1987 (2) TMI 214 - AT - Central Excise

Summary

Issues:
Whether Central Excise duty was payable on Sodium Meta Silicate manufactured from duty-paid Sodium Silicate.

Analysis:
The case revolved around the question of whether Central Excise duty was leviable on Sodium Meta Silicate manufactured by the respondents from duty-paid Sodium Silicate. The Assistant Collector of Central Excise initially held that duty was payable on Sodium Meta Silicate as any variety of Sodium Silicate had to pay duty at the appropriate rate at the time of clearance. The demand for duty for specific periods was confirmed. However, the Collector of Central Excise (Appeals) set aside the Assistant Collector's order, citing Trade Notice No. 200/75, which stated that conversion of one form of Sodium Silicate into another would not amount to manufacture and that no duty was payable on Sodium Meta Silicate if the Sodium Silicate used for its manufacture was duty paid.

The appellant argued that duty was payable at the time of clearance, relying on a previous decision of the Tribunal in a similar case. On the other hand, the respondent contended that no duty was payable at the time of clearance as per Trade Notice No. 200/75 and that both Sodium Silicate and Sodium Meta Silicate fell under the same Tariff Item. The Tribunal considered these arguments and emphasized that a Trade Notice does not have statutory force to override a statutory provision. It pointed out the relevant Central Excise Rules, which mandate payment of duty when goods are about to be removed from the factory.

In light of the legal principles and precedents, the Tribunal concluded that Central Excise duty was indeed payable on Sodium Meta Silicate removed from the factory after conversion from Sodium Silicate. However, the respondents were entitled to the benefit of a concessional rate of duty under a specific notification if applicable. Since there was no allegation of fraud or suppression of facts, the demand for duty was restricted to a specific period prior to the issuance of demand notices. Consequently, the impugned order was set aside, the appeal filed by the Revenue was allowed, and the original order passed by the Assistant Collector of Central Excise was restored, with the demand for duty limited to a specific timeframe.

This comprehensive analysis of the judgment highlights the legal intricacies involved in determining the applicability of Central Excise duty on the manufacturing process of Sodium Meta Silicate from duty-paid Sodium Silicate, emphasizing statutory provisions, precedents, and the significance of Trade Notices in such matters.