1994 (7) TMI 144 - AT - Central Excise

Summary

Issues Involved:
1. Interpretation of Notification No. 83/83, specifically the meaning of "clearances for home consumption."
2. Eligibility for exemption under Notification Nos. 80/80 and 83/83.
3. Whether clearances under bond should be included in the aggregate value of clearances for exemption purposes.

Issue 1: Interpretation of Notification No. 83/83
The main question was the interpretation of Notification No. 83/83, particularly the meaning of "clearances for home consumption." The appellant argued that goods cleared under bond should not be considered as goods cleared for home consumption. Rule 96D was cited, which distinguishes between clearances under bond and clearances for home consumption. The Tribunal found that both Customs and Central Excise laws distinguish between clearances for home consumption (on payment of duty) and clearances under bond (without payment of duty). The Tribunal concluded that the words "cleared for home consumption" in Notification No. 83/83 should be viewed in this context.

Issue 2: Eligibility for Exemption under Notification Nos. 80/80 and 83/83
The appellant claimed the benefit of exemption under Notification Nos. 80/80 and 83/83, excluding the value of clearances of fabrics returned under bond. The Assistant Collector and Collector (Appeals) denied this benefit, holding that clearances under Rule 96D should be included in the aggregate value of clearances. The Tribunal found merit in the appellant's argument that clearances under bond should not be included in the aggregate value for exemption purposes.

Issue 3: Inclusion of Clearances under Bond in Aggregate Value
The Tribunal noted that clearances under bond are not for home consumption but are mere transfers for specified purposes without payment of duty. The Tribunal emphasized that clearance for home consumption implies removal of goods for marketing or consumption, whereas clearance under bond implies transfer without payment of duty. The Tribunal concluded that the words "for home consumption" in Notifications 80/80 and 83/83 do not include clearances under bond.

Separate Judgment by Member (J)
Member (J) disagreed with the Vice President, holding that clearances under bond should be included in the aggregate value of clearances for exemption purposes. He cited the case of Ujagar Prints and argued that the process undertaken by the appellants amounted to manufacture, and thus, the value of clearances should be included.

Final Order
In view of the majority opinion, the appeal was accepted, and the Tribunal ruled in favor of the appellant, holding that clearances under bond should not be included in the aggregate value of clearances for the purpose of exemption under Notification Nos. 80/80 and 83/83.