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TMI Blog2001 (1) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration under Rule 57G for availing Modvat credit on the lifebuoy soap noodles as input and availed Modvat credit since then. As per the agreement, the processor receives duty paid soap noodles and carry out certain processes to convert the same into cake and remove the same to the appellant on payment of Central Excise duty under the authorisation of Notification No. 305/77. The processes undertaken by the processor include plodding, extruding, cutting, stamping, wrapping in wrappers and packing in corrugated boxes. 2.1 The appellants were issued a show cause notice dated 31-3-1993 alleging that during the period from January, 1988 to December, 1992 they availed money credit irregularly for an amount of Rs. 99,64,075.08 on minor oils used in the manufacture of soap noodles in contravention of Rules 57K, 57M and 57-O read with Notification Nos. 192/87, dated 12-8-1987 and 46/89, dated 11-10-1989 and the said amount was sought to be recovered. The money credit was sought to be disallowed on the ground that - (i) the soap noodles were not finished products but semi-finished products when cleared from the appellant s factory; and (ii) all the processes relating to the manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise, Allahabad, 1999 (114) E.L.T. 850 (CEGAT). 3.1 Advancing his arguments on merits of the case, the learned Advocate contends that the expression soap in any form used in sub-heading 3401.10 of the Central Excise Tariff is used without any qualification and must be taken to include all kinds of soap. According to him, the tariff sub-heading must be interpreted strictly in accordance with the well-known rule of strict interpretation of statutes, which states that a taxation statute has to be interpreted strictly in accordance with the express language of the statute. He submits there is no room for any intendment or implication of the words. He refers to the judgment of Hon ble High Court of Allahabad in the case of Ganges Soap Works Pvt. Ltd. v. U.O.I., 1992 (43) ECR 707 (All.), which held that the soap noodles fall within the purview of sub-heading 3401.10 and further held that the assessee company was entitled to avail the benefit of Notification No. 46/89-C.E. The Hon ble Allahabad High Court observed that if a commodity is made excisable or a concession is available for the commodity, its shape, size, and form or mould could be immaterial so long as it remains the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 3401.10. 3.3 Continuing his arguments, the learned Advocate refers to Note 1 of the General Explanatory Notes which forms part of the Schedule to the Central Excise Tariff Act which provides that Where in column (3) of this Schedule, the description of an article or group of articles under a heading is preceded by - , the said article or group of articles shall be taken to be sub-classification of the article or group of articles covered by the said heading. The word Soap in any form are preceded by a - . Accordingly, if soap noodles fall within the purview of the words soap in any form , as is the stand of the appellants, soap noodles must be taken to be a sub-classification of the articles or group of articles covered by the main heading, viz., soap, organic surface active products and preparations for use as soap, in the form of bars, cakes moulded pieces or shapes, whether or not containing soap, paper, wadding, felt and non-wovens, impregnated, coated or covered with soap or detergent . Further, Note 2 of the Notes to Chapter 34 of the Tariff Act clearly lays down that for the purposes of heading No 34.01, soap applies only to soap soluble in water. It is an un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amplitude. Soap Noodles are clearly of the nature of final product entitled to the benefit of the Notifications. Accordingly, the expression final product cannot be restricted or narrowed down so as to make the availment of the money credit impossible in the case of soap noodles. Applying the rule of strict interpretation, the appellants are entitled to avail the benefit of the Notifications in the case of soap noodles manufactured by them. The plea that soap noodles were semi-finished or intermediate goods has been raised only to frustrate the valid and legitimate availment of the money credit in strict compliance of the mandatory requirements thereof. The transplantation of such a plea into the plain, unambiguous language of the Notifications by presumption or assumption would be wholly unjustified and untenable in law. In this connection, he relies upon the judgments in the case of Coromandel Fertilizers Ltd. v. U.O.I. : 1979 (4) E.L.T. (J-501) (A.P.), Superintendent of Central Excise v. R.K. Chemical Industries Pvt. Ltd., 1987 (30) E.L.T. 641 (Cal.), UOI v. Pillaiyar Soda Factory, 1992 (57) E.L.T. 261 (Mad.) = 1994 (52) ECR 479 (Madras); and Maharashtra Glass Agro Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any cogent reasons, the learned Advocate submits that it leads to a divergent classification in other Commissionerates resulting in unfair discrimination of taxes in respect of the same goods. If the stand now taken by the excise authorities is accepted, a manufacturer of soap noodles would never have been able to avail the benefit of the above notifications. In this connection, he relies upon the decisions/judgments in the case of the Central India Spinning and Weaving Manufacturing Co. Ltd. and the Express Mills, Nagpur v. Municipal Committee, Wardha, AIR 1958 SC 341; C.C.E. v. Parle Exports (P) Ltd., 1988 (38) E.L.T. 741 (SC); and Swadeshi Polytex Ltd. v. C.C.E., 1989 (44) E.L.T. 794 (SC); C.C., Bombay v. United Electrical Industries Ltd., 1999 (108) E.L.T. 609 (SC); Mangalore Chemicals Fertilizers Ltd. v. Deputy Commissioner, 1991 (55) E.L.T. 437 (SC); Punjab Rubber Allied Industries v. UOI, 1983 (12) E.L.T. 54 (P H); P.K. Nimel v. Assistant Collector of Central Excise, 1988 (36) E.L.T. 482 (Kerala); Alembic Glass Industries Ltd. v. Union of India, 1992 (59) E.L.T. 207; Akbar Badruddin Jiwani v. C.C., 1990 (48) E.L.T. 441 (CEGAT); TTK Pharma Ltd. v. C.C.E., 1993 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is strictly irrelevant. The final products having been specifically identified as soap , the benefit of the above notifications has to be made available to the products, which fall within the scope of the expression soap . A little while ago we observed that the tariff entry 34.01 relates to the soap in any form . In the instant case, the form in which the soap is manufactured and cleared by the appellants is noodles and the classification of it in that form as soap was duly approved by the Department. This unassailable factual position militates against the department s changed stand that the goods cleared from the appellant s factory were in semi-finished form. We are of the opinion that there is no rational basis to deny the benefit of the said notifications in respect of the impugned goods. Our opinion draws support from the judgment of Hon ble High Court of Allahabad in the case of Ganges Soap Works Pvt. Ltd. and Another v. U.O.I. and Others, 1992 (43) ECR 707