1991 (11) TMI 157 - AT - Central Excise

Summary

Issues:
- Whether the respondents could claim the benefit of set-off of duty on the use of duty paid material under Notification 178/77-C.E., dated 18-6-1977 as amended by Notification 295/77-C.E., dated 28-9-1977 by way of a claim for refund.

Analysis:
1. The respondents used filter rods, on which duty was paid, in manufacturing cigarettes between 1-6-1978 to 31-10-1979. They submitted four claims for a refund of duty paid on filter rods, citing set-off benefits under the mentioned notifications. The Assistant Collector rejected the claims, stating set-off could only be availed at clearance and payment of duty on excisable goods. The Collector (Appeals) allowed the appeals, noting no provision supported the Assistant Collector's view.

2. The Assistant Collector contended that the assessable value of cigarettes needed revision considering the set-off of duty paid on filter rods. However, the Collector (Appeals) referred to the Explanation to Section 4(4)(d)(ii) of the Central Excises and Salt Act, 1944, added by the Finance Act, 1982, stating the set-off would not impact the assessable value of cigarettes.

3. The Department's appeal argued that the respondents failed to establish unit-to-unit correlation between input and output at clearance, as required by the notification. Strict interpretation of exemption notifications was emphasized, and relaxation of conditions was deemed unwarranted.

4. The respondents submitted a Paper Book, including a letter certifying input details for each unit of cigarettes and appeal memorandums. During arguments, the Senior D.R. cited a Tribunal decision emphasizing the importance of furnishing input details for relief. In contrast, the respondents' counsel referred to another case where filing input-output ratio in advance was not mandated by the notifications.

5. After hearing arguments, the Tribunal observed that the respondents had provided the necessary statement to the Superintendent of Central Excise, satisfying the condition. The Tribunal agreed with the Collector (Appeals) that the benefit could be claimed through a refund if the notification conditions were met, not just at clearance. As the conditions were fulfilled, the Tribunal upheld the Collector (Appeals) decisions and dismissed all five appeals.