9911796707
TMI Blog1988 (1) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Cationic softener and Dispersol VLX are manufactured by the appellants at its factory; Appellant pays duty thereon. (ii) Dispersol 'A' is manufactured at the Appellant's factory but no duty is paid thereon as the appellant claims exemption under Serial No. 4 of the Notification 101/66. 2. Perminal KBI (wetting out agent) i) TRO 'B' ii) Calsolene Oil 'GS' i) TRO 'B' is manufactured by the Appellant at its factory but no duty is paid thereon as the appellant claims exemption thereon under Sr. No. 1 of Notification No. 101/66. ii) Calsolene is manufactured by the appellant at its factory. The appellant pays duty thereon. 3. Lissapol PS Cone (wetting out agent) i) Gilapol 'P' ii) TRO 'B' iii) Lissapol 'CW' i) Gilapol 'P' is manufactured by the appellant at its factory. The appellant pays duty thereon. ii) TRO 'B' and Lissapol 'CW' are manufactured at its factory but no duty is paid thereon as the appellant claims exemption under Sr. No. 1 of Notification 101/66 4. Lubrol 'VA' (Emulsifier) i) Lissapol 'NW ii) Dispersol 'A' i) Lissapol 'NX' is manufactured by the appellant at its factory. The appellant pays duty thereon. ii) Dispersol 'A' is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If in respect of surface active agents used in the manufacture of such emulsifiers, wetting out agents, softeners and other like preparations the appropriate amount of duty of excise or the additional duty under Section 2A of the Indian Tariff Act, 1934 (32 of 1934), has already been paid or where such surface-active agents are purchased from the open market on or after the 20th day of January, 1968. 2. This notification shall, in relation to sulphonated caster oil, commonly known as Turkey red oil (specified as serial No.l in the Table above) be deemed to have taken effect from the 1st day of March, 1966. 3. Para 2 added Notification No. l72/66-C.E. shall be deemed always to have been added. (Notification No. 101/66-C.E. dated 17-6-1966 as amended by Notifications No. 137/66-C.E. dated 10-9-66; No. 172/66-C.E. dated 5-11-1966 No. 4/68-C.E. dated 20-1-1968 and No. 182/75-C.E. dated 30-8-1975). The appellants had been manufacturing these goods in their factory for a number of years and the manufacture of these different products for the first time took place at different points of time and they had been filing their classification lists from time to time furnishing the date reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessments were provisional is contrary to the facts in as much as the provisional duty procedure set out in Rule 9(2) had not been followed and unless this was done, the assessment could not considered provisional. He stated that the Assistant Collector's findings holding the assessment as provisional were also in violation of the principle of natural justice as the appellants had not been asked to explain their position in regard to the provisional nature of the assessments as held by the lower authority. He pleaded that the classification lists were approved by the Assistant Collector subject to the outcome of the test. He pleaded that if, at all, the approval of the classification lists could be considered as provisional it is only for the purpose of the test for classification of goods under T.I. 15AA and it could not be considered as provisional for all purposes. He stated as early as on 17.6.71, final approval had been granted to three out of the five products now under issue and drew our attention to the classification lists filed by him in the paper book at page 23. He stated that when one of the items before us 'Lubrol 'VA' for the first time manufactured by them, they had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed to have discharged the appropriate duty for the purpose of the notification. 4. The learned J.D.R. for the Department, Smt. Chander, drew our attention to some of the classification lists where she pointed out that these lists had been approved provisionally except one which had been approved finally. She pointed out that the endorsement on the price list dated 1.12.79 was subject to the eligibility of the notification. She pleaded that the appellants themselves in their letter dated 5.3.1981 stated that "should however it is decided at a later date that the products attract Central Excise duty we shall pay the same with retrospective effect". She pleaded that this undertaking by the appellants was a blanket undertaking not with reference to the approval granted subject to the testing of the goods alone. She pleaded, no doubt, the lower authority in the show cause notice issued, has invoked Rule 11A but the invoking of a wrong rule by itself does not vitiate the demand as the said demand was due in view of the fact that the classification lists had been approved provisionally and the appellants themselves had acceded to pay the duty in case the benefit of the notification wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keeping the assessment open. Here, we find, that the approval of the classification lists by the authorities were indicated as provisional for one reason or the other but no sense or urgency has been shown by the concerned officer to give a finality to the assessment by proving the classification lists finally lifting the burden of the endorsements made on the classification lists. If some test was required to be done it should have been carried out expeditiously or if the eligibility to the notification was under consideration the necessary orders should have been issued after giving the appellants