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TMI Blog1995 (7) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... etened-vitaminised partially skimmed milk powder (SMP). It was alleged in the show cause notice, dated 2-4-1992 that the said metal containers used for packing of partially SMP were not eligible for exemption under Notification No. 181/88-C.E. (as amended), and Central Excise duty amounting to Rs. 1,041,424/- was demanded from them under Rule 196 of the Central Excise Rules, 1944, (hereinafter referred to as the `Rules ). Penal provisions under Rule 210 and Rule 173Q of the Rules were invoked. The Collector of Central Excise, Jaipur who adjudicated the matter noted that in view of the decision of the Punjab and Haryana High Court in the case of Food Specialities Ltd. v. Union of India, 1991 (51) E.L.T. 310, and of the Tribunal decision in the appellants own case vide Order No. E/74/92-D, dated 14-2-1992, there was no dispute that the goods produced by the appellants was not SMP and that the said containers were not eligible for exemption under Notification No. 181/88-C.E. He confirmed the duty demanded under Rule 196 of the Rules, read with proviso to Section 11A of the Central Excises and Salt Act, 1944 (hereinafter referred to as the `Act ). 3. The matter was posted for hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified was the skimmed milk powder (SMP). The exemption when such use was elsewhere that in the factory of production of the said metal containers, was subject to the condition that the procedure set out in Chapter X of the Rules, was followed. It is seen that the intended use for packing, covered SMP. There was no exemption with regard to the packing of partially SMP. Under Rule 192, the person wishing to obtain remission of duty on the notified goods is required to declare that such notified goods will be used for the purpose specified in the applicable notification. The declaration has to be a correct declaration [refer Union of India v. Haim Agha Jan, AIR 1968 Bom. 366; K. Hargovind Das and Company (Exports) Pvt. Ltd. v. Union of India, 1992 (57) E.L.T. 43 (Bom.); ITC Ltd. v. Union of India, 1991 (53) E.L.T. 234 (Cal.)]. Under Rule 196, if any excisable goods obtained under Rule 192 are not duly accounted for as having been used for the purpose and in the manner stated in the application in Form AL 6, then the duty leviable on the notified goods is payable by the applicant, that is L6 licensee. As held by the Tribunal in the case of Hindustan Insecticides Ltd., v. Collector o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to enjoy the benefit under Notification No. 181/88-C.E., which was available only for packing of SMP. The departmental adjudication was completed on 30-4-1991. On 16-5-1991, the Hon. Supreme Court gave liberty to the appellants to appear before the statutory authority. The Collector of Central Excise (Appeals), New Delhi for grant of relief. It is seen that yet another CWP No. 1826/91 was filed by the appellants in Delhi High Court. The Delhi High Court disposed of the matter with certain directions to the Collector of Central Excise (Appeals), New Delhi. 10. The matter before us is the remission of duty. In so far as the classification for levy of duty is concerned, we may only refer that although the order, dated 30-4-1991, of the Assistant Collector of Central Excise, Kota was confirmed by the Collector of Central Excise (Appeals), New Delhi under order dated 13-6-1991, the Tribunal had decided the matter in favour of the appellants, relying upon the decision of the Punjab and Haryana High Court in the case of Food Specialities Ltd. v. Union of India, 1991 (51) E.L.T. 310 (P H). Although it is reported that the respondents have approached the Supreme Court in Civil Appeal No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court have discussed their earlier judgments on the issue of interpretation of exemption notifications, and held that exemption being in the nature of exception has to be construed strictly at the stage of determination whether assessee falls within its terms or not. This judgment has been followed by the Hon. Supreme Court in the case of Liberty Oil Mills Pvt. Ltd. v. Collector of Central Excise, Bombay, 1995 (75) E. L.T. 13 (S.C.) = 1995 (6) RLT 121 (SC). Exemption under Notification No. 181/88-C.E. was not absolute. It was subject to the intended use, or the conditions as laid down in the Table annexed to the notification. Further, the exemption was subject to the condition that the procedure set out in Chapter X of the Rules, was followed. Under Chapter X, the liability in case of misuse of concession is cast on the user - L6 licencee. As the exemption from Central Excise duty was conditional, it is for the person who seeks to earn such an exemption to establish that the conditions subject to which the exemption was available have been fulfilled. (Refer Supreme Court s decision in the case of Bombay Oil Industries Pvt. Ltd. v. Union of India, 1994 AIR SCW 5192). 12. Metal co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants in their application for L6 licence and the goods were used for the purpose declared by them. The Tribunal had held that as the concession was wrongly extended by the department, the department was entitled to recover duty only for a period of 6 months under Rule 10(1) of the Rules. 13. In the show cause notice, the Central Excise duty has been demanded under Rule 196 of the Rules while the Collector of Central Excise, Jaipur who adjudicated the matter has confirmed the demand under Rule 196 read with proviso to Section 11A of the Act. This non-mentioning of Section 11A of the Act in the show cause notice will not vitiate the proceedings and the demand. In this connection, reference may be made to the Tribunal s decisions in the cases of (i) A. Nazi Mutheen v. Collector of Central Excise, Madras, 1988 (35) E.L.T. 519 (Tribunal), (ii) Borivli Hosiery Mills v. Collector of Customs, 1991 (56) E.L.T. 76 (Tribunal) and (iii) Shally Thapar v. Collector of Customs, 1993 (64) E.L.T. 31 (Tribunal). 14. Their assessments were provisional and the goods under consideration were being cleared in terms of Rule 9B of the Rules subject to execution of bond and bank guarantee (refer page ..... X X X X Extracts X X X X X X X X Extracts X X X X
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