1984 (7) TMI 365 - AT - Central Excise

Issues Involved:
1. Interpretation of Notification No. 14/78-C.E. and Notification No. 15/78-C.E.
2. Applicability of duty exemptions based on the rate of duty paid on kraft paper.
3. Validity of clarifications and trade notices issued by the government.
4. Estoppel against the government based on trade notices and clarifications.
5. Retrospective effect of amendments to notifications.

Issue-wise Detailed Analysis:

1. Interpretation of Notification No. 14/78-C.E. and Notification No. 15/78-C.E.:
The appellants manufacture corrugated boards and clear them on payment of nil duty by virtue of Notification No. 14/78-C.E., which amended Notification No. 46/71-C.E. The proviso in Notification No. 14/78-C.E. stated that corrugated boards produced from kraft paper or kraft liner that paid duty at 37.5% ad valorem would be exempted from excise duty. Notification No. 15/78-C.E. exempted kraft paper from duty in excess of 37.5% ad valorem. The appellants argued that the kraft paper used in their factory had paid duty at rates not exceeding 30% ad valorem, further reduced by other notifications, and thus should be deemed to have met the conditions of Notification No. 14/78-C.E.

2. Applicability of Duty Exemptions Based on the Rate of Duty Paid on Kraft Paper:
The appellants contended that the kraft paper used should be deemed to have borne duty at the enhanced rate laid down in Notification No. 15/78-C.E., making their corrugated board eligible for exemption under Notification No. 14/78-C.E. However, the tribunal found that the kraft paper had not paid the duty of 37.5%, a condition explicitly required by Notification No. 14/78-C.E. The tribunal emphasized that the duty paid on the raw material was less than 37.5%, and thus the exemption could not be granted.

3. Validity of Clarifications and Trade Notices Issued by the Government:
The appellants relied on government clarifications and trade notices, including one issued by the Nagpur Collectorate, which stated that existing stock of corrugated boards manufactured from kraft paper cleared at 30% duty would continue to be leviable to duty at 5% ad valorem. However, the tribunal noted that these clarifications did not promise total exemption under Notification No. 14/78-C.E. if the duty paid on the raw material was less than 37.5%. The tribunal found that the clarifications and notices were poorly drafted but did not support the appellants' claim for total exemption.

4. Estoppel Against the Government Based on Trade Notices and Clarifications:
The appellants cited several cases, including Union of India v. Anglo Afghan Agencies and M/s. Navgujarat Paper Industries v. Superintendent of Central Excise, arguing that the government and its officers are estopped from ignoring promises made in trade notices. However, the tribunal found no promise made by the government or its officers that supported the appellants' claim. The tribunal concluded that the cited cases did not aid the appellants because the trade notices and clarifications did not promise the exemption sought.

5. Retrospective Effect of Amendments to Notifications:
The appellants argued that an amendment on 26-8-1978, which substituted the words "on which appropriate duty, if any, has been paid" for "duty has been paid at the rate of 37.5% ad valorem" in Notification No. 14/78-C.E., indicated that the concession was intended from 24-1-1978. The tribunal rejected this argument, stating that no notification could have retrospective effect unless decreed by Parliament. The tribunal emphasized that the law must be taken as it is, and any defects in the notifications could not be remedied by the authorities executing them.

Conclusion:
The tribunal concluded that the appellants' claim for exemption under Notification No. 14/78-C.E. could not be granted because the kraft paper used had not paid the required duty of 37.5%. The tribunal rejected the appeal, emphasizing that the law must be applied as written, and clarifications or trade notices did not support the appellants' interpretation. The tribunal also rejected a similar appeal filed by another company against the same order of the Appellate Collector of Central Excise, Madras.

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