1996 (1) TMI 186 - AT - Central Excise

Summary

Issues:
1. Claim for refund of special excise duty paid in excess.
2. Interpretation of exemption Notifications 30/79 and 201/79.
3. Application of amendment in Section 4(4)(d)(ii) of the Central Excises & Salt Act, 1944.
4. Calculation of special excise duty after considering exemption Notifications.
5. Effect of Tribunal decisions and Delhi High Court judgment on the case.

Analysis:
The judgment by the Appellate Tribunal CEGAT, New Delhi involved a claim for a refund of special excise duty paid in excess by M/s. Godfrey Phillips (I) Limited. The company contended that the special excise duty should be calculated based on the basic excise duty after considering exemption Notifications 30/79 and 201/79. The Assistant Collector rejected the refund claim, stating that the special excise duty had been correctly levied, considering only the effect of Notification 30/79, not 201/79. This decision was upheld by the Collector of Central Excise (Appeals), leading to the present appeals.

During the hearing, the appellant referenced a Tribunal decision and a Delhi High Court judgment, emphasizing that special excise duty should be calculated after applying all exemption Notifications, including Notification 201/79. The Tribunal and High Court decisions highlighted that the exemption by set off should be given effect first, followed by the calculation of special excise duty.

The Tribunal analyzed the amendment in Section 4(4)(d)(ii) of the Central Excises & Salt Act, 1944, which specified the quantum of Central Excise duty to be determined after considering applicable exemption notifications. The Tribunal noted that the amendment did not apply to the past period under consideration, from June 1980 to February 1982, based on a previous Tribunal decision. The Explanation in 4(4)(d)(ii) clarified that certain exemption notifications related to duty paid on raw materials should be excluded only for that sub-clause's purpose, not for calculating special excise duty.

Ultimately, the Tribunal allowed the appeal, concluding that Notification 201/79 should be taken into account while determining the duty of excise on which special excise duty is calculated. The decision was based on the findings of previous Tribunal decisions and the Delhi High Court judgment, emphasizing the correct method of calculating special excise duty after considering all relevant exemption Notifications.