opportunity in the matter. What, in fact, happened was that the appellants were allowed to make clearances year after year and the RT 12 returns were also accepted from month to month without taking the desired action. Suddenly the authorities woke up and issued show cause notices on the ground that benefit of notification was not available. In fact it was only a few classification lists where the provisional approval was for consideration of the benefit of the notification. We find there is a lot of force in the appellants plea that at least where the assessments had been approved subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et. In respect of some of the ingredients as mentioned by the appellants they had paid duty under 15AA while in respect of the others no duty has been paid as these had been cleared by them at nil duty in terms of Notification No. 101/66. So far as the ingredients on which the duty was paid by the appellants are concerned there is no point of dispute. However, point made by Revenue is that inasmuch as some of the inputs falling under 15AA had been cleared at nil rate of duty it could not be said that appropriate duty had been paid in respect of these and since payment of appropriate rate of duty on the inputs falling under 15AA is a condition precedent for availing the benefit of Notification 101/66, this benefit in respect of the said goods covered by Serial No. of the notification is not available. The appellants, however, have pleaded that even though the goods had been cleared at nil rate of duty, these should be considered as goods on which appropriate duty had been paid. In short, what Revenue is pleading is that there should be some payment towards duty in respect of the inputs utilised in terms of Notification 101/66 for the manufacture of the said goods. 8. We observe tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26 of the aforesaid Schedule, which have been cleared from the factory, prior to the 18th day of June, 1977, on payment of duty at the appropriate rate, the duty specified in the corresponding entries in column (3) of the Table shall be reduced by two hundred rupees per metric tonne : Provided further that where the products mentioned in the Table, other than bars and rods, falling under sub-item (ia) of item No. 26-AA referred to in serial No. 3 of the Table, are made from semifinished steel on which duty at the appropriate rate has already been paid, or from steel ingots falling under item No. 26 of the aforesaid Schedule which are cleared from the factory on or after the 18th day of June, 1977 on payment of duty, the duty specified in the corresponding entries in column (3) of the Table shall be reduced by three hundred and thirty rupees per metric tonne : Provided also that where the duty paid on steel ingots or semi-finished steel, as the case may be, used in the manufacture of any quantity of the products mentioned in the Table is in excess of duty leviable on such products, the amount eligible for adjustment towards the exemption shall be restricted to the amount of duty l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat they put to the words used in the notification dated 1-3-1973, namely, on which the appropriate duty of excise leviable .... has already been paid." The Hon'ble Court after examining various issues took note of judgment in the case of N.B. Sanjana v. The Elphinstone Spinning & Weaving Mills Company Ltd. [1978 E.L.T. (3 399) = A.I.R. 1971 S.C. 2039, E.C.R. C 368 SJ] and observed as under : "In yet another case the very words with which we are concerned fell for interpretation before Supreme Court in the case of N.B. Sanjana. Recovery of duties or charges short-levied, or erroneously refunded - When duties or charges have been short-levied, through inadvertance, error, collusion or mis-construction on the part of an officer, or through misstatement as to the quantity, description of value of such goods on the part of the owner, or when any such duty or charge, after having been levied has been owing to any such cause, erroneously refunded, the person chargeable with the duty or charge, so short-levied, or to whom such refund has been erroneously made, shall pay the deficiency or pay the amount paid to him in excess, as the case may be on written demand by the proper officer bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the wording used in the notification before us are similar to the wording of Notification No. 66/73 in the case before the Hon'ble High Court. Ingots were exempt from the payment of duty if these were manufactured out of fresh unused steel melting scraps on which appropriate rate of duty of excise had been paid. In the case before them, the fresh unused melting scrap was also exempt from the duty. The Hon'ble Court has held that the use of scrap cleared at nil rate of duty did not dis-entitle the ingots to the benefit of Notification 66/73 and have held, as mentioned above, appropriate payment of duty should be taken to mean duty that ought to have been paid or contracted to have been paid. Since such duty in terms of exemption notification is nil these goods cleared without payment of any duty therefore can be taken to be duty paid goods. In that view of the matter, therefore the appellants are entitled to the benefit of notification under serial No. 4 of the Notification 101/66. We, therefore, following the ratio of the judgment of Hon'ble High Court of Patna as above, allow the appeal and set aside the order of the lower authority. In view of what we have held above, we d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
