1990 (3) TMI 176 - AT - Central Excise

Summary

Issues:
- Interpretation of relevant notifications for exemption of excise duty on HDPE Jerrycans.
- Applicability of Notification No. 149/82 dated 22-4-1982 for duty exemption.
- Effect of Finance Bill 1982 on classification and duty liability of the goods.
- Justifiability of excise duty demanded for the interim period.
- Comparison of conflicting interpretations of lower authorities and appellants regarding duty exemption.

Analysis:
1. The case involved a dispute regarding the classification and duty liability of HDPE Jerrycans manufactured by the appellants. The goods were initially exempted under Notification No. 68/71 but fell under a different tariff item post an amendment by the Finance Bill 1982, subject to an 8% duty. However, Notification No. 149/82 dated 22-4-1982 provided an exemption for certain plastic articles, including the Jerrycans, under Tariff Item 15A(2).

2. The Assistant Collector of Central Excise confirmed demands for excise duty, rejecting the appellants' claim of exemption under Notification No. 149/82. The Collector of Central Excise (Appeals) upheld this decision, citing the effective date of the Finance Bill 1982 as the point when the goods became dutiable under the new tariff item.

3. The appellants argued that they were entitled to exemption under Notification No. 149/82 from 22-4-1982 onwards, as their products fell under Tariff Item 15A(2) until the passing of the Finance Act on 11-5-1982. They contended that duty exemption applied to clearances made during specific periods as per the notifications.

4. The Tribunal, after considering the submissions and relevant case law, found in favor of the appellants. It held that the lower authorities erred in rejecting the claim for exemption post 22-4-1982. The Tribunal emphasized that the effective date of the exemption notification determined the duty liability, not the passing of the Finance Act.

5. The Tribunal relied on precedents such as Wavin India Ltd. v. Collector of Central Excise, Nagpur and M/s. Peico Electronics & Electricals Ltd., which established that duty changes only took effect upon enactment, not immediately upon proposal. Therefore, the appellants were entitled to duty exemption from the date of Notification No. 149/82, i.e., 22-4-1982.

6. The Tribunal dismissed the relevance of a ruling cited by the Departmental Representative, emphasizing that the effective date of duty charging was crucial, not the date of manufacture. Consequently, the appeal was allowed in favor of the appellants, granting them consequential relief and the right to claim a refund for duty paid beyond 22-4-1982.