1998 (2) TMI 240 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 231/85 and subsequent amendment by Notification No. 42/89 regarding concessional rate of duty for Tyres, Tubes, and Flaps of motor vehicles. Applicability of the conditions of the notification, including the value of clearance. Relevance of Notification No. 48/89 for small scale industries. Prospective nature of Notification No. 42/89 and the retrospective application by the Collector (Appeals). Definition of "clearance" in Central Excise law and its implications on the calculation of aggregate value.

Analysis:
The appeal before the Appellate Tribunal concerned the Department challenging the order of the Collector of Central Excise (Appeals) related to the benefit claimed under Notification No. 231/85 for Tyres, Tubes, and Flaps. The Department contended that the respondents did not satisfy the conditions of the notification, especially regarding the value of clearance, and argued that the amendment by Notification No. 42/89 should only apply prospectively from its issuance date (1-3-1989). The Collector (Appeals) had granted the benefit of the amendment even for the period before 1-3-1989, which the Department opposed.

The Counsel for the respondents argued that even before the amendment, the benefit could be extended based on the exclusion of the value of exempted goods like cycle tyres and tubes. They also contended that Notification No. 48/89, applicable to small scale industries, was not relevant to the current case. The Tribunal noted that the language of the notification was crucial, with specific conditions needing fulfillment. The notification required consideration of all excisable goods, whether dutiable or exempted, for calculating the aggregate value, as it referred to other exemption notifications explicitly.

Regarding the prospective nature of Notification No. 42/89, the Tribunal upheld the Department's argument that the explanation added by the amendment was only applicable prospectively from 1-3-1989. Citing relevant case law, the Tribunal emphasized that the retrospective application by the Collector (Appeals) was incorrect. The Tribunal clarified the term "clearance" in Central Excise law, stating that it refers to the removal of goods from approved premises, irrespective of whether the goods were dutiable or exempted. The order of the Collector (Appeals) was set aside, and the appeal by the Department was accepted.