argued by Mr. Lokur for the respondents that paragraph 2 (1)(b) was concerned with the determination of the base period and not of the base clearances. It is true that para 2 (1) starts with the words 'for the purpose of determining the base period'. But base period itself is determined only by the fixation of the base clearances. In fact, base period has no meaning except in relation to base clearances. The base is of clearance and not of any period. The base period simply means the period for which the clearance is to be taken as the base clearances. It is because this is taken as the base clearances the time to which the base clearance extends is simply called the base period. Once this is realised, the meaning of paragraph 2 (1) (b) becomes clear. It is wholly devoted to the modification of the value of the goods found under Section 4 of the Act by adjustment of the said value with the wholesale price index number. It is because such adjustment is not contemplated in Section 4 that paragraph 2 (1) (b) of the notification was enacted. The exemption of duty is, thereforee, to be given not on the value found under Section 4, but after adjustment of that value made under paragraph 2(1)(b). The making of such adjustment is necessary only for the purpose of finding out the clearance of the goods. When such a clearance is found for a particular period, it becomes the base clearance for that base period.
The court proceeded to observe that the contents of paragraph 2 (2) of the notification were quite clear and that the base clearances have to be determined in terms of value as adjusted under paragraph 2(1)(b) of the notification.
15. Mr. Chandrashekheran, learned Counsel for the respondents, sought to contend that the decision of the earlier Division Bench requires reconsideration. So far as the second point is concerned his only plea was that the adjustment of values had been provided for only in sub-paragraph (b) of paragraph (2)(1) and that this related only to the determination of the base period. He contended that once the base period is determined no question of adjustment of values would arise so far as the determination of base clearances is concerned. In our opinion this argument totally looses sight of the entire purport and basis of the notification. As pointed out earlier the very simple scheme envisaged by the notification is that the manufacture of goods in excess of those cleared during a base period should be eligible for exemption. Where the excise duty is determined on an ad valorem basis this required a comparison of the value of the goods manufactured during the several years under consideration. The value of the goods produced by the petitioners in the financial years 1973-74, 1974 75 and 1975-76 were necessary in order to arrive at the base period. In the case of the present assessed the base period is determined as the year in which the value of such production among these three years was the highest whereas in the Modi Rubber case (supra) it was taken as the average of the production of the three financial years above referred to. But it will be obvious that it would be irrational to compare the value of the production in the year of present assessment with the value of the production in the base year without adjustment for the price index. To contend that an adjustment of values will be relevant only for determination of the base year and that it is to be ignored for determining the base clearances appears to us totally to misconceive the whole object and intent of the notification which was to neutralise the effect of escalation in the prices over the years to the maximum extent possible. If an adjustment of values is considered necessary even while comparing the production between the three consecutive years 1973-74, 1974-75 and 1975-76 to determine the base period, it would appear that such an adjustment is all the more necessary when comparing the clearances between the base period and the period in which the goods are manufactured. This specific contention of Mr. Chandrashekheran has already been dealt with by the Division Bench in the Modi Rubber case. We are unable to see any grounds to differ there from and hence this contention of the respondents is rejected.
