1994 (12) TMI 217 - AT - Central Excise

Summary

Issues: Interpretation of Notification No. 175/86 for higher notional credit on special excise duty.

The judgment by the Appellate Tribunal CEGAT, CALCUTTA involved the interpretation of Notification No. 175/86 regarding the availment of higher notional credit on special excise duty. The case revolved around the Appellants, a manufacturer of railway carriage fan, who received goods for using as inputs in their final product. The Appellants believed they were entitled to higher notional credit on special excise duty under Rule 57B of the Central Excise Rules, 1944, based on their interpretation of the notification.

The jurisdictional Superintendent directed the Appellants to reverse the higher notional credit availed, leading to an appeal to the Collector (Appeals). The Collector's order did not favor the Appellants, prompting them to file the current appeal. The Appellants argued that an earlier Order-in-Appeal supported their claim, emphasizing that Notification No. 175/86 included special excise duty for modvat credit, thus entitling them to the higher notional credit.

The Revenue, represented by Shri S.N. Ghosh, contended that post-amendment to Notification 175/86 limited the higher notional credit to 5% of the duty, irrespective of it being basic or special excise duty. Referring to a Tribunal judgment in Eimco Elecon case, the Revenue argued that the notification only applied to basic excise duty as per Rule 8(1) of the Central Excise Rules, 1944, excluding special excise duty. The Revenue relied on the Sarada Service Corporation case to support their stance.

The Tribunal, after considering both parties' arguments, sided with the Revenue's interpretation. The Tribunal concurred with the view that Notification 175/86 did not extend to special excise duty, as it was issued under Rule 8(1) without invoking the Finance Act, 1988. Consequently, the Tribunal dismissed the appeal, finding no merit in the Appellants' contentions regarding the higher notional credit on special excise duty under the said notification.