1985 (7) TMI 351 - AT - Central Excise

Summary

Issues:
Interpretation of exemption notifications regarding central excise duty on tyres and lubes.

Analysis:
The judgment concerns the interpretation of three exemption notifications related to central excise duty on tyres and lubes. The dispute revolves around the order of applying these exemptions. The appellants argue that the exemption under notification No. 142/78-C.E. should be applied before the exemption under notification No. 178/77-C.E. The appellants present three key arguments. Firstly, they contend that the phrase "read with any relevant notification" in notification No. 142/78-C.E. only refers to notification No. 123/74-C.E. and not to notification No. 178/77-C.E. Secondly, they rely on an amendment to Section 4 by the Finance Act, 1982, to support their claim that the effective duty should be calculated first before applying the set-off notification. Lastly, they invoke the principle that in case of two possible interpretations, the one favorable to the assessee should be adopted. The Department's representative, on the other hand, emphasizes the wording of notification No. 142/78-C.E. and argues that the sequence of applying the exemptions is explicitly stated in the notification itself.

The tribunal carefully considers the arguments presented by both sides. It agrees with the lower authorities and dismisses the appellants' claims. The tribunal holds that notification No. 142/78-C.E. provides a clear method for calculating the duty reduction, and the percentages mentioned in the notification should be based on the net duty payable after considering all applicable exemptions. It rejects the appellants' argument that the phrase "any relevant notification" in the operative part of the notification refers only to specific notifications. The tribunal asserts that both notifications No. 123/74-C.E. and 178/77-C.E. are relevant and should be considered before calculating the duty reduction under notification No. 142/78-C.E. Additionally, the tribunal addresses the appellants' second argument regarding the amendment to Section 4 and clarifies that the scope of the Explanation in the section is limited to the calculation of duty deduction and not the method of calculating further duty reduction under the notification in question.

Ultimately, the tribunal finds no merit in the appeal and dismisses it. It concludes that the appellants' arguments are legally untenable, and therefore, they are not entitled to the benefit of those interpretations. The tribunal upholds the application of the exemption notifications as per the sequence laid down in notification No. 142/78-C.E. The judgment emphasizes adherence to the conditions and procedures specified in the relevant notifications for claiming duty reductions on tyres and lubes, excluding flaps, under the central excise tariff.