1996 (10) TMI 233 - AT - Central Excise

Summary

Issues:
- Interpretation of Notification No. 178/85-C.E. dated 1-8-1985
- Exclusion of clearances under Notification No. 46/81 for computing value under Notification No. 178/85
- Applicability of Notification No. 77/85 as an alternative benefit

Interpretation of Notification No. 178/85-C.E. dated 1-8-1985:
The case involved a dispute regarding the applicability of Notification No. 178/85-C.E. dated 1-8-1985. The appellants, manufacturers of plasticisers, sought the benefit of total exemption under this notification for first clearances of goods not exceeding Rs. 20 lakhs cleared for home consumption after 1-8-1985. However, the authorities denied the benefit as the appellants had already cleared goods exceeding Rs. 20 lakhs before the specified date. The Tribunal held that the appellants were not entitled to the benefit of this notification for clearances made between 1-8-1985 to 31-12-1985 but could avail the alternative benefit under Notification No. 77/85.

Exclusion of clearances under Notification No. 46/81 for computing value under Notification No. 178/85:
The appellants argued that the value of goods cleared under Notification No. 46/81 should be excluded when calculating clearances under Notification No. 178/85. However, the Tribunal disagreed, stating that Notification No. 178/85 applied only to Tariff Item 68 goods cleared for home consumption after 1st April in any financial year. The Tribunal emphasized that there was no provision in Notification No. 178/85 for excluding clearances under any other notification. Despite this, the appellants were deemed eligible for the alternative benefit under Notification No. 77/85.

Applicability of Notification No. 77/85 as an alternative benefit:
The Tribunal analyzed the provisions of Notification No. 77/85, which exempted Tariff Item 68 goods cleared for home consumption up to Rs. 20 lakhs from excise duty. Notably, Explanation II of this notification specified that clearances exempted by any other notification based on value or quantity in a financial year should not be considered. Since Notification No. 46/81 did not affect the duty exemption based on clearances in a financial year, the Tribunal concluded that the appellants were entitled to the benefit of Notification No. 77/85 for the relevant period. Citing a previous case precedent, the Tribunal ruled in favor of the appellants, setting aside the duty demand and allowing the appeal with appropriate relief as per the law.