1991 (1) TMI 164 - AT - Central Excise

Summary

Issues Involved:

1. Jurisdiction to decide the levy of cess on jute manufacturers for goods removed for export under B-1 Bond.
2. Applicability of Rules 3 and 4 of the Jute Manufactures Cess Rules, 1984.
3. Leviability of cess on jute manufactures exported under Bond.
4. Interpretation of Rule 13 of the Central Excise Rules, 1944, in relation to the Jute Manufactures Cess Act, 1983.
5. Jurisdiction of Regional Bench vs. Special Bench in matters involving cess and rate of duty.

Detailed Analysis:

1. Jurisdiction to decide the levy of cess on jute manufacturers for goods removed for export under B-1 Bond:

The President of CEGAT constituted a larger bench of five members to settle the jurisdictional question between the Special Bench and Regional Benches concerning the levy of cess on jute manufacturers for goods removed for export under B-1 Bond as per Rules 12 and 13 of the Central Excise Rules, 1944, and Rules 3 and 4 of the Jute Manufactures Cess Rules, 1984. The East Regional Bench, Calcutta, opined that such matters fall within the jurisdiction of Regional Benches.

2. Applicability of Rules 3 and 4 of the Jute Manufactures Cess Rules, 1984:

The appellants argued that Rules 3 and 4 of the Jute Manufactures Cess Rules, 1984, effective from 15-09-1984, cannot travel beyond the Act. Rule 3 mandates cess on finished jute manufactures removed for sale or export, while Rule 4 provides for refunds on exported jute manufactures. Prior to 15-09-1984, only the Central Excise Rules, 1944, applied.

3. Leviability of cess on jute manufactures exported under Bond:

The primary issue was whether cess was payable on jute manufactures exported under Bond under Rule 13 of the Central Excise Rules, 1944. The appellants contended that since Rule 13 allows for export without payment of Central Excise duty, cess, being another duty of excise, is not leviable. They argued that Rule 4, denying refunds, has no significance when no duty is payable on export under Bond.

4. Interpretation of Rule 13 of the Central Excise Rules, 1944, in relation to the Jute Manufactures Cess Act, 1983:

The appellants emphasized that Rule 13 of the Central Excise Rules, 1944, should not be interfered with by Rule 3 of the Jute Manufactures Cess Rules, 1984. They argued for a harmonious construction, suggesting that cess is payable only when exports are made on payment of cess and not under Bond.

5. Jurisdiction of Regional Bench vs. Special Bench in matters involving cess and rate of duty:

The Revenue argued that cess on jute goods, being a kind of excise duty, relates to the rate of duty and thus falls within the Special Bench's jurisdiction. The Tribunal examined various precedents and concluded that matters involving interpretation of notifications for levy of duty or cess on goods exported under Bond fall within the Special Bench's jurisdiction. The Tribunal also noted that the first proviso to Section 35B of the Central Excises and Salt Act, 1944, excludes the Tribunal's jurisdiction in appeals relating to rebate of excise duty on exported goods, which should be presented to the Government of India under Section 35EE.

Conclusion:

The Tribunal concluded that Appeals No. 15/87 and 16/87-ERB, involving the interpretation of notifications under Rules 12 and 13 of the Central Excise Rules, 1944, do not fall within the Tribunal's jurisdiction and should be presented to the proper authority. Appeals No. 69/87-ERB and 77/84-ERB, involving captive consumption and refund claims, should be heard by the Special Bench. The Tribunal's decision was supported by precedents and legal interpretations, affirming the jurisdictional boundaries and procedural requirements.