2000 (11) TMI 1160 - AT - Central Excise

Summary

Issues:
1. Interpretation of exemption Notification 175/86 for excisable goods under different chapters of the Central Excise Tariff.
2. Correct application of duty demand on clearances exceeding Rs. 30 lakhs.
3. Contradictory decisions by the Tribunal on the interpretation of "first clearances" in the notification.
4. Legal status of the Larger Bench decision in Ramakrishna Engineering Works v. C.C.E.
5. Binding precedent of the Supreme Court's dismissal of the appeal against the Tribunal's decision.

Analysis:

Issue 1: Interpretation of exemption Notification 175/86
The appellant, engaged in manufacturing excisable goods under different chapters, availed exemption under Notification 175/86. The dispute arose when duty was demanded on clearances exceeding Rs. 30 lakhs, alleging non-compliance with the exemption conditions.

Issue 2: Correct Application of Duty Demand
The Assistant Collector upheld the duty demand, but the Collector (Appeals) reversed this decision, citing precedent cases. The department appealed this decision, leading to the current case.

Issue 3: Contradictory Tribunal Decisions
The appeal highlighted conflicting Tribunal decisions on interpreting "first clearances" in the notification. The matter was referred to the Larger Bench, which emphasized the chronological order of clearances to limit exemption within the total ceiling.

Issue 4: Legal Status of Larger Bench Decision
The Tribunal noted the dismissal of an appeal by the Supreme Court against a similar case, indicating the binding precedent of the Larger Bench decision. This influenced the decision to follow the interpretation favoring the Department's appeal.

Issue 5: Binding Precedent of Supreme Court's Dismissal
The Supreme Court's dismissal of the appeal confirmed the Tribunal's decision as a binding precedent, contrary to the Tribunal's earlier ruling. This led to the allowance of the Department's appeal, setting aside the Commissioner (Appeals) order and restoring the Assistant Collector's decision.

In conclusion, the judgment resolved the issues by interpreting the exemption notification, clarifying duty demands, reconciling contradictory Tribunal decisions, and affirming the binding precedent set by the Supreme Court's dismissal.