1987 (10) TMI 163 - AT - Central Excise

Summary

Issues:
Dispute over exemption of excise duty on miniature tyres distributed as free gifts by appellants. Interpretation of Central Board of Excise and Customs order. Classification of miniature tyres under Central Excise Tariff Schedule. Scope of exemption under Rule 8(2) of Central Excise Rules. Request for withdrawal of appeal. Power of Central Board to grant permanent exemption.

Detailed Analysis:

1. The dispute revolves around miniature tyres manufactured and distributed as free gifts by the appellants. The Central Board of Excise and Customs exempted these tyres from excise duty under Rule 8(2) of the Central Excise Rules. However, the Assistant Collector classified the tyres under a different item of the Central Excise Tariff Schedule, leading to a rejection of the appellants' claim for exemption and refund of duty.

2. The appellants challenged the Assistant Collector's decision before the Appellate Collector of Central Excise, who upheld the orders. The present proceedings before the Appellate Tribunal CEGAT, New Delhi, involve a review of these decisions.

3. The appellants argued that the exemption from duty should apply to the miniature tyres regardless of their classification under the Central Excise Tariff Schedule, citing a previous decision by the Tribunal. The issue of whether the Board could grant a permanent exemption under Rule 8(2) was also raised during the proceedings.

4. The Tribunal deliberated on the nature of the Board's powers under Rule 8(2), emphasizing that such exemptions are specific to each case and not of a permanent nature. The Tribunal noted that the Board's order dated 27.10.1964 could not be operative in 1979-1980, the period in question, and that the goods fell under a different item of the CET.

5. The Tribunal ultimately held that the Board's order did not apply to the subject goods during the material period, upholding the impugned orders and dismissing the appeal. The request for withdrawal of the appeal was declined by the majority of the Bench, citing previous decisions and concerns about the appellants' motives.

6. The separate judgments by different members of the Tribunal highlighted varying perspectives on the withdrawal of the appeal, the interpretation of the Board's order, and the limitations of Rule 8 of the Central Excise Rules. Despite differing opinions on withdrawal, the Tribunal collectively upheld the dismissal of the appeal.

7. The judgment emphasizes the restricted nature of exemptions under Rule 8(2) and the importance of proper classification under the Central Excise Tariff Schedule. The decision serves as a precedent regarding the Board's powers and the eligibility for duty exemptions in similar cases.