Page 199 - GSTL_2nd April 2020_Vol 35_Part 1

2020 ] HERO MOTOCORP. LTD. v. UNION OF INDIA 101
hand. It was operating and registered under the Central Excise Act, 1944. With
the introduction of Goods and Services Tax (“GST”) w.e.f. 1-7-2017, it now has
registration under the said Central and State GST Acts.
2. In the year 2002, special packages of incentives were announced to
promote industrial development in the State of Uttarakhand. In pursuance there-
to, the 1st Respondent-Union of India through the 4th Respondent-Ministry of
Commerce & Industry issued an Office Memorandum dated 7-1-2003, detailing
the package of incentives. The fiscal incentive provided under the memorandum
included 100% ab inito Central Excise Duty Exemption to new industrial units for
a period of 10 years from the date of commencement of commercial production.
The relevant extract of Office Memorandum/Policy read as under :
“3.1 Fiscal Incentives to new Industrial Units and to existing units on their sub-
stantial expansion :
(1) 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 per cent) outright excise duty exemption for a period
of 10 years from the date of commencement of commercial produc-
tion.
(b) 100% income tax exemption for initial period of five years and
thereafter 30% for companies and 25% for other than compa-
nies for a further period of five years for the entire states of Ut-
taranchal and Himachal Pradesh from the date of commence-
ment of commercial production.
(II) All New Industries in the notified location would be eligible for capi-
tal investment subsidy @ 15% of their investment in plant & machinery,
subject to a ceiling of Rs. 30 lakh. The existing units will also be entitled to
this subsidy on their substantial expansion, as defined.
(III) Thrust Sector Industries as mentioned in Annexure-II are entitled to
similar concessions as mentioned in paras 3(I) & (II) above in the entire
state of Uttarakhand and Himachal Pradesh without any area restrictions.”
3. In line with the objective of the above noted memorandum and in
order to implement the incentive scheme, the Central government, on being sat-
isfied that it is necessary in the public interest, issued Notification No. 50/2003-
C.E, dated 10-6-2003 (hereinafter referred to as “exemption notification”) in exer-
cise of powers conferred by sub-section (1) of Section 5A of the Central Excise
Act, 1944 (1 of 1944) read with sub-section (3) of Section 3 of the Additional Du-
ties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-
section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile
Articles) Act, 1978 (40 of 1978). This notification exempted certain goods from
whole of the duty of excise, or additional duty of excise, as the case may be, levi-
able thereon under any of the said Acts, in respect of certain industrial units lo-
cated in the State of Uttarakhand (earlier Uttaranchal) and Himachal Pradesh.
The notification also provided that the exemption shall apply to industrial units
for a period not exceeding 10 years from the date of publication of notification in
the Official Gazette or from the date of commencement of commercial produc-
tion, whichever is later.
GST LAW TIMES  2nd April 2020  263