1989 (8) TMI 237 - AT - Central Excise

Summary

Issues involved: Interpretation of Notification No. 201/79 for duty exemption on inputs used in manufacturing masticated rubber and subsequent payment of duty on finished excisable goods.

In this case, the Appellate Tribunal CEGAT, New Delhi heard an appeal against the Order-in-Appeal No. 55/85(C) dated 7-5-1985 passed by the Collector of Central Excise (Appeals) Madras. The appellants were involved in the manufacture of Masticated Rubber using inputs that had duty liability under Item 68 of the Central Excise Tariff Schedule. The masticated rubber was exempted from duty during September 1982 to December 1982 under Notification No. 201/79, provided the prescribed procedure was followed. The appellants' claim for duty exemption and refund was initially rejected by lower authorities.

The main issue revolved around whether the duty paid on inputs used in manufacturing masticated rubber could be set off against the duty on the finished excisable goods produced from it. Referring to a previous decision in a similar case, the Tribunal held that the relief claimed would be available as long as the correlation between inputs and finished goods could be established. The Department was directed to calculate the relief on a pro rata basis after obtaining necessary information.

During the proceedings, the appellants cited the previous decision in their favor, while the Departmental Representative maintained the stance taken by lower authorities, albeit acknowledging the applicability of the previous decision to the current case. After considering both arguments, the Tribunal upheld the previous decision and remanded the matter to the Assistant Collector for calculating the relief due to the appellants as per the earlier Tribunal order.

Additionally, the appellants raised concerns about the validity of Notification No. 201/79 and the current procedures for availing relief towards duty payment on finished goods. While the Tribunal did not comment on this issue due to lack of information, it suggested that if current procedures did not allow for crediting the relief amount, the Department should make the payment in cash or by cheque to the appellants.