2007 (6) TMI 367 - AT - Central Excise

Summary

Issues involved: Interpretation of Section 11D of the Central Excise Act, 1944 and eligibility for incentive under Notification No. 130/83-C.E.

Interpretation of Section 11D:
The appellants claimed incentive under Notification No. 130/83-C.E. for sugar produced and cleared from their new factory. The Lower Appellate Authority denied the benefit, citing Section 11D which requires amounts collected from buyers to be paid back as duty of Excise. However, it was argued that the incentive was not collected as duty but as a separate amount. The Tribunal agreed, stating that Section 11D does not apply when the amount is clearly an incentive and not duty.

Eligibility for Incentive under Notification No. 130/83-C.E.:
The Lower Appellate Authority did not determine whether the appellants were eligible for the benefits under Notification No. 130/83-C.E. The Tribunal noted this lack of finding and decided not to delve into this question in the second appeal, as there was no adverse finding against the appellants on this issue.

Applicability of Circular on Sugar Factories:
The Lower Appellate Authority referenced a Circular stating that sugar factories are not allowed to retain incentives for levy of sugar. However, the Tribunal clarified that this Circular does not apply to the present case involving incentives for non-levy sugar. Therefore, the Circular was deemed irrelevant in this context.

Decision:
Based on the above findings, the Tribunal set aside the impugned order and allowed the appeal, granting consequential benefits to the Appellants.