1988 (2) TMI 266 - AT - Central Excise

Summary

Issues: Interpretation of "full price" in Rule 66 of Central Excise Rules, 1944 for missing/unaccounted excise stamps.

The judgment from the Appellate Tribunal CEGAT, Madras involves an appeal filed by the Collector of Central Excise against an order passed by the Collector of Central Excise (Appeals), Madras, regarding the payment of Central Excise duty on matches by purchasing excise stamps. The respondents, who manufacture matches, were issued a show cause notice for missing/unaccounted excise stamps. The Assistant Collector determined the duty rate applicable for missing stamps to be Rs. 7.20 per gross matches. However, the Collector (Appeals) allowed the appeal, stating that the "full price" to be paid for missing stamps is the price at which the stamps were purchased. The main issue is the interpretation of the term "full price" in Rule 66 of the Central Excise Rules.

The Departmental Representative argued that the respondents were paying duty under Notification No. 40/81, which provides for different rates based on the type of packaging. He contended that the reduced rate of Rs. 6.60 per gross matches should not apply for missing stamps, as it is only applicable to specific packaging conditions. Therefore, the duty rate of Rs. 7.20 per gross should be enforced. On the other hand, the respondents' counsel asserted that they should only pay the rate at which they purchased the stamps, i.e., Rs. 6.60, as per the Collector (Appeals) order. The dispute revolves around the correct interpretation of the term "full price" in Rule 66.

The Tribunal analyzed the Central Excise Rules and the Notification regarding duty rates for matches. It noted that manufacturers can obtain excise stamps in cash or on credit and that Rule 66 mandates payment of the "full price" for missing stamps. Considering the purpose of the rule and the potential misuse of lost stamps, the Tribunal concluded that the "full price" should be the effective rate applicable to the specific category of stamps. Therefore, the duty payable for missing stamps should align with the maximum duty payable for that category of stamps, which is Rs. 7.20 as per the Notification. The Tribunal emphasized the higher responsibility of manufacturers obtaining stamps on credit and upheld the Department's appeal, ruling in favor of enforcing the higher duty rate of Rs. 7.20 per gross matches for missing stamps.