1983 (10) TMI 247 - AT - Central Excise

Summary

Issues:
Calculation of base clearance for multiple factories under Notification 198/76-C.E.

Analysis:
The appeal was filed against the Appellate Collector's decision regarding the base clearance calculation for four factories producing carbon dioxide. The Assistant Collector had fixed the base clearance for all four factories at 2,169,606,076 kg under Notification 198/76-C.E. The issue arose when the fourth factory, which started clearances after 1-4-1973, claimed concessional duty over a specific quantity. The Assistant Collector added the base clearances of all factories to determine a common base clearance for the manufacturer, leading to the appeal (Paragraph 2).

The main argument in the appeal was that the Assistant Collector changed the base period for the fourth factory, which started clearances after 1-4-1973, from 1973-1974, 1974-1975, 1975-1976 to only 1973-1974. The appellants contended that the base period should be as per the actual clearance periods of each factory. The Department argued that the base clearance must be calculated for one manufacturer, not individual factories, under Notification 198/76-C.E (Paragraph 4).

The Tribunal noted that the base clearance for the first three factories was determined under clause (c) of sub-paragraph 2(2), while the base clearance for the fourth factory was under clause (b), as it started clearances after 1-4-1973. The amendment by Notification 271/76-C.E. did not affect the base periods and clearances of the factories in question. The Tribunal emphasized that the notification's language indicated separate base clearances for different factories and did not require combining them for a common base clearance (Paragraph 5).

The Tribunal analyzed sub-paragraph (2) of paragraph 2 of Notification 198/76-C.E. and concluded that the determination of base clearance was factory-specific. The notification allowed for different base clearances for factories falling under different categories based on clearance periods. Combining base clearances of different factories would result in changing the base periods, which was not supported by the notification. Therefore, the Assistant Collector's decision to add base clearances was deemed incorrect, and the appeal was allowed (Paragraph 7).

In the final decision, the Tribunal ruled that the base clearance for the fourth factory should be determined separately from the other three factories. Any duties collected incorrectly based on the combined base clearance were to be refunded to the manufacturer. The judgment clarified the importance of adhering to the specific base clearance calculations outlined in the notification for individual factories (Paragraph 8).