1983 (8) TMI 274 - AT - Central Excise

Issues Involved
1. Applicability of two exemption notifications under Rule 8(1) of the Central Excise Rules to the same commodity.
2. Eligibility for exemption under Notification No. 97/70.
3. Impact of Notification No. 14/76 on existing exemptions.
4. Interpretation of the proviso to Notification No. 14/76.
5. Legal standing of the appellants' claim for a refund.

Detailed Analysis

1. Applicability of Two Exemption Notifications
The primary issue in this case is the combined effect of two exemption notifications, Notification No. 97/70 and Notification No. 14/76, under Rule 8(1) of the Central Excise Rules, on the same commodity, metal containers. The appellants, a small unit manufacturing metal containers, were initially availing the exemption under Notification No. 97/70, which provided an exemption on the first clearance of metal containers up to the value of Rs. 1 lakh in a financial year.

2. Eligibility for Exemption under Notification No. 97/70
The appellants argued that they continued to be eligible for the exemption under Notification No. 97/70, despite the introduction of the Simplified Procedure under Notification No. 14/76. They cleared their goods on payment of duty at 15% ad valorem and subsequently claimed a refund of Rs. 15,000, arguing that the duty had been wrongly collected. The Assistant Collector and the Appellate Collector rejected the refund claim, asserting that the appellants were ineligible for any other exemption under Notification No. 14/76.

3. Impact of Notification No. 14/76 on Existing Exemptions
Notification No. 14/76 introduced a Simplified Procedure for small units with a production not exceeding Rs. 5 lakhs in a financial year. It included a proviso stating that no other exemption under Rule 8(1) would apply to goods covered by this procedure. The appellants did not opt for the Simplified Procedure and were required to pay duty under Chapter V, the Physical Control Procedure. The Department argued that the second proviso to Notification No. 14/76 nullified the exemption under Notification No. 97/70 for the appellants.

4. Interpretation of the Proviso to Notification No. 14/76
The appellants contended that the proviso to Notification No. 14/76 did not specifically amend or rescind Notification No. 97/70, and thus, they should still be eligible for the exemption. However, it was determined that the proviso had a general application, making all exemptions under Rule 8(1) inapplicable to goods on which duty was payable under either the Simplified Procedure or the Physical Control Procedure.

5. Legal Standing of the Appellants' Claim for a Refund
The Tribunal concluded that the appellants were rightfully denied the benefit of Notification No. 97/70 by the lower authorities. The combined effect of the two notifications was that the benefit of Notification No. 97/70 was not available to manufacturers like the appellants, who did not opt for the Simplified Procedure and were paying duty under Chapter V. Therefore, the appeal was rejected, and the appellants were not entitled to the claimed refund.

Conclusion
The Tribunal held that the appellants were required to pay duty under Chapter V and were not eligible for the exemption under Notification No. 97/70 due to the proviso in Notification No. 14/76. The appeal was rejected, affirming the decisions of the lower authorities.

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