1986 (9) TMI 241 - AT - Central Excise

Summary

Issues:
Claim of rebate of excise duty under notification No. 108/78-C.E., rejection of claim by Appellate Collector, Central Government's notice under section 36(2) challenging Appellate Collector's decision, factory not in production in all preceding years, reliance on Bombay High Court decision, interpretation of notification terms, denial of benefit under notification No. 35/76, failure to raise grounds before Assistant Collector or Appellate Collector, lack of details in review show cause notices, setting aside of Appellate Collector's orders.

Analysis:
The judgment dealt with three appeals where the respondents had claimed a rebate of excise duty under notification No. 108/78-C.E. The Appellate Collector initially allowed the claims, but the Central Government issued a notice challenging this decision under section 36(2) of the Central Excises & Salt Act. The main contention was that the factory of the respondents had not been in production during all the preceding years as required by the notification. The Central Government argued that starting production after the expiry of one or more of the specified years made the respondents ineligible for the benefit of the notification.

During the proceedings, the respondents relied on a decision of the Bombay High Court regarding a similar notification. The High Court held that the advantage of the notification should not be denied based on the factory not being in existence during all preceding years if the other eligibility criteria were met. The Tribunal, following this precedent, concluded that the respondents could not be denied the benefit under the notification solely on the ground of the factory not being in existence in all preceding years.

Another issue raised by the Central Government was the applicability of notification No. 35/76 to the factory, which they argued could bar the respondents from availing benefits under notification No. 108/78. However, this ground was not raised before the Assistant Collector or the Appellate Collector and lacked details in the review show cause notices. The Tribunal held that without specific particulars and grounds raised earlier, this argument could not be accepted to set aside the Appellate Collector's orders.

In the final decision, the Tribunal found no valid grounds to set aside the Appellate Collector's orders in any of the three appeals. Therefore, the appeals were dismissed, and the review notices of the Government were discharged. The judgment emphasized the importance of meeting eligibility criteria under notifications and the necessity of raising all relevant grounds during the initial stages of the proceedings for proper consideration.