1986 (12) TMI 169 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 161/66-C.E. and Notification No. 117/66-C.E.
Applicability of duty calculation on goods supplied at tender rates to Government Department.
Availability of benefits under separate exemption notifications.
Validity of demand for differential duty by the Range Superintendent.
Confirmation of duty liability by lower authorities.

Analysis:
The case involved two appeals by a company against an order passed by the Collector of Central Excise (Appeals) regarding differential duty payment. The company had cleared products at maximum retail price but supplied them at tender rates to the Government Department, resulting in a show cause notice for the differential duty amount. The company argued that they were entitled to avail of the exemption under Notification No. 161/66-C.E. and that the contract price was always lower than the M.R.P. They contended that the two notifications, 161/66-C.E. and 117/66-C.E., were independent and not contradictory.

The learned Assistant Collector confirmed the demand for differential duty, observing that the duty should be levied on the contract price minus the actual duty payable. The Collector of Central Excise (Appeals) upheld the findings but modified the order regarding duty calculation. The company then appealed to the Tribunal, represented by Shri D.B. Engineer, who argued that the company was entitled to benefits under both notifications separately.

Shri Engineer referenced a Tribunal judgment stating that separate exemptions should be available unless there is a specific provision to the contrary. He also cited a Supreme Court judgment emphasizing the clear meaning of exemption terms in a taxing statute. The company had opted for the benefit of Notification No. 161/66-C.E. and had chosen a 25% discount on the retail price specified in the price list.

The respondent, represented by Shri A.K. Rajhans, relied on the wording of Notification No. 161/66-C.E. and the 2nd proviso, urging for the dismissal of the appeal. After hearing both sides, the Tribunal found that the company should not be denied the benefit of the subsequent notification, No. 161/66-C.E., as there was no proviso subjecting it to the earlier notification. Citing the Supreme Court judgment, the Tribunal allowed both appeals, setting aside the lower authorities' orders and directing the Revenue Authorities to give consequential effect to the decision.