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TMI Blog1999 (2) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... ng emerges. The assessees filed a refund claim on 10-2-1988 for duty paid during the period from 12-8-1987 to 9-2-1988 based upon the Tribunal s decision in the case of Dura Foam Industries (Order No. 833/87, dated 20-10-1987 [1988 (33) E.L.T. 723 (Tribunal)]) wherein top skin, bottom skin, side skin and shreddings falling under sub-Heading 3915 of the CETA, 1985 were held to be exempt from duty in terms of Notification 222/86-C.E., dated 3-4-1986. Since the Department was of the view that the conditions prescribed in the Notification had not been fulfilled by the assessees, a show cause notice was issued to them on 22-8-1989 proposing rejection of the refund claim on this ground. The notice was adjudicated by the Assistant Collector who rejected the refund claim for the reason that no duty had been paid on the PU foam cakes from which the waste, parings, and scrap in the form of top skin, bottom skin, side skin and shreddings emerged; therefore, the condition laid down in the Notification that such waste, parings and scrap of plastic should arise from goods falling under Chapter 39 on which duty of excise leviable under the CESA, 1944 or additional duty leviable under Section 3 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is entitled to even two notifications unless one notification debars the application of the other notification by specific words to that effect. In this connection, we rely upon Tribunal s judgment in 1991 (53) E.L.T. 347 in the case of Indian Oil Corporation v. Collector of Central Excise wherein it was held, in para 8 of the report as follows : - When there are two notifications which are in force simultaneously then that notification which is beneficial to the assessee should be applied. In the said case, a similar situation arose where HVI Spindle in a notification specifically applicable to HVI Spindle oil carried a higher rate of duty whereas a mineral oil (HVI Spindle oil) was leviable to lower rate of duty. Conditions of both the notifications were satisfied by the product of the I.O.C. Tribunal allowed the contention of the I.O.C. for allowing the benefit of notification imposing lower burden of duty. 4.3 We, however, observe that there is no sufficient force in the appellant s plea that removal of P.U. foam block under Notification 217/86 for captive consumption would mean that the P.U. foam block has not already paid the duty leviable thereon. This positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 217/86, dated 1-3-1986 for manufacturing the final product, namely articles of cellular/flexible polyurethane foam and the respondents are paying duty on this end product (final product), namely, article of Flexible Polyurethane Foam falling under sub-headings 39.25, 39.23, 39.24 and 39.26 as specified in the tariff. Therefore, in my view Proviso to Notification No. 217/86 would not effect the claim of the respondents under Notification No. 53/88, if otherwise admissible. 19. From a reading of the said order passed in the case of M/s. Tirupati Foam (P) Ltd., I find that the submissions made by the ld. counsel is correct. In the said case of M/s. Tirupati Foam (P) Ltd. the attention of the Bench was not drawn to the judgment delivered by the Apex Court in the case of Swadeshi Polytex v. Collector of Central Excise, supra, or to the Annexure to the Government of India contained in Circular No. M.F. (D.R.) TRU F. No. 339/6/80-TRU, dated 6-12-1980 (extracted above). Provisions of Rule 57D were also not brought to the notice of the Bench. During the hearing samples of WPS were produced before the Bench and it was pointed out that the same had arisen as intermediate product during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quent case before the Court of Appeal (I), the court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R. said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. We went on to say that the point had to be decided by the earlier court before it could make the order which it did nevertheless, since it was decided without argument, without reference to the crucial words of the rule and without any citation of authority , it was not binding and would not be followed. The rule that a precedent sub silentio is not authoritative goes back to least to 1661 (m), when counsel said:"An hundered [sic] precedent sub silentio are not material"; and Twisden, J., agreed;" Precedents sub silentio and without argument are of no moment". Quoted with approval by this Tribunal in the case of [Collector of Central Excise, Rajkot v. Surgichem, 1987 (27) E.L.T. 548 while not following the earlier decision rendered in the case of J.L. Morison, Son Jones India Ltd., Bombay, 1984 (15) E.L.T. 251.] In view of the above, the case of M/s. Maruti Foam (P) Ltd., is only an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Col. 2 of the said Table (such goods being herein after referred to as inputs) and falling within Chapter 72 or 73 of the said Schedule on which the duty of excise leviable under the said Schedule or the additional duty leviable under the Customs Tariff Act, 1975 (51/75) as the case may be has already been paid . The Tribunal took the view that the said intermediate product can be said to be an input on which duty of excise leviable has already been paid since it was exempt by virtue of Notification 202/88. In coming to this conclusion the Tribunal relied inter alia upon the Patna High Court decision in the case of Tata Yodogawa Ltd. and Another v. Union of India and Others reported in 1987 (32) E.L.T. 521. 