1980 (8) TMI 199 - HC - Central Excise

Issues Involved:
1. Eligibility for concessional rate of excise duty.
2. Interpretation of the term "manufacturer" under Notification No. 47/1972.
3. Validity of the order dated 10-11-1972 by the Superintendent of Central Excise.
4. Entitlement to refund of Rs. 3,19,338.93.

Detailed Analysis:

1. Eligibility for Concessional Rate of Excise Duty:
The petitioners, M/s. Madras Rubber Factory Limited, claimed a concessional rate of 40% ad valorem for excise duty under Notification No. 47/1972, dated 17-3-1972, for their new industrial undertaking in Goa. They argued that the total value of tyres cleared by their Madras factory should not be aggregated with the new Goa factory for determining eligibility for the concessional rate. The notification specified that the concessional rate applies if the total value of tyres cleared in the preceding financial year did not exceed Rs. 4 crores.

2. Interpretation of the Term "Manufacturer" under Notification No. 47/1972:
The core issue was the interpretation of the term "manufacturer" in the notification. The petitioners contended that the term should be construed to mean separate entities for their Madras and Goa factories, each operating under distinct licenses. They argued that each factory should be treated as a separate manufacturer for the purpose of the notification, citing Rule 174 of the Central Excise Rules, which mandates separate licenses for different manufacturing premises.

3. Validity of the Order Dated 10-11-1972 by the Superintendent of Central Excise:
The Superintendent of Central Excise had passed an order on 10-11-1972, stating that the rate of duty is 50% ad valorem on all clearances, as the manufacturer at Madras and Goa is the same. The petitioners challenged this order, asserting that it was arbitrary and contrary to law. They argued that they had obtained separate licenses for their Madras and Goa factories, and therefore, they should be considered different manufacturers.

4. Entitlement to Refund of Rs. 3,19,338.93:
The petitioners also sought a refund of Rs. 3,19,338.93, which they claimed through applications dated 30-4-1973 and 17-3-1973. The refund was sought on the basis that they were entitled to the concessional rate of duty, which had been wrongly denied by the Superintendent of Central Excise.

Judgment Analysis:

Eligibility for Concessional Rate of Excise Duty:
The court held that the exemption contemplated in the notification is in respect of tyres for motor vehicles cleared by the manufacturer. The term "manufacturer" was interpreted to mean the single entity owning multiple factories. The court observed that the exemption does not refer to any licensed premises where tyres are manufactured but to the manufacturer as a whole. Therefore, the total value of tyres cleared by both the Madras and Goa factories should be aggregated to determine eligibility for the concessional rate.

Interpretation of the Term "Manufacturer":
The court rejected the petitioners' argument that separate licenses for different premises imply separate manufacturers. The court emphasized that the exemption is granted to the manufacturer, considering that a single manufacturer may own multiple factories. The requirement for separate licenses under Rule 174 does not alter the interpretation of "manufacturer" for the purpose of the exemption notification.

Validity of the Order Dated 10-11-1972:
The court upheld the order dated 10-11-1972 by the Superintendent of Central Excise, finding no error in the interpretation that the manufacturer at Madras and Goa is the same. The court concluded that the petitioners' contention that they should be considered different manufacturers was not supported by the law.

Entitlement to Refund:
Given the court's interpretation of the term "manufacturer" and the aggregation of clearances from both factories, the petitioners were not entitled to the concessional rate of duty. Consequently, their claim for a refund of Rs. 3,19,338.93 was also dismissed.

Conclusion:
The court dismissed the writ petition, holding that the petitioners were not entitled to any of the reliefs sought. The interpretation put forth by the Revenue on the notification was deemed correct, and the petitioners were ordered to bear the costs as admissible.

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