Acc LTD. vs. Secy.Industries Deptt.

Held

The Court held that the impugned letter dated March 4, 2015, was set aside to the extent it declined consideration of the Petitioner's application on the ground that the unit was not a "new" industrial unit. The Court reasoned that the subsequent Resolution dated December 9, 2015, which removed the "new" requirement, should be considered, and the Petitioner's claim should not be rejected solely on the basis of the original unit being established before IPR 2007 or the manufacturing process involving grinding or mixing. The Court also considered the inspection and verification reports, particularly the RIC report dated June 23, 2012, which indicated significant utilization of waste products (slag at 52.6%), supporting the Petitioner's claim under the amended definition of "Downstream Industry." The Court directed the competent authority to consider the Petitioner's claim for recognition as a downstream Thrust Sector industry in light of the existing reports and the relevant Resolutions. If found eligible, the authorities are to process the claim for VAT reimbursement under Clause 18.4(iv) of IPR 2007, determine the admissible amount, and release it within specified timelines. The Court expressly left undecided the specific amount of VAT reimbursement admissible, as this required further determination by the competent authority.

Facts

The Petitioner, ACC Ltd., sought VAT reimbursement under the Industrial Policy Resolution (IPR) 2007 for an expansion of its Bargarh Cement Works. The expansion, involving an investment of approximately ₹585.57 crore and commencing commercial production on January 1, 2011, increased the unit's capacity. The Petitioner applied for Thrust Sector status and VAT reimbursement on June 29, 2011. Various authorities conducted inspections and forwarded the claim, with IPICOL noting potential applicability under Clause 18.4(iv) subject to a Priority Sector certificate. On March 3, 2015, the definition of "Downstream Industry" was amended, requiring 50% utilization of waste products. The next day, the Additional Director of Industries rejected the Petitioner's application, stating the unit was not "new." Subsequently, on December 9, 2015, the government amended IPR 2007 to remove the "new" requirement for certain categories.

Key Issues

1. Whether the Petitioner's claim for VAT reimbursement under Clause 18.4(iv) of IPR 2007, based on the expansion of an existing unit, is maintainable despite the initial requirement for "new" industrial units, especially in light of subsequent amendments to IPR 2007? (Question of law) 2. Whether the Petitioner's unit qualifies as a "downstream Thrust Sector industry" under IPR 2007, considering the investment, increased capacity, and utilization of waste products, as evidenced by inspection reports and subsequent amendments? Petitioner's Arguments: The Petitioner argued that the impugned letter dated March 4, 2015, wrongly declined consideration of its claim based on the unit not being "new." It contended that the subsequent Resolution dated December 9, 2015, which removed the "new" requirement, should be applied retrospectively. The Petitioner also argued that its unit qualified as a downstream Thrust Sector industry, citing inspection reports and the amended definition of "Downstream Industry" requiring 50% utilization of waste products, which its operations met. They relied on the principle that subsequent amendments should be considered and that their claim should not be rejected based on the manufacturing process alone. Revenue's Arguments: The Opposite Parties argued that the Petitioner's unit was not a "new" industrial unit and therefore not eligible for incentives under the original IPR 2007. They relied on the impugned letter dated March 4, 2015, which stated the claim could not be considered as the unit was not new. The judgment does not record specific arguments from the revenue regarding the "downstream Thrust Sector industry" qualification or the impact of the amendments.