1983 (2) TMI 281 - AT - Central Excise

Summary

Issues:
Calculation method for duty exemption under Notification No. 198/76-CE in relation to set off under Notification No. 21/77-CE.

Analysis:
1. The dispute revolved around whether the duty exemption or incentive under Notification No. 198/76-CE should be calculated before or after deducting the duty set off on the engine under Notification No. 21/77-CE. The appellants argued against the method followed by the Department, claiming discrimination between manufacturers using different procedures to avail of exemptions.

2. The Department emphasized the wording of Notification No. 198/76-CE, stating that the incentive should be calculated based on the effective duty payable under the relevant tariff item along with any exemption notification in force, such as Notification No. 21/77-CE. They argued that the two procedures, set off, and proforma credit, had distinct conditions and limitations, and manufacturers had the choice to select one. The Department contended that there was no discrimination within the same procedure, and the appellants could have opted for proforma credit if desired.

3. The Tribunal analyzed Notification No. 198/76-CE and concluded that the exemption granted required the incentive to be calculated based on the net effective duty actually payable on the scooters. Following the appellants' calculation method would necessitate omitting crucial language from the notification, which was unwarranted. The Tribunal agreed with the Department's calculation method and reasoning that there was no discrimination against the appellants compared to manufacturers following the same set off procedure.

4. Ultimately, the Tribunal rejected the appeal, affirming the Department's calculation approach and dismissing the appellants' claim of discrimination. The judgment clarified the correct method for calculating duty exemptions under Notification No. 198/76-CE in conjunction with set off provisions under Notification No. 21/77-CE, emphasizing compliance with the notifications' language and intent.