1997 (9) TMI 238 - AT - Central Excise

Summary

Issues:
- Interpretation of Notification 95/83 for duty set off on electric stampings and motors.
- Claiming benefit of duty set off on inputs for electric fans.
- Denial of benefit due to non-payment of duty on electric motors.
- Applicability of Rule 56(A) for provisional credit.
- Refusal of cash refund under Rule 56(A)2(c).
- Consideration of Ministry's instructions for payment of duty on electric motors.

Analysis:
1. The appeal involved the interpretation of Notification 95/83 regarding duty set off on electric stampings and motors used in the manufacturing process. The appellants argued that the notification allowed set off duty on inputs for electric fans, including stampings and motors. They cited relevant cases to support their claim, emphasizing that even if electric motors were exempted for captive consumption, proforma credit should not be denied.

2. The Departmental Representative (DR) contended that while credit could be allowed under normal Rule 56(A) procedure, the case at hand involved set off proceedings. The Collector's rejection of the claim was supported, highlighting that the relevant provisions of Rule 56(A) required applying for provisional credit or refund under specific circumstances, which were not followed by the appellants.

3. Upon hearing both sides, the Tribunal analyzed the notification and the nature of the products involved. It was noted that while the appellants did not pay duty on electric motors, they had the option to pay duty based on instructions from the Central Board of Excise and Customs (C.B.E.C.). The Collector's rejection solely on the grounds of non-payment of duty on inputs was deemed insufficient, especially considering the possibility of cash refund in special circumstances as established in previous judgments.

4. The Tribunal emphasized that the Collector did not address the appellants' offer to pay duty on electric motors, as per the Ministry's instructions, which indicated that such an offer could be accepted. Citing relevant case law, including a Supreme Court judgment, the Tribunal concluded that the Collector's order lacked reasoning and needed further examination. Consequently, the impugned order was set aside, and the matter was remanded for reevaluation by the Assistant Collector, allowing the appellants to present additional evidence to support their case.

5. In summary, the Tribunal's decision focused on the proper interpretation of the notification, the availability of cash refund in specific circumstances, and the need for a thorough examination of all aspects, including the appellants' offer to pay duty on electric motors. The case was remanded for further consideration, ensuring fairness and adherence to legal procedures.