Hon'ble Judges/Coram:
L. Nageswara Rao and Sanjay Kishan Kaul

JUDGMENT

Sanjay Kishan Kaul, J.

1. Leave granted.

2. The appeal raises the legal question of the liability towards Section 136 - National Calamity Contingent Duty (for short 'NCCD'), Education Cess and Secondary & Higher Education Cess of a manufacturing establishment, which is exempted from payment of Central Excise Duty (for short 'CENVAT') under the Central Excise Act, 1944 (hereinafter referred to as the '1944 Act').

3. In order to encourage development of industries and to generate employment in the States of Uttarakhand and Himachal Pradesh, certain special measures were considered appropriate to be taken by the Government of India. On the visit of the Prime Minister of India to Uttarakhand, in March, 2002, an announcement was made that tax and Central Excise concessions, to attract investments in the industrial sector will be worked out for the Special Category States including Uttaranchal (now Uttarakhand). The industries eligible for such incentives were to be environment friendly, with potential for local employment generation and use of local resources. Subsequently, an Office Memorandum was issued on 7.1.2003, announcing a package of incentives providing for "New Industrial Policy and other concessions for the State of Uttaranchal and the State of Himachal Pradesh." Para 3.1 (I) stipulated the fiscal incentives. It is not necessary to reproduce the complete paragraph, but suffice to reproduce the relevant portion as under:

3.1: Fiscal Incentives to new Industrial Units and to existing units on their substantial expansion:

(I). New industrial units and existing industrial units on their substantial expansion as defined, set up in Growth Centres, Industrial Infrastructure Development Centres (IIDCs), Industrial Estates, Export Processing Zones, Theme Parks (Food Processing Parks, Software Technology Parks, etc.) as stated in Annexure-I and other areas as notified from time to time by the Central Government, are entitled to:

(a) 100% (hundred percent) outright excise duty exemption for a period of 10 years from the date of commencement of commercial production.

(b) 100% income tax exemption for initial period of five years and thereafter 30% for companies and 25% for other than companies for a further period of five years for the entire states of Uttarakhand and Himachal Pradesh from the date of commencement of commercial production.

4. In order to implement the aforesaid policy initiative, the Central Board of Excise & Customs (for short 'CBEC') issued Notification No. 50/2003-Central Excise : MANU/EXCT/0046/2003, dated June 10, 2003, in exercise of powers conferred Under Section 5A of the 1944 Act. The relevant portion of the Notification reads as under:

GENERAL EXEMPTION No. 41

Exemption to goods other than specified goods cleared from units located in the Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or I........