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TMI Blog1992 (4) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... A show cause notice dated 30-8-1986 was served on them on the ground that Section 2 of Central Duties of Excise (Retrospective Exemption) Act, 1986 covers such notification issued on or after 3-3-1986 but before 8-8-1986 for maintaining the effective rates of duties of excise at the level pertaining prior to 28th day of February 1986/lst March 1986 and not under notification providing set of under Notification No. 225/86-C.E., dated 3-4-1986 and therefore, they were required to show cause as to why their claim should not be rejected. They had filed a very detailed reply inter alia contending that their claim is available under the referred two notifications and that the notifications were covered by the Central Duties of Excise (Retrospective Exemption) Act. They had contended that prior to coming into force of Central Excise Tariff Act, they were entitled to duty relief under Notification No. 201/79-C.E. It was their submission that these notifications seeking to restore the same benefit should take effect not from the date of issue of such notification but from 1-3-1986 and in this context, they had referred to the language of the Central Duties of Excise (Retrospective Exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected for the reasons stated by me above." 5. The appellants have challenged these findings. We have heard Sh. V. Sridharan, learned advocate for the appellants and Shri K.K. Bhatia, learned Jt. CDR for the respondents. Shri Sridharan contended that the issue is no longer res-integra and that it has been fully decided in appellants favour on the point on which the Collector has decided in the following cases - Pure Drinks (New Delhi) Ltd. v. Collector of Central Excise, New Delhi - Order No. 276/90-C dated 21-3-1990 Collector of Central Excise, Patna v. M/s. Jamshedpur Beverages - Order No. E/250/90-D dated 20th April 1990 Collector of Central Excise, Chandigarh v. M/s. Jammu Bottling Co. Pvt. Ltd. - (Order No. 183/89-D dated 26-6-1989) M/s. Sahney Paris Rhone Ltd., Hyderabad Collector of Central Excise, Hyderabad - Order No. 106/89-B dated 4-8-1989 Shri Sridharan submitted that there was one ruling rendered by South Regional Bench in the case of Sundaram Clayton Ltd. Order No. 261/89 dated 29-5-1989 which has taken a contrary decision but in that ruling, the Notifications were Nos. 118/75 and 217/86 and that they are not pan materia to the present notifications. He contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of this ratio, the ruling rendered by the SRB in the case of Sundaram Clayton is not binding on this Bench. 7. We have carefully considered the submissions made by both the sides and perused the various rulings relied by both the sides. The appellants have contended that the excise duty on paper and paper board is levied and collected as per provisions of Section (3) of the Act. Prior to 28-2-1986, the rates of excise duty payable on paper and paper board were set forth in the First Schedule of the Act. The Tariff Act was restructured on the basis of Harmonised System of classification and a new Tariff Act was passed in 1985. In order to simplify the Excise duty and to overcome the fault of multiple taxation, the Scheme of Modvat was introduced in the Union Budget for 1986-87 w.e.f. 1-3-1986. However, the Modvat Scheme was not applicable to the paper industry. It appears that the Finance Minister while delivering the Budget speech, had stated that the introduction of Modvat Scheme will result in considerable reduction in the cost of final product and therefore, to retain the collection of Excise duties at the earlier levels, the rate of duties on the final product have been su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notification had been enforced from 1-3-1986. The said bill was passed and made an Act. In terms of this Act, the appellants are claiming refund in the matter. The lower authorities have rejected their claim and the reasoning given by the learned Collector has been incorporated above. 8. The contentions raised by the learned Collector was similar as raised in the case of M/s. Sahney Paris Rhone Ltd. (supra). The Bench over-ruled the said contention of the Collector in the following words - "We have heard both the sides, perused the Appeal Memo, Notification and the citations relied upon by the learned Consultant for the appellants. As can be seen from the facts of this case, the appellants were enjoying the exemption for goods captively consumed by them under Notification No. 118/85 till the said notification was rescinded by Notification No. 186/86 dated 1-3-1986 by which the said exemption was withdrawn. However, by Notification No. 217/86 dated 2-4-1986, the exemption was again introduced by passing the retrospective Amendment Act. The effect of the Notification No. 217/86 was extended from 1-3-1986. It seems that the appellants were not required to pay any duty for the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l obtaining prior to 1st day of March, 1986, notwithstanding the changes in the rates of duties of excise made by the Finance Bill, 1986. The provisions of the Act would have applicability only in relation to such goods. Notification No. 325/86-C.E., dated 27-5-1986 is reproduced below - 'In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Govt. hereby exempts aerated waters, falling under Heading No. 22.02 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from so much of the duty of excise leviable thereon under the Central Excises and Salt Act, 1944 (1 of 1944) as is equivalent to the duty of excise leviable thereon, which is specified in the said Schedule, already paid on the flavouring essence or concentrates falling under sub-heading 3302.10 of the said Schedule used in the manufacture of the said aerated waters'. This notification evidently had the effect of exempting aerated waters to the extent of the duty suffered by the specified inputs used in their manufacture. As the Collector has stated, the rate of duty on aerated waters did not undergo any change on the introduction of the Finance Bill, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue would stand to lose in as far as upto 28-2-1986 duty on concentrates was at the rate of 12% and the assessee was availing of set-off at that rate, while from 28-2-1986 the rate of duty was 20% and the assessee would be claiming set-off also at that rate. So revenue would stand to lose because price of the final product remained constant at 30 paise per bottle. This argument is interesting but fallacious. Because formerly the assessee was paying 12% and claiming set-off at the rate of 12% while from 28-2-1986 he would be paying at the rate of 20% and would be claiming at that rate. So the argument of learned DR that the object of the Retrospective Exemption Act was to maintain level of the rate of duty at the same level would be frustrated if the notification in question was treated as having retrospective effect, and being covered by the said Act has no force." 11. The Tribunal also have negatived this plea of the Revenue again in the case of Pure Drinks Ltd. (supra) and had applied the ratio in the case of Jammu Bottling. The learned Jt. CDR has relied on the rulings rendered by the Sundaram Clayton Ltd., wherein the Bench has held as follows - "Therefore the question is wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f or in terms of the new notification issued after the introduction of the Finance Bill. The appellants' case does not fall in that category and in view of this we hold that there is no force in the appellants plea and accordingly the appeal is rejected." 12. We observe that this ratio of the S.R.B. is in direct conflict with the ratio laid down by the Special Bench in the rulings extracted above. We are not inclined to follow the ruling of the South Regional Bench as the Special Bench rulings have been consistent and the same are being applied from time to time in all the matters arising in the Special Benches. It has to be observed that the South Regional Bench has not taken into consideration all the above rulings as the same have not been brought to their notice. Therefore, the S.R.B. has given this ruling per incuriam. The law laid down by the Supreme Court on per incuriam as rendered in the case of A.R. Antulay v. R.C. Naik [AIR 1988 (SC) 1531] is applicable to disregard the view taken by the S.R.B. Keeping in with the judicial decorum and discipline, we are bound to follow the rulings rendered by the Special Benches time and again and therefore, applying the rulings rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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