1989 (6) TMI 200 - AT - Central Excise

Summary

Issues: Interpretation of Notification No. 198/76 regarding exemption from duty calculation.

In this case, the Appellate Tribunal CEGAT, New Delhi dealt with a matter concerning the interpretation of Notification No. 198/76 and its application to the calculation of base clearances for excisable goods. The respondents, engaged in tractor manufacturing, had availed of an exemption from central excise duty under an order by the Central Board of Excise and Customs. However, a dispute arose when the Central Excise Department included the tractors cleared under this exemption in the calculation of base clearances for availing a 25% concession under Notification No. 198/76. The Assistant Collector's order differed from the Collector (Appeals) who held that the exemption order by the Board should not be considered for calculating base clearances. The Revenue appealed this decision.

The key contention revolved around the interpretation of the wording in Rule 8(1) and Rule 8(2) of the Central Excise Rules, specifically regarding the granting of exemption from "duty leviable" and "payment of duty" respectively. The Department argued that the wording difference implied that goods cleared under the Board's exemption order should be included in base clearances calculation, contrary to the respondents' position that there should be no distinction between exemptions granted under Rule 8(1) and Rule 8(2). Both parties emphasized strict interpretation of the Notification and relevant legal provisions.

Upon analysis, the Tribunal considered the language of Notification No. 198/76, which did not specify any distinction between exemptions under Rule 8(1) and Rule 8(2) of the Central Excise Rules. The Tribunal noted that the exemption order by the Board clearly exempted the goods from duty payment, and the Notification did not provide for excluding such goods from base clearances calculation. Therefore, the Tribunal upheld the Collector (Appeals)'s decision, stating that the Notification did not warrant differentiation based on the specific rule under which the exemption was granted. Consequently, the Tribunal dismissed the Revenue's appeal and affirmed the Collector (Appeals)'s order, finding no grounds for interference.

In conclusion, the Tribunal's judgment clarified the interpretation of Notification No. 198/76 concerning the calculation of base clearances for excisable goods and emphasized that the wording of the Notification did not support a distinction between exemptions granted under different rules of the Central Excise Rules. The decision underscored the importance of strict interpretation of legal provisions and upheld the Collector (Appeals)'s ruling in favor of the respondents.