1995 (11) TMI 226 - AT - Central Excise

Yarn purchased by Registered Cooperative Societies - Condition of Notifications 47/90-C.E., dated 20-3-1990

Summary

Issues: Interpretation of conditions in Notifications No. 47/90 and No. 53/91-C.E.

In the judgment delivered by the Appellate Tribunal CEGAT, CALCUTTA, the main issue revolved around the interpretation of conditions laid down in Notifications No. 47/90 and No. 53/91-C.E. The first condition required goods to be supplied to registered cooperative societies for the development of the handloom sector, while the second condition stipulated that payment for the goods should be made by customers against cheques drawn on their bank accounts.

Analysis:

The Appellate Tribunal considered the arguments presented by both sides. The appellant's representative pointed out that despite requesting information from the Assistant Collector of Central Excise and Customs, it had not been received. However, the Tribunal noted that the statement of facts in the appeal memorandum filed by the appellant Collector provided sufficient information. The statement revealed that customers purchased bank drafts against cheques drawn on their own bank accounts when paying for goods supplied by the respondents.

The respondent's advocate argued that the Department's own appeal indicated that the second condition of the Notifications had been met since customers paid for goods from their bank accounts. Additionally, it was contended that the first condition regarding supplying goods to registered cooperative societies had also been fulfilled. The advocate emphasized that the second condition was directory and not mandatory, and even if not fully met, the respondents should still benefit from the Notifications.

In response, the appellant's representative asserted that both conditions in the Notifications had to be fulfilled for the benefits to apply, rejecting the distinction between mandatory and directory conditions.

After careful consideration, the Tribunal found that the second condition had been substantially fulfilled. It was observed that customers, who were registered cooperative societies, paid for goods by purchasing bank drafts against cheques drawn on their bank accounts. This fulfillment of both conditions led the Tribunal to rule in favor of the respondents, stating that the benefit of the Notifications could not be denied to them. Consequently, the appeal filed by the Revenue was dismissed.

In conclusion, the judgment clarified the interpretation of the conditions in the Notifications, emphasizing that substantial compliance with the requirements sufficed for the benefit to be granted.