1998 (5) TMI 195 - AT - Central Excise

Summary

Issues Involved:
Interpretation of Condition No. (vi) of Notification 283/82-C.E., dated 27-11-1982 regarding the exclusion of raw materials from the calculation of clearances for production incentives.

Analysis:

Issue 1: Interpretation of Condition No. (vi) of Notification 283/82-C.E., dated 27-11-1982
The issue at hand revolves around the correct interpretation of Condition No. (vi) of Notification 283/82-C.E., dated 27-11-1982, concerning the exclusion of raw materials from the calculation of clearances for production incentives. The Tribunal examined the language of the condition, which states that the quantity of specified goods received in the factory for manufacturing the same goods should be deducted from clearances. The Tribunal emphasized that the term "specified goods" in the condition refers to final products listed in the notification, not raw materials. It was argued that excluding raw materials would defeat the purpose of the incentive scheme, leading to negative excess production and rendering the scheme futile. Therefore, the Tribunal rejected the Revenue's interpretation, as it would result in an absurd outcome contrary to the intention of the notification.

Issue 2: Referral to High Court for Question of Law
The Revenue contended that the Tribunal's interpretation of the notification raised a question of law that should be referred to the High Court. However, the respondent argued against referral, citing established legal principles. It was highlighted that not every question of law requires High Court referral, especially when the interpretation is clear from judicial precedents or the plain reading of the provisions. Additionally, it was noted that an interpretation leading to absurdity or anomaly should be avoided. The Tribunal agreed with the respondent, emphasizing that adopting the Revenue's interpretation would indeed lead to an absurd outcome, making it necessary to reject the referral application.

In conclusion, the Tribunal's judgment clarified the correct interpretation of Condition No. (vi) of Notification 283/82-C.E., dated 27-11-1982, emphasizing the exclusion of raw materials from the calculation of clearances for production incentives. The decision also highlighted the importance of avoiding interpretations that would defeat the purpose of statutory notifications or lead to unreasonable outcomes. The Tribunal rejected the Revenue's request for High Court referral, affirming its stance on the matter.