1990 (7) TMI 206 - AT - Central Excise

Summary

Issues Involved:
The issues involved in the judgment are the interpretation of central excise Notification No. 103/61, the impact of amendments to Rule 56A of the Central Excise Rules, 1944, and the denial of refund of countervailing duty by the Department based on rescinded notifications.

Interpretation of Central Excise Notification No. 103/61:
The applicants, engaged in manufacturing synthetic organic dyestuffs, were denied the benefit of Notification No. 103/61 due to amendments in Rule 56A, which restricted credit of countervailing duty on certain materials. The Tribunal held that the exemption under Notification No. 103/61 was independent and not subject to specific exclusions related to countervailing duty paid on certain goods. The Tribunal allowed the appeal, emphasizing that the procedural provisions of Rule 56A could not reduce the extent of exemption under the notification unless specifically provided for.

Denial of Refund Based on Rescinded Notifications:
After the Tribunal's order in favor of the applicants, the Department denied the refund of countervailing duty, citing rescinded notifications and procedural provisions of Rule 56A. The Tribunal criticized the Department's actions, noting that the Department had not appealed the Tribunal's decision or sought clarification, and attempted to nullify the order through re-adjudication. The Tribunal clarified that the prohibition in Rule 56A did not apply to the relief due as per its order, directing the refund to be paid to the applicants within two months.

Precedents and Legal Interpretation:
The Tribunal highlighted the difference between notifications issued under Rule 8(1) and Rule 56A, emphasizing that Rule 56A allows for set-off of duty paid on inputs against duty payable on finished goods, without exempting goods from duty. Precedents were cited where relief was granted despite changes in notifications, emphasizing that procedural requirements should not negate the effect of the original notification. The Tribunal clarified that the relief due to the applicants should be paid as per its order, and a copy of the order was to be communicated to the Central Board of Excise and Customs.