1997 (2) TMI 112 - SC - Central Excise

Summary

Issues: Proper interpretation of Excise Notification No. 310/77-C.E., applicability of proviso to the notification, eligibility for relief under the notification, denial of relief on countervailing duty, interpretation of Rule 56A of Central Excise Rules.

In the judgment delivered by Suhas C. Sen, J., the Supreme Court of India addressed a dispute concerning the interpretation of Excise Notification No. 310/77-C.E., dated 1-1-1977, as amended on 4-2-1978. The appellant, a manufacturer of weigh-bridges, imported some parts and claimed entitlement to relief under the proviso to the notification. The Tribunal rejected this claim, stating that relief would only apply if the parts were produced in the factory where weigh-bridges were manufactured. The Court, however, held that the manufacturer is indeed entitled to the relief as the notification grants full exemption to parts of weigh-bridges regardless of where they are produced. The proviso merely outlines the procedure for availing relief if parts are produced elsewhere. The Court highlighted Rule 56A of the Central Excise Rules, which allows a manufacturer to receive material on which duty has been paid for manufacturing goods and receive credit for the duty paid.

The appellant was denied relief on countervailing duty as it was different from excise duty and not listed under Rule 56A. The Court deemed this denial erroneous, emphasizing that the notification provides relief for parts produced in the factory as well as elsewhere, with the procedure in Rule 56A to be followed for parts not produced in the factory. The appellant contended that it should pay countervailing duty on parts used in manufacturing weigh-bridges and should not be denied relief under the notification by following the procedure in Rule 56A. The Court agreed with the appellant's argument, overturning the Tribunal's decision and reinstating the Collector's order dated 19-10-1983.

In conclusion, the Supreme Court allowed the appeal, holding in favor of the appellant without imposing any costs. The judgment clarified the entitlement of manufacturers to relief under Excise Notification No. 310/77-C.E., emphasizing the applicability of the proviso, the interpretation of Rule 56A, and the incorrect denial of relief on countervailing duty.