1991 (1) TMI 309 - AT - Central Excise

Summary

Issues:
1. Interpretation of notification regarding excise duty on Paracetamol.
2. Applicability of Modvat Scheme and eligibility for relief.
3. Consideration of additional ground for Modvat relief.
4. Authority to determine eligibility and quantum of relief.

Analysis:

Issue 1: Interpretation of notification regarding excise duty on Paracetamol
The appellant, engaged in the manufacture of Paracetamol, contested a short-levy of duty imposed by the Additional Collector of Central Excise. The dispute revolved around the effective date for the duty liability on Paracetamol at 5% ad valorem, following its removal from the First Schedule to the Drugs (Prices Control) Order. The appellant argued that duty liability should commence from the date the Gazette notification was made available to the public, relying on legal precedents. Consequently, the Tribunal ruled in favor of the appellant for the period from 25-1-1989 to 20-3-1989, setting aside the demand for the earlier period.

Issue 2: Applicability of Modvat Scheme and eligibility for relief
The appellant sought the benefit of the Modvat Scheme for duty paid on inputs used in manufacturing Paracetamol. The appellant contended that the delay in granting a license and issuing a show cause notice prevented them from claiming Modvat relief for the relevant period. Citing legal precedents, the appellant argued that reopening the assessment under Section 11A of the Act allowed for the assertion of Modvat relief claims. The Revenue objected, stating the appellant did not raise the Modvat claim earlier. The Tribunal held that the appellant could present its Modvat claim, directing the Additional Collector to assess the eligibility and quantum of relief.

Issue 3: Consideration of additional ground for Modvat relief
The appellant raised concerns regarding whether the Modvat relief claim constituted an additional ground. Legal references were made to support the appellant's right to raise new grounds before the Tribunal, even if not previously raised before departmental authorities. The Tribunal agreed with the appellant, emphasizing that the right to relief is not limited to issues raised earlier, allowing the consideration of additional grounds for relief, including Modvat claims.

Issue 4: Authority to determine eligibility and quantum of relief
The Tribunal clarified that the appellant's entitlement to duty relief, as per statutory notifications or rules, should not be denied solely based on the lack of earlier claims. The matter was remanded to the Additional Collector for the determination of eligibility and quantum of relief. The Tribunal highlighted that if the claim is substantiated, it should not be rejected due to its absence during initial adjudication proceedings, emphasizing the principle that additional grounds can be raised before the Tribunal for potential relief.

In conclusion, the Tribunal ruled in favor of the appellant regarding the duty liability period for Paracetamol and directed a reassessment of the Modvat relief claim, underscoring the importance of considering additional grounds for relief and the authority to determine eligibility and quantum of relief.