2001 (11) TMI 282 - AT - Central Excise

Summary

Issues:
Interpretation of provisions of Notification No. 283/82-C.E. regarding excise incentive credit for manufacturers of excisable goods. Calculation of base clearances for excise duty credit during the incentive period. Validity of duty payments made under protest for computing admissible credit during the incentive period.

Analysis:
1. The appeal concerns the interpretation of Notification No. 283/82-C.E. related to excise incentive credit for manufacturers of specific excisable goods. The dispute revolves around the calculation of base clearances for excise duty credit during the incentive period.

2. Notification No. 283/82-C.E. granted excise incentive credit to manufacturers of certain excisable goods. The respondent was engaged in manufacturing tyres and flaps, among other goods. The notification specified conditions for granting credit based on excess clearances during the incentive period compared to base clearances. The issue in this appeal is the computation of base clearances for tyres and flaps manufactured by the respondent.

3. The lower authorities had differing interpretations of the definition of "base clearance" under the Notification, leading to varied outcomes regarding the duty credit available to the respondent during the incentive period.

4. During the base period, the respondent's factory faced labor issues, resulting in suspension of operations and a subsequent lock-out. The Assistant Collector calculated the period of closure differently from the respondent's argument, leading to a dispute over the computation of base clearances and the eligibility for excise duty credit.

5. In the appeal, the Department contested the lower appellate authority's decision, seeking to restore the Assistant Collector's order. The Collector (Appeals) had determined a shorter period of closure for the factory, allowing the respondent's claim for excise duty credit based on the revised calculation of base clearances.

6. The Department argued that the period of closure during the base period was correctly determined by the Assistant Collector, emphasizing non-production of goods as the key factor in computing closure periods. Referring to the Finance Minister's speech, the Department asserted that the legislative intent favored considering production, not just clearance, of goods during the base period.

7. The Tribunal agreed with the Department's interpretation, relying on the Finance Minister's speech to understand the legislative intent behind the Notification. Production of specified goods during the base period was deemed crucial for computing closure periods, supporting the Assistant Collector's decision on base clearances.

8. Regarding duty payments made under protest after the incentive period, the Tribunal concurred with the Department that such payments could not be considered for computing excise duty credit during the incentive period, as they were not made within the specified periods.

9. Consequently, the Tribunal allowed the Department's appeal, setting aside the Collector (Appeals) order and upholding the Assistant Collector's decision on the computation of base clearances and excise duty credit eligibility during the incentive period.