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TMI Blog1985 (5) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... t Collector of Central Excise by his order dated 3-1-1975 rejected the refund claim for Rs. 52,855.73 dated 24-7-1978 preferred by the appellants observing that he did not find any valid ground to entertain the appellants claim for refund of duty and it was accordingly rejected. The Collector of Central Excise (Appeals), Bombay by his order dated 29-7-1982, after referring to the appellants letter dated 18-4-1978 to the Assistant Collector of Central Excise and dated 24-7-1978 to the Collector of Central Excise, held that it cannot be stated that the appellants used the propylene in the manufacture of the specified goods so as to be eligible for the exemption contained in the Notification No. 276/67-CE. In the two letters (supra) the appellants had stated that they needed about 80 MT propylene to start up their plant on a very urgent basis. It appears that the appellants plant due to certain labour problems had not been working for a period of four months. Before coming to merits of the appeal it is necessary to briefly set out the facts involved for proper appreciation. The appellants by their letter April 18, 1978 (Annexure A) addressed to the Assistant Collector of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eject the claim as he found no valid ground to entertain the same. The appellants then filed as per their memo dated 22-4-1979 appeal to the Appellate Collector of Central Excise, Bombay. This led to Order-in-Appeal No. 1107/B-II-120/82, dated 29th July, 1982. 3. At the hearing of the appeal on 23-6-1986, Mrs. J.K. Chander, JDR representing the respondent raised what she called a preliminary objection on the ground that the appellants M/s. Union Carbide India Ltd. industrial users could not make this application for refund and this could be done only by the manufacturer of the product NOCIL. Arguments on this point were heard when Shri V. Lakshmi Kumaran, Advocate representing the appellants, inter alia, submitted that NOCIL had expressed their concurrence and had no objection in the appellants making this application for refund. The Bench felt that this document should be placed by the appellant on file and time was granted for the purpose. In obedience to this direction the appellants have placed on record a photostat copy of letter dated 3-7-1978 titled No Objection Certificate from NOCIL addressed to the Assistant Collector of Central Excise, Division W, Dadar. The letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (Tribunal). 6. Controverting Shri Sundar Rajan s submissions on this point Shri Lakshmikumaran, learned Advocate submitted that objection as to locus standi cannot be raised at the second appellate stage before the Tribunal. For this argument he relied on Order No. 1 Rule 13 C.P.C. He also relied on the following decisions : 1. Sri Ram Pasricha v. Jagannath Ors. AIR 1976 Supreme Court 2335. In this decision the Supreme Court held that plea as to non-joinder of parties should be taken at the earliest opportunity. 2. Lakhi Prasad Fogia v. Murlidhar Marwari Ors. AIR 1973 Patna 250. In this decision the Patna High Court regarding objection as to nonjoinder of parties held that objection not raised at the earliest opportunity before settlement of issues is deemingly waived. 3. Commissioner of Income-tax, Bombay City v. T.M. Bhumraddi Another (Bombay High Court). In this decision, the Bombay High Court on a Income-tax reference while holding that the Commissioner of Income-tax may no doubt support the decision of the Appellate Asstt. Commissioner on any ground other than the one on which the Appellate Asstt. Commissioner based his decision. But such a ground must a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision the Tribunal agreeing with the appellants counsel with reference to Notification No. 167/79 which prescribed following Chapter X Procedure held that condition which was impossible to comply with because of action of Revenue should be taken to have been dispensed with so long as there has been substantial compliance with the requirement of Chapter X Procedure. On facts the Tribunal also held that procedural compliance with the requirement of law where goods had to be properly accounted for a particular end-use has to be held to be directory in nature. On the facts and circumstances of the case the Tribunal found that non-compliance with Chapter X Procedure in entirety does not vitiate the appellants claim. With these findings refund was granted to the appellants in the case. 7. Shri Sundar Rajan, learned JDR controverting Shri Lakshmikumaran s arguments on merits submitted that the appellants held a L-6 Licence for obtaining Ethylene free of duty and not Propylene. According to him, Ethylene is raw material for end product and Propylene is not. He submitted that the notification prescribed following Chapter X Procedure. The Chapter does not contemplate refund. It envisage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustan Fertilizer Corporation Ltd. (supra), we observe that in para 24 the decision recognises exceptions to the general rule laid down in the decision in the following words : ...... There can be a situation where the duty liability is transferred to a person other than the manufacturer. In that case both the liability to pay extra duty and the right to receive refunds may be passed on. Thus, in the case of an assessee working under Chapter X procedure, Rule 196 provides for demand of duty from him on goods not duly accounted for. If any duty has been levied on an industrial consumer under this rule he would no doubt be entitled to claim refund thereof. The present case would appear to fall under the exceptions set out in the decision. In the instant case the Assistant Collector rejected the appellants application for obtaining Propylene free of duty, as would be shown later, on an erroneous understanding that starting up of the plant could not be used as input in the specified commodities. Subsequent decision of the Tribunal which has already been cited above would show that this view of the Assistant Collector was wrong. In this background if the appellants claim for refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would be that having regard to the buffer scheme the Steel Authority of India, real importers; would be entitled to exemption from payment of duty. The Court ordered refund to the appellant M/s. Steel Strips Ltd. 11. Keeping this decision of the Supreme Court in mind and considering the facts of the case cumulatively, in our view the appellants claim for refund cannot be thrown out on the ground that the appellant have no locus standi to make this claim for refund. We would therefore, answer the second point formulated above for determination in favour of the appellants and against the Revenue. 12. Taking up next the first point, whether Propylene obtained by the appellants from NOCIL for starting up operations of their plant would be eligible for exemption under Notification No. 276/67, it is necessary at this stage briefly to refer to the material portion of the notification. The notification is reproduced in the Statement of Facts, para 2 of the Memo of Appeal. Under the notification, Central Government in exercise of powers conferred by Rule 8(1) of the Central Excise Rules, 1944 exempts excisable goods falling under Item 6 to 11 A of the First Schedule to the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l runs would fulfil the requirement of exemption under the notification. It is not disputed that but for starting up operations of the plant for which Propylene was a must, the appellants could not have obtained the specified product chemicals. This apart, condition (c) reproduced above is also clear that exemption is available for use otherwise than as fuel. It is nobody s case that Propylene obtained by the appellants from NOCIL was for use as fuel. The Bench was told that this was for cooling up the plant before it commenced production. Taking the ratio of the Supreme Court decision and the Tribunal decision cited above there would appear no reason to deny to the appellants the benefit of exemption in respect of Propylene. Shri Sundar Rajan has also argued that under the scheme there is no Concept of refund to the industrial user. We have in a way dealt with this point dealing with the question of locus standi where we have said that in substance the present claim for refund must be held to have been made by the appellants for the manufacturer NOCIL. 15. Shri Sundar Rajan lastly submitted that exemption under the notification is available only when procedure set out in Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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