1986 (11) TMI 237 - AT - Central Excise

Summary

Issues Involved:

1. Entitlement to exemption under Notification No. 71/78.
2. Claims for refund of duty paid.
3. Applicability of Notification No. 101/71.
4. Interpretation of legislation by reference versus legislation by incorporation.
5. Equity considerations in fiscal statutes.

Detailed Analysis:

1. Entitlement to Exemption under Notification No. 71/78:

The core issue in Appeal No. 1250/82-B1 is whether the appellants were entitled to exemption under Notification No. 71/78 dated 1-3-78. The appellants, manufacturers of motor vehicle parts (pistons), claimed this exemption which was subject to conditions specified in the notification. The relevant condition in para 2 of Notification No. 71/78 stated: "Nothing contained in this notification shall, in so far as goods of the description specified against serial number 41 of the said Table, apply to manufacturers of such goods who avail of the exemption under the notification of the Government of India in the Ministry of Finance (Department of Revenue and insurance) No. 101/71-Central Excises, dated the 29th May, 1971, or under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 153/71-Central Excises, dated the 26th July, 1971."

The Assistant Collector and the Collector of Central Excise (Appeals), Bombay, rejected the appellants' claim for exemption and refund, leading to the present appeals.

2. Claims for Refund of Duty Paid:

The appellants sought refunds based on their claim for exemption. Since the primary appeal on exemption (Appeal No. 1250/82-B1) was pivotal, the success or failure of the refund claims in the other two appeals depended on the outcome of the main appeal.

3. Applicability of Notification No. 101/71:

The appellants argued that they did not avail themselves of the exemption under Notification No. 101/71, as it was the manufacturers of motor vehicle parts who assumed liability for duty by following the Chapter X procedure. They contended that the exemption should apply only to those manufacturers who used the pistons as original equipment parts.

The Tribunal found that the basic duty liability was on the appellants as manufacturers, and they were relieved of this liability through Notification No. 101/71. The conditional nature of the exemption and the shifting of liability to the buyer did not alter the fact that the appellants had availed themselves of the notification.

4. Interpretation of Legislation by Reference versus Legislation by Incorporation:

The appellants argued that Notification No. 71/78 referred to Notification No. 101/71 in its original form, not as amended. The Tribunal rejected this argument, noting that at the time Notification No. 71/78 was issued, Notification No. 101/71 had already been amended. The Tribunal emphasized that references to another instrument should be understood in the context of its current form unless explicitly stated otherwise.

The Tribunal cited the Gauhati High Court's judgment in Sankar Tea Co. Ltd. v. Collector of Central Excise, Shillong, which held that references to statutory instruments should be understood in the sense they bore at the time of issuance unless changed or superseded.

5. Equity Considerations in Fiscal Statutes:

The appellants claimed that applying Notification No. 101/71 to them would result in unfair discrimination compared to other manufacturers. The Tribunal dismissed this argument, stating that equity considerations do not influence the interpretation of fiscal statutes. The Tribunal noted that the appellants' commercial decisions determined their eligibility for exemptions, and they could not avoid the consequences on grounds of equity.

Conclusion:

The Tribunal upheld the decisions of the lower authorities, finding that the appellants had availed themselves of Notification No. 101/71 and were therefore not entitled to the exemption under Notification No. 71/78. Consequently, all three appeals were rejected.