1987 (1) TMI 110 - AT - Central Excise

Summary

Issues: Eligibility for benefit under notification No. 201/79-C.E., jurisdiction of Special Bench vs. Regional Bench.

Analysis:
1. Jurisdiction Issue: The case involved a dispute regarding the eligibility of the respondents for benefits under notification No. 201/79-C.E. The question arose whether the appeals should be heard by a Special Bench or a Regional Bench. The President directed a five-member Bench to determine the jurisdiction as a preliminary issue. Both parties initially agreed that the appeals fall within the jurisdiction of a Special Bench. However, the Bench considered the provisions of Section 35D(2) of the Central Excises and Salt Act, which mandates that appeals related to the determination of questions regarding the rate of duty of excise shall be heard by a Special Bench. The parties argued that the process of assessment for determining entitlement to benefit under the exemption notification is part of the assessment process related to the rate of duty. The Bench analyzed the nature of the dispute and concluded that the appeals fell within the jurisdiction of a Regional Bench, as they did not directly relate to the rate of duty of excise.

2. Rule 8 of Central Excise Rules: The Bench also considered the provisions of Rule 8 of the Central Excise Rules, under which the exemption notification was issued. The notification allowed manufacturers to deduct duty paid on inputs from the duty payable on final manufactured goods. The Bench examined whether this deduction process involved a question related to the rate of duty of excise for assessment purposes. It was determined that the dispute over the entitlement of benefit under the notification did not involve a direct determination of the rate of duty of excise.

3. Interpretation of Statutory Provisions: A separate judgment by another group of judges analyzed the meaning of the expression "having relation to the rate of duty of excise" in Section 35D(2) of the Act. They referred to legal interpretations to argue that even indirect significance to the rate of duty on finished goods would bring the matter within the jurisdiction of a Special Bench. However, the majority opinion held that the appeals should be heard by a Special Bench based on this interpretation.

4. Final Decision: The majority of the Bench determined that the question of eligibility for the benefit under the notification fell within the jurisdiction of a Special Bench. Consequently, the case was to be heard by the Special Bench, and a suitable date for the appeal hearing was to be fixed by the Registry.

This detailed analysis of the judgment highlights the key legal arguments, statutory provisions, and the ultimate decision regarding the jurisdictional issue in the case.