1993 (4) TMI 178 - AT - Central Excise

Summary

Issues Involved:

1. Jurisdiction of the Bench to hear the appeal.
2. Eligibility for enhanced money credit under Notification No. 192/87.
3. Applicability of decisions on similar issues.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Bench to Hear the Appeal:

The primary issue is whether the appeal falls within the jurisdiction of the Regional Bench or the Special Bench. The appellant's counsel argued that no question of classification or valuation is involved, thus the appeal should be heard by the Regional Bench. Conversely, the Departmental Representative contended that the appeal involves a question of the rate of duty, necessitating it to be heard by the Special Bench.

The judgment references Section 351(2), which stipulates that appeals involving the determination of any question related to the rate of duty of excise or the value of goods for assessment purposes must be heard by a Special Bench. The majority decision in the case of Collector of Central Excise v. Kashmir Vanaspati (1987) held that appeals regarding exemption notifications fall within the jurisdiction of the Special Bench. However, the minority view argued that such appeals do not involve a question of the rate of duty for assessment purposes.

Ultimately, the judgment decided that the question of eligibility for the benefit of Notification No. 201/79 should be heard by a Special Bench, aligning with the majority view in the Kashmir Vanaspati case. However, the judgment also noted that the minority view, which focuses on the quantum of duty rather than the rate, represents the correct position. The matter was referred to the President of the Tribunal for constituting a Larger Bench to reconsider the jurisdiction issue.

2. Eligibility for Enhanced Money Credit under Notification No. 192/87:

The appellant, Tata Oil Mills Company Ltd., argued that they were entitled to enhanced money credit at the new rate of Rs. 640 per tonne for unutilized stock of Rice Bran Oil as of 1-3-1988, consistent with Notification No. 192/87. The lower authorities had disallowed the additional credit, holding that the rate of credit admissible would be the one prevailing on the date when the inputs were received.

The judgment examined the appellant's contention that the enhanced rate should apply when the balance quantity of inputs was utilized. However, it concluded that this plea was not acceptable, as the rate of money credit should be determined based on the date the inputs were received, not when they were utilized.

3. Applicability of Decisions on Similar Issues:

The judgment referenced several decisions on related issues where credit taken and utilized before the utilization of corresponding inputs could not be reversed by the department, even if subsequent notifications rescinded the credit or exempted the final products from duty. These cases include:

- Amrit Banaspati Co. Ltd. v. Union of India - 1990 (50) E.L.T. 69 (Punjab & Haryana)
- Dipak Vegetable Oil Industries Ltd. v. Union of India - 1991 (52) E.L.T. 222 (Guj.)
- Modern Mills Ltd. v. Union of India - 1991 (55) E.L.T. 148 (Kar.)
- Collector of Central Excise v. Wipro Information Technology - 1988 (33) E.L.T. 172 (Tribunal)
- Sarvottam Ispat (P) Ltd. v. Collector of Central Excise - 1989 (41) E.L.T. 181 (Tribunal)

The judgment concluded that subsequent developments, such as increased rates of money credit introduced by a notification after the receipt of goods, cannot be applied retroactively to the detriment of the manufacturer. The authorities' decision to disallow the enhanced credit was upheld, as the rate prevailing on the date of receipt of inputs was deemed applicable.

Final Order:

The judgment held that the question of eligibility for the benefit of Notification No. 201/79 falls within the jurisdiction of the Special Bench. The Registry was directed to fix a suitable date for hearing the appeal before the Special Bench. The matter was also referred to the President of the Tribunal for constituting a Larger Bench to reconsider the jurisdiction issue in matters relating to credit of duty.