1984 (5) TMI 239 - AT - Central Excise

Summary

Issues Involved:
1. Inclusion of exempted goods in the computation of aggregate value under Notification No. 71/78.
2. Retrospective applicability of Explanation (4) in Notification No. 141/79.
3. Allegation of willful mis-statement or suppression of facts by the Appellant.
4. Entitlement to the benefit of Rule 56A for proforma credit.

Detailed Analysis:

1. Inclusion of Exempted Goods in Aggregate Value Computation:
Notification No. 71/78-C.E., dated 1-3-1978, exempted specific "excisable goods" up to an aggregate value of Rs. 5 lakhs from the whole of the duty of excise, provided the aggregate value of "specified goods" cleared during the preceding financial year did not exceed Rs. 13.75 lakhs for 1978-79 and Rs. 15 lakhs for subsequent years. The goods specified included "Synthetic Organic Dyestuffs" under Item 14D. The Appellant contended that goods exempted under other notifications should be excluded from this computation. However, the Tribunal concluded that for Synthetic Organic Dyestuffs, the aggregate value must include all such dyestuffs, regardless of any separate exemption, as no exclusion was provided for Item 14D in Notification No. 71/78. Therefore, the value of Rapidogens, although exempted, should have been included in the aggregate value computation.

2. Retrospective Applicability of Explanation (4) in Notification No. 141/79:
Explanation IV in Notification No. 141/79, dated 30-3-1979, extended the benefit of excluding goods exempted under other notifications in computing the aggregate value. The Appellant argued for its retrospective application, claiming it was clarificatory. The Tribunal held that the amending notification was prospective, effective from 1-4-1979, and could not be applied retrospectively. The Tribunal emphasized that amendments to taxing statutes are not retrospective unless explicitly stated, and this amendment reflected a change in policy rather than a clarification.

3. Allegation of Willful Mis-statement or Suppression of Facts:
The notice to show cause alleged that the Appellant filed a wrong declaration by not including the value of Rapidogens in the statement for availing exemption under Notification No. 71/78. The Tribunal noted that mis-statement or suppression of facts, even without intent to evade duty, attracts the larger limitation period of five years under Section 11A of the Act. The Appellant's failure to include Rapidogens' value constituted a mis-statement, regardless of the information being available to the Department through other means. Consequently, the demand was not barred by limitation.

4. Entitlement to the Benefit of Rule 56A for Proforma Credit:
The Appellant had been availing proforma credit under Rule 56A before Notification No. 71/78. The Tribunal directed the lower authorities to compute the leviable duty after granting the benefit of proforma credit under Rule 56A, if otherwise eligible. The Tribunal rejected the notion that the benefit of proforma credit was hypothetical and emphasized its duty to extend this benefit in the computation of duty.

Separate Judgment by H.R. Syiem, Member (T):
Member Syiem concurred with the main judgment but elaborated that the Appellant's suppression of facts was dishonest, as the exemption claim should have included all productions and clearances, including Rapidogens. He emphasized that the claimant must present complete facts to qualify for exemption, and the authorities' knowledge of Rapidogens' manufacture did not mitigate the Appellant's duty to disclose. He also agreed that the larger limitation period was applicable due to the suppression.

Conclusion:
The Tribunal rejected the appeal, holding that the Appellant's failure to include Rapidogens in the aggregate value computation under Notification No. 71/78 was a mis-statement. The retrospective application of Explanation IV in Notification No. 141/79 was denied. The demand was not barred by limitation, and the benefit of proforma credit under Rule 56A was to be granted in the computation of duty.