16. So far as the first point is concerned, again the attempt of the learned Counsel is to contend, though in a slightly different form than was urged before the earlier Division Bench, that what has been directed by the telex message and the trade-notice is in accordance with law and is not contrary to the terms of the notification. Mr. Chandrashekheran presented to us a very simple arithmetical formula which he contended, followed from the very language of Section 4 and which, according to him, has necessarily to be applied in determining the assessable value in all cases where excise duty has to be levied on an ad-valorem basis. He drew our attention to Section 4 of the Central Excises and Salt Act after its amendment with effect from 1.10.1975. He pointed out that according to this section read with Section 4 (4) (d) the assessable value has to be determined as the normal price for which the goods are sold in a wholesale market less certain deductions of which we are at present concerned only with excise duty. To put it shortly:
AV = NP = EDwhere AV = Assessable Value.NP = Normal Price.ED = Excise Duty.Re-arranging the above equation we get:
AV + ED = NP
But the excise duty is a particular percentage, say r% of the assessable value. thereforee, the above formula becomes:
rAV + -------- (AV) = NP.100 or AV (100 + r) = 100 NP.NPor AV = 100 x -------- 100 + r He invited our attention to the fact that the telex message only sets out this formula. He, thereforee, contended that trade-notice did not intend to meet out any separate or discriminatory treatment to manufacturers who did not pass on the benefits of the rebate in excise duty to consumers. According to him the reduced benefit in such cases which the department is prepared to extend to them is a necessary consequence of the fact that, by their not having reduced their prices to give effect to the relief in excise duty which they were enjoying, the assessable value on the above formula, gets automatically increased. Thus, for example, he pointed out that if we take the case of a petitioner whose base clearance is, say, 10,000 tyres which are sold at Rs. 120/ -each, (on the basis of a manufacturing cost of Rs. 100 and E.D. 20%) the assessable value for the first 10,000 tyres would be got by the formula above mentioned as:
120100 x ---------- = Rs. 100/-100 + 20 Where the above assessed exceeds the basic clearance and manufactures 1000th a tyre, the concession under the Notification is open to him. He may choose to pass on the benefit of excise duty concession to the consumers and reduce the selling price to Rs. 115/- or he may choose not to pass on the benefits and, thereforee, continue to sell the tyres at Rs. 120/- each. In the former case the assessable value of the goods derived by the above formula would be:
115100 x ----------(100 + 15) or Rs. 100/-.But in the latter case it will be: 120100 x ---------- = 104.35.(100 + 15) The excise duty payable thereon will be 15% thereof
or Rs. 15.65.
In other words even if this formula is applied the excise duty livable is Rs. 15.65 and not Rs. 20/- as before. What the petitioners want and counsel say, is that notwithstanding the fact that the sale price of the goods has not been reduced the assessable value should be determined at Rs. 100/- and the duty restricted only to Rs. 15/-. Mr. Chandrashekheran contended that this contention runs counter to the provisions of the Act and cannot be accepted. In other words the whole attempt of the learned Counsel is to contend that the trade-notice and the administrative instructions do not seek to make any distinction between the persons who pass on the excise duty and persons who do not. All that these instructions attempt is to awaken the departmental officers to the provisions of Section 4 of the Central Excise Act and to ensure that there is a proper computation of the excise duty in cases covered by the notification.
17. The argument of the learned Counsel for the respondent is very interesting and in arithmetical terms also appears to be impressive. But in our opinion this contention cannot be accepted. In the first place, though the argument is now put forward that the administrative instructions are merely intended to give effect to the law and not to deviate from the terms of the notification and that stand has also been taken in the counter affidavit in the present case, this does not appear to have been the position taken up at the earlier stages. The order of the Assistant Collector refers to the intention behind the notification to give relief only in cases where the profit is passed on to the consumers. In the case of Modi Rubber Ltd. it was argued on behalf of the department on general grounds that the incidence of excise duty was ultimately on the consumers and that it was not the intention of the Government to enrich the producer of the goods without any benefit to the consumers. If one has to look at the intention of the Government in issuing the notification, it appears that Shri Anil Dewan, counsel appearing for the petitioners, is right in pointing out that the policy of the Government in announcing the exemption was to boost the production of certain types of goods which were essential for the purposes of the community. As learned Counsel rightly pointed out, the object of the Government Was that if the excise duty livable on the commodity were reduced and the benefit thereof given to the manufacturers where the production exceeded that of a base period, the manufacturer attracted by the relief given to him, would increase the production and thus serve the interests of the community. It could not have been the intention behind such a policy that the benefit of such relief should be passed on to the consumers because, if as a result of the reduction or relief granted in excise duty, the manufacturers were expected to reduce the price, then the incentive to increase the production would not be there at all. So, it does appear that as a matter of intention at least in the first instance, the idea behind the notification was that the benefit of reduction of excise duty should be available to the manufacturers. This was clearly the position in respect of commodities on which excise duty was levied by reference to weight, volume or number. As pointed out by learned Counsel for the petitioners out of 43 items listed in the notification there were only 14 items on which excise duty was livable on ad-valorem basis. In respect of all the other items the manufacturer would have got the benefit of the reduction in excise duty and there is nothing to show that the intention was to put the manufacturers of tyres and tubes or other ad-valorem articles on a different footing and give them reduced relief.