3.2 The present case is distinguishable from that of Machine Builders v. C.C.E. reported in 1996 (83) E.L.T. 576 in which the issue related to availment of Modvat credit on inputs used in the manufacture of final products. In that case, the assessee sought to avail Modvat credit on the strength of deemed credit orders issued by the Central Government under the second proviso to Rule 57G(2) of the Central Excise Rules, 1944, which inter alia stipulates that no credit shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on taking of Modvat credit thereon is, with respect, not good law for the reason that the Tribunal relied upon the Supreme Court judgment in the case of M/s. Chandrapur Magnets reported in 1996 (81) E.L.T. 3 in which the facts are entirely different as seen from para 4 of the judgment. The Apex Court was concerned with the interpretation of Notification No. 106/88, dated 1-3-1988 amending Notification 69/86, dated 10-2-1986 containing the condition that (b) no credit of duty paid on the goods (a)(ii) above, used in their manufacture has been taken under Rule 57A of the said Rules". The Notification was applicable to copper winding wires subject to the condition that they were manufactured out of copper wire bars of over 6 mm on which no Modvat credit had been taken. The dispute arose because some of the inputs on which Modvat credit had been availed, had been used in the manufacture of final products which were totally exempt from payment of duty. The Supreme Court held that since copper wires manufactured by the appellants had become duty free, there is no question of any adjustment of the credit amount against the duty payable on these copper wires. Moreover, 57C specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art from the question whether they could be said to have arisen from duty paid material in view of the removal of the Blocks of Polyurethane foam for captive consumption under 227/86: and it was in this context the issue as to whether word paid means actually paid or ought to have been paid was considered, and it was noticed that the judgment of the Supreme Court in the case of Swadeshi Polytech had not been noticed in case of Tirupati Foam. But there was a difference of opinion and a Member had recorded the dissenting judgment and his order revolved round the finding that Polyurethane in Primary Foam was classifiable under 3909.60 (and not 39.15) specified in Notification No. 53/88, without reference to the point s dealt with by other members apparently because his order has proceeded on a different track. 10. In the case of Nova Steel the discussion centered, around the interpretation of the Notifications No. 202/88 and 33/92 as further amended by 53/92. The main concern was regarding the effect of such amendment. In this context, the proviso to the Notification 202/88 was also examined (for the purposes of that case). Since the first proviso allowed the exemption only if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... understood not in the narrow sense of nil rate of duty being stated for the inputs in the Schedule to Tariff Act, but in the general sense that actually no duty has been demanded or paid. The case of inputs wholly exempt from duty would also be attracted (Government order dated 7-4-1986 and 30-5-1988). (iii) The words wholly exempt from duty would take in cases of unconditional exemption of whole of the duty payable and also conditional exemption of such duty where conditions are shown to have been satisfied. This clearly brings about the overlapping and divergence between the issues discussed and decided by the two Larger Benches and the difference is required to be resolved. 12. In any view while there could be various types of contingencies including those outlined in the above order their implication or consequences could be looked at in a different way as well. Thus in case of category (i) where tariff rate is nil, the goods would be excisable but not dutiable. In case of (ii) the goods would be excisable and dutiable but exempt. In case of (iii) the contingency would arise in case of captive consumption and deemed clearance for this purpose would fall under 3 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he material in dispute whereas it is only the 3rd (dissenting Member) who noted that they were classifiable under 3909.60, and therefore, were not covered under 53/88 at all. 16. In my opinion, since 39.15 has been mentioned in both the notifications, therefore it can only be concluded that more than one type of waste arises, some of which was classifiable under 39.15 and some of which was classifiable under 3909.60 and therefore, not covered by either of these notifications. 17. The present case is distinguishable from both, Maruti Udyog Machine Builders to the extent that it is neither the case of Modvat nor merely that of WPS flexible P.U. Foam. 18. The word flexible was specially emphasised in the case of Maruti Foam to differ from Tirupati Foam but both are distinguishable from the present case inasmuch as it is covered with a different Notification. 19. In the case of Notification No. 222/86 (as amended) with which we are concerned the S. No. 1 refers to Heading 39.15 and covers WPS of plastic (and not merely flexible foam) and the only condition is that this material arises from goods on which excise duty or additional duty had already been paid. The manufacturin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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