1994 (9) TMI 162 - AT - Central Excise

Issues Involved:
1. Eligibility for a refund claim under Notification No. 178/77 and 295/77.
2. Compliance with the conditions stipulated in the notifications.
3. Jurisdiction of the Larger Bench to hear and decide the appeal.
4. Interpretation of conflicting judgments regarding procedural compliance for set-off claims.

Issue-Wise Detailed Analysis:

1. Eligibility for a Refund Claim under Notification No. 178/77 and 295/77:
The respondents filed a refund claim for Rs. 1,30,902.43 on account of Central Excise duty paid on Sodium Sulphate used in the manufacture of Glass sheets. The Assistant Collector rejected the claim, citing non-compliance with the condition of furnishing a statement showing the quantity of inputs used in the manufacture of every unit of Sheet glass. The lower Appellate Authority allowed the appeal, stating that the substance of the notification was satisfied as the inputs had paid duty and were utilized in the manufacture of excisable goods. The Collector (Appeals) held that the claim was not time-barred and directed the refund subject to verification.

2. Compliance with the Conditions Stipulated in the Notifications:
The respondents argued that they had complied with the notification requirements by submitting various documents and letters detailing the usage of Sodium Sulphate in the manufacture of glass sheets. The Tribunal examined the relevant correspondence and found that the respondents had indeed fulfilled the condition of furnishing the statement of quantity of inputs used. The Board's Circular No. 18/77-CX.6 supported this view, stating that the determination of duty paid on inputs should be based on the quantity used in the manufacture of the finished product.

3. Jurisdiction of the Larger Bench to Hear and Decide the Appeal:
A preliminary objection was raised by the respondents' counsel, arguing that the Larger Bench had no jurisdiction to hear and decide the appeal itself, as it was constituted only to determine whether a Larger Bench should resolve the conflict of judgments. The Tribunal overruled this objection, stating that the Larger Bench was empowered to hear the appeal to avoid a judicial stalemate and needless repetition of the exercise of reference to a Larger Bench.

4. Interpretation of Conflicting Judgments Regarding Procedural Compliance for Set-Off Claims:
The Tribunal reviewed conflicting judgments on the issue. In Andhra Pradesh Lightings Ltd. v. Collector of Central Excise, it was held that furnishing the statement was a vital condition for relief under the exemption notification. Conversely, in Grindwell Norton Ltd. v. Collector of Central Excise, it was held that non-furnishing of the input/output statement due to practical difficulties could not deny the benefit if other substantive conditions were met. The Tribunal noted that in none of the decisions was the condition of submitting the statement of input/output ratio dispensed with. However, it concluded that the respondents had satisfied the condition prescribed in the notifications and were entitled to the benefit of set-off.

Conclusion:
The Tribunal held that the respondents were entitled to the benefit of set-off under Notifications No. 178/77 and 295/77. The impugned order was upheld, and the appeal of the Revenue was dismissed. The cross-objection abated.

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