2004 (6) TMI 494 - AT - Central Excise

Summary

Issues:
1. Eligibility for exemption under Notification No. 175/86 and Notification No. 1/93-C.E.
2. Interpretation of Notification No. 119/89-C.E. regarding value of clearances.
3. Adjustment of duty deposited prior to 27-4-1989 against confirmed duty.
4. Appeal for deduction of duty by treating entire realization as cum-duty price.

Eligibility for Exemption under Notifications:
The appellant was working under Notification No. 175/86 until 31-3-1993 and under Notification No. 1/93-C.E. thereafter. The issue arose when the total value of clearances by the appellant exceeded Rs. 150 lakhs during the financial year 1988-89, making them ineligible for exemption in the next financial year. The revenue contended that the appellant was required to pay full duty during the period from 1-4-89 to 27-4-89. Consequently, duty of Rs. 1,84,900/- was confirmed against the appellant.

Interpretation of Notification Criteria:
The appellant's advocate acknowledged that a Larger Bench decision held that the enhancement of the value limit of clearances under Notification No. 119/89-C.E. to Rs. 200 lakhs was effective prospectively from 27-4-1989. Another Larger Bench decision clarified that duty paid on goods cleared before availing the benefit of Notification No. 1/93-C.E. should be treated as deposits. The appellant sought adjustment of duty deposited prior to 27-4-1989 against the confirmed duty.

Adjustment of Duty Deposits:
The revenue argued against the adjustment, stating that the appellant was required to pay duty during 1-4-1989 to 26-4-89, precluding any adjustment. The Tribunal found no justification for the adjustment, citing a different case where duty was adjusted only for clearances after reaching the exemption slab. The duty confirmed against the appellant for the mentioned period was upheld without adjustment.

Deduction of Duty as Cum-Duty Price:
The appellant requested deduction of the confirmed duty by treating the entire realization as cum-duty price, referring to a Larger Bench decision in another case. The Tribunal agreed with this plea, directing the original adjudicating authority to requantify the demand by allowing the benefit of duty deduction. The appeal was disposed of accordingly.