1993 (3) TMI 272 - AT - Central Excise

Summary

Issues:
Calculation of special excise duty under Section 50(1) of the Finance Act, 1982 - Whether special excise duty is to be determined first or proforma credit/set-off is to be availed first.

Analysis:
The only issue in the appeal was the method of calculating special excise duty under Section 50(1) of the Finance Act, 1982. The argument revolved around whether the special duty of excise should be determined first, or if proforma credit/set-off should be availed first. The appellant's counsel relied on a judgment by the Delhi High Court in the case of Goodyear (India) Ltd. v. Union of India, 1990 (49) E.L.T. 39, which interpreted the relevant provisions. It was argued that the exemption by set-off had to be claimed before the specified duty of excise was levied, as per the legislative intent. The Tribunal had also previously ruled similarly in the case of Indian Plywood Manufacturing Co. Ltd. v. Collector of Central Excise, Bangalore, 1983 (13) E.L.T. 1243. The Revenue representative agreed with the appellant's interpretation in this case.

The appellants were involved in manufacturing tyres, tubes, and flaps classified under Chapter 40 of CET 1985. They used raw materials classified under Tariff item 68, on which duty was paid. Exemptions were granted by the Central Government on the products manufactured by the appellants to the extent of duty paid on inputs. The dispute arose when the authorities alleged that the appellants incorrectly paid special duty of excise on goods cleared during a specific period. The appellants contended that as per the Finance Act, 1982, the basic excise duty chargeable should be determined first, giving effect to any notification in force, and then special duty of excise should be calculated. However, the authorities did not accept this argument, leading to the appeal. The Tribunal, considering the facts and the legal position, sided with the appellants and set aside the orders of the lower authorities.

In conclusion, the Tribunal allowed the appeal in favor of the appellants, providing them with consequential relief as per the law. The judgment clarified the correct method of calculating special excise duty under the relevant provisions of the Finance Act, 1982, emphasizing the importance of giving effect to exemption notifications before levying specified excise duties.