9911796707
TMI Blog1990 (10) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants to pay Rs. 3,59,885.91 P. 2. Briefly stated, the facts of the case are that the appellants obtained a Central Excise L-6 Licence bearing No. R-III/3/May, 1985 Benzene and Toluene for the manufacture of Solvents, diluent or thinner which in turn are required to be used in the manufacture of paints, varnishes, lacquers and various other Industrial uses declared by them in their AR-6 application. Accordingly, licence L-6 was granted in terms of provisions of Notification No. 75/84, dated 1-3-1984. The appellants were bringing the above mentioned goods fallng under Chapter 29 of Central Excise Tariff Act, 1985 under Chapter X procedure. After receipt of these goods, they started manufacturing thinners and solvents. The case of the appellants is that for the manufacture of `thinners and `solvents , the raw materials like Benzene, Toluene and Xylene are required. 3. The case of the Department is that the appellants are not utilising Benzene, Toluene and Xylene for the purpose declared in the Notification No. 75/84 and accordingly, the Range Superintendent issued the show cause notice requiring the appellants to show cause as to why the exemption under the Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-3-1984 is a notification which is in continuation of the earlier Notification No. 26/62-C.E., dated 24-4-1962 and No. 35/73-C.E., dated 1-8-1973 in so far as the instant isue is concerned. It was also contended that the two Notifications No. 35/73 and No. 75/84 referred to above, are in pari materia. In this connection, he drew our attention that with respect of Notification No. 35/73, the Government of India had clarified that in regard to benzene obtained in terms of notification for the manufacture of thinner, solvent or diluent, no end-use verification for thinner, which is cleared outside the factory, is necessary. The clarification of the Government of India dated 19-8-1980 in this regard, which is at Exhibit `L was relied upon by him in this regard. It was also contended before us that this practice based on this clarification, was continued even after the issue of Notification No. 75/84. In this connection, he drew our attention to the instructions issued by the Central Board of Excise Customs dated 11th February, 1988 according to which under Notification No. 75/84, the end-use verification was held to be obligatory. He, therefore, contended that this clarification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions made by both the sides. The learned Departmental Representative had contended that the requirement of end-use though not built into the exemption notification, is not only implied but also becomes imperative in a situation where the product manufactured by the appellants has other uses than in the manufacture of varnishes and paints. It was, therefore, contended that the end-use certificate is absolutely essential. Heavy reliance was placed on the decision of the Supreme Court in the case of Collector of Central Excise, Guntur v. Andhra Sugar Ltd. [1988 (38) E.L.T. 564 (SC) = 1988 (19) ECR 575 (SC)] wherein the Supreme Court has held as follows : The requirement of end-use, though not built into the exemption notification, is not only implied but also becomes imperative in a situation where the product has uses other than as drug intermediate whereas the exemption is limited only to drug intermediate, i.e. when the product is used as drug intermediate. In the abovesaid decision, their Lordships of the Supreme Court approved the decision of the Government of India in Hindustan Organic Chemicals Ltd. dated 14th September, 1989. The Government of India in that case held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on between the end-use in the Notification No. 35/73-C.E., dated 1-3-1973 and the end-use in the Notification No. 75/84-C.E. dated 1-3-1984. Therefore, there is no justification to hold that end-use verification is necessary under the Notification No. 75/84-C.E., dated 1-3-1984. 10. In this connection, we may refer to the arguments of the learned advocate, Shri R.K. Habbu. It is evident from Exhibit `F produced by the appellants (copy of the order of the Assistant Collector dated 31st October, 1986) that the Assistant Collector dropped the show cause notice against the appellants in similar issue. The Assistant Collector held that the Department has issued L-6 licence to the appellants and they have been following the Central Excise procedures. Hence, the show cause notice issued to the appellants bearing No. SCN R-III/Shalimar/L-6/804/86/775, dated 28-4-1985 was withdrawn. Once when the show cause notice was withdrawn, which was issued to the appellants, the successor Assistant Collector could not have reopened the matter without any further evidence being brought to justify his stand. In this connection, the decision relied on by the learned advocate, Shri R.K. Habbu, appearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abbu had further placed reliance on the decision of the Supreme Court in the case of Raipur Development Authority v. M/s. Chokhamal Contractors (AIR 1990 SC 1426) and contended that the decision of the Department which is a long standing one, as far as the appellants are concerned, should not be disturbed lightly, as it will have the effect of shaking the rights and titles of the appellants. In the abovesaid citation, their Lordships of the Supreme Court in paras 33 and 34, at page 1444, has followed as under : A decision on the question argued before us involves a question of legislative policy which should be left to the decision of Parliament. it is a well-known rule of construction that if a certain interpretation has been uniformly put upon the meaning of a statute and transactions such as dealings in property and making of contracts have taken place on the basis of that interpretation, the Court will not put a different interpretation upon it which will materially affect those transactions. We may refer here to the decision of the Court of Appeal rendered by Lord Evershed M.R. in Brownsea Haven Properties v. Poole Corporation (1958 Ch. 574) in which it is observed thus : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Spirit is intended for use - as solvent or diluent or thinner for the manufacture of paints, varnishes, lacquers and allied materials or for use in painting; for the manufacture of adhesives, rubber solution, water proofing compositions and similar products, in the production of plastics; for degreasing or cleaning. 18. It also provided : where such use is elsewhere than in the factory of production the exemption shall be allowable only if the procedure laid down in Chapter X of the Central Excise Rules, 1944, is followed. 19. The corresponding provisions of Notification No. 75/84 are : provided that where any such exemption is subject to the intended use, the exemption in such case shall be subject to the following conditions namely :- (i) that it is proved to the satisfaction of an officer not below the rank of Assistant Collector of Central Excise that such goods are used for the intended use specified in column (5) of the said table; and (ii) where such use is elsewhere than in the factory of production, the procedure set out in Chapter X of the Central Excise Rules, 1944, is followed." Against the entry concerning Benzene and Toluene the notification states : i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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