2010 (9) TMI 525 - AT - Central Excise

Exemption - In the process of manufacture of Flexible Poliyurethane Foam , generated waste and scrap in respect of which the appellants claimed the benefit available under Notification No. 54/88-C.E., dt. 1-3-1988 as amended by Notification No. 30/90-C.E., dt. 20-3-1990 for the month of March, 1990. - Held that - The Notification No. 37/89 clearly required consideration of 10% of the total production during the immediate preceding month, whereas the Notification No. 30/90 clearly required consideration of 10% of the total production in the preceding year - So, it is difficult to accept the contention of the appellants that for the purpose of ascertaining the rate of duty for the month of March, 1990 the consideration of the period to the extent of first 19 days to be considered separately and for the later 12 days to be considered separately - Neither the earlier notification nor the amended notification gives any indication for adopting such a procedure. This aspect has not been considered by any of the authorities below - However, it is a pure question of law which can be decided on the basis of undisputed facts on record - Not necessary to interfere in the impugned order on the said ground as find the ground to be totally devoid of substance and can be decided by the Tribunal itself on the basis of undisputed facts on record. - Decided against the assessee.

Issues: Challenge to order rejecting refund claim application based on Notification No. 54/88 and Notification No. 30/90 regarding waste and scrap of Flexible Polyurethane Foam.

Detailed Analysis:

1. The appellants contested the order passed by the Commissioner (Appeals) rejecting their refund application, which was initially dismissed by the Assistant Commissioner. The refund claim was based on the Tribunal's order allowing benefits under Notification No. 54/88-C.E. for waste and scrap generated during the manufacture of Flexible Polyurethane Foam.

2. The appellants, as manufacturers of Flexible Polyurethane Foam, sought to claim benefits under Notification No. 54/88-C.E. for waste and scrap generated during the manufacturing process. The Adjudicating Authority initially denied the claim, leading to an appeal before the Tribunal, which ruled in favor of the appellants. Subsequently, the appellants filed a refund claim for the excess amount paid in duty for the month of March 1990, which was rejected by the lower authorities.

3. Notification No. 54/88, along with Notification No. 37/89, permitted the clearance of waste, paring, and scrap of Flexible Polyurethane Foam on payment of 40% ad valorem duty, subject to certain conditions regarding the quantity of clearances in relation to total production. The appellants argued that the authorities failed to consider the specific quantities cleared before and after the amendment brought by Notification No. 30/90, leading to an incorrect assessment of their liability.

4. The amendment introduced by Notification No. 30/90 changed the calculation method for total production from a monthly basis to an annual basis. The appellants contended that the limit of 10% of total production should be based on the annual production of the previous year starting from the date of the new notification, rather than considering only the monthly production up to the date of the amendment.

5. The Tribunal analyzed the provisions of both notifications and concluded that the appellants' argument for bifurcating the production period into two parts, one month, and the remaining days of the month after the amendment, was not supported by the language or intent of the notifications. The Tribunal found the appellants' contention to be without merit and upheld the decision to dismiss the appeal.

6. The Tribunal emphasized that the issue raised was a pure question of law, which could be resolved based on undisputed facts on record. Therefore, the Tribunal found no grounds for interference in the impugned order and dismissed the appeal, stating that the argument presented by the appellants would essentially require rewriting the notification, which was not permissible.

In conclusion, the Tribunal upheld the decision to reject the refund claim application based on the interpretation of Notification No. 54/88 and Notification No. 30/90 regarding the clearance of waste and scrap of Flexible Polyurethane Foam, finding the appellants' argument regarding the calculation of total production limits to be unsubstantiated.

← Previous Next →