1988 (2) TMI 248 - AT - Central Excise

Summary

Issues:
1. Eligibility for exemption under Notification No. 89/79.
2. Set off of duty paid on inputs used in the manufacture of solvent cement.
3. Capital investment on plant and machinery for eligibility under Notification No. 89/79.
4. Valuation of solvent cement for clearance under Notification No. 89/79.
5. Availment of Notification 201/79 as an alternative plea.

Eligibility for exemption under Notification No. 89/79:
The appellant company contended that they were not liable to pay excise duty on solvent cement cleared free of cost as per Notification No. 120/75. They also argued their eligibility under Notification No. 89/79 based on the value of clearances and capital investment in plant and machinery. The Assistant Collector confirmed the duty demands, stating that capital investment should consider the entire industrial unit, not just the section for exempted goods. The Collector (Appeals) upheld the decision, emphasizing the burden of proof on the appellant to establish eligibility for exemption.

Set off of duty paid on inputs:
The appellant company's plea for set off of duty paid on inputs used in manufacturing solvent cement was rejected by the original authority due to non-compliance with declaration requirements. The Collector (Appeals) affirmed this decision, highlighting the absence of a specific request for relaxation of declaration provisions.

Capital investment on plant and machinery:
The issue of capital investment on plant and machinery was crucial for determining eligibility under Notification No. 89/79. The appellant cited judgments supporting their interpretation, while the SDR relied on contrary judgments. The Tribunal agreed with the appellant's argument that capital investment should include common plant and machinery used for exempted goods, directing the Assistant Collector to reevaluate eligibility based on this consideration.

Valuation of solvent cement:
The appellant contested the valuation of solvent cement at Rs. 50/- per Kg, proposing Rs. 32/- per Kg based on DGS&D rates for damaged supplies. The Tribunal found the appellant's valuation reasonable, emphasizing the distinction between supplies to DGS&D and other buyers.

Availment of Notification 201/79:
The appellant's alternative plea under Notification 201/79 was considered contingent on the eligibility under Notification 89/79. The Tribunal directed the adjudicating authority to reassess both notifications, condoning procedural formalities for Notification 201/79 due to prior clarifications by the Superintendent.

In conclusion, the appeal was disposed of with directions to reevaluate the appellant's eligibility for exemptions, reconsider valuation based on DGS&D rates, and review the alternative plea under Notification 201/79.