18. However, it is not sufficient for us to say that this was the policy behind the notification. We have to examine whether on the language of the notification and a proper interpretation of the words employed therein the construction put forward by the learned Counsel for the respondents can be upheld. The terms of the notification have been set out earlier. The notification states that in respect of the specified goods where the manufacturer exceeds the specified quantity the production will be exempted from the excise duty livable thereon to the extent it is in excess of 75% of such duty. In other words before the terms of the notification are applied it is necessary to determine the excise duty which would be payable on the articles manufactured Since the excise duty, as pointed out. by the learned Counsel for the respondents, is a percentage of the assessable value, it is necessary, in order to determine the excise duty leviable, that the assessable value should be determined in the first instance. From the excise duty so livable the goods are exempted to the extent of the duty in excess of 75%. In other words even in a case where the production exceeds the base clearance the first procedure that is necessary to apply under the notification is to determine the assessable value, arrive at the excise duty livable and then grant an exemption in respect of a part thereof. In other words before we can arrive at the figure of relief or exemption available to assessed, the assessable value stands determined by reference to the original excise. duty normally livable in respect thereof. The argument of the learned Counsel for the respondent in our opinion, over simplifies the problem. To take up the illustration which he has given, he has assumed that since the duty previously payable was 20% and since relief given was to the extent of 25% the excise duty livable in respect of the excess production in 15% and it is on this footing that be starts determining the assessable value. But the course suggested by him is not correct on a proper interpretation of the notification. The formula put forward on behalf of the respondents envisages a calculation of the assessable value in two stages. To take up again the example which we have already given of 1000 tyres from the factory which are sold at Rs. 120/- each and assuming the original excise duty to be 20% the determination in terms of the notification will be as under:
Normal Price. Rs. 120/-Less Excise Duty. Rs. 20/-thereforee assessable value.Rs. 100/-thereforee duty payable Rs. 20/-Exemption available under notifi-cation. Rs. 5/-
All that the notification contemplates is that the assessed should be entitled to relief to the extent of Rs. 5/- but what the learned Counsel for the respondents says is that since the assessed is selling the goods at Rs. 120/- and since he is paying an excise duty only of Rs. 15/-, the assessable value should be re-calculated and the excise duty should also be re-calculated. In other words, the learned Counsel for the respondents really seeks a re-calculation of the assessable value after giving effect to the notification even though it has already been arrived at while computing the duty livable in the first instance. It is this aspect of the department's contention which had been pressed in the previous case though not in the same arithmetical terms and which has been specifically considered by the Bench in paragraph 21 and rejected. We are, thereforee, of opinion that the learned Counsel for the respondent is not addressing really any new argument other than what has already been considered by the Division Bench and rejected.
19. For the above reasons we do not see any grounds to differ from the conclusion of the Bench of this Court in Modi Rubber Ltd.'s case. The above view has been followed by learned single judges of this Court in the orders dated 2.11.1978, 24.5.79 and 9.7.1979 in C.W. 501 of 1978 (Madras Rubber Factory Ltd.), C.W. 1006/78 (Indian Aluminium) and C.W. 147/79 (Chemicals and Plastics India Ltd.) respectively. We are, thereforee, of opinion that 'a writ of certiorari should issue quashing the administrative instructions, the press-note and the trade-notice purporting to effect a reduction in the extent of exemption available to manufacturers who do not pass on the benefit of the exemption to the consumers'. We also set aside the order of the second respondent dated 6.12.1978. We direct the respondent to dispose of the refund applications filed by the petitioners on 25.1.1977 (represented on 22.7.1978) and 24.10.1978 in accordance with law and determine the correct refunds due to the petitioners, in the light of the above clarification as to the interpretation of the notification No. 198/76 dated 16.6.1976.
The writ petition is allowed as indicated above. We, however, make no order as to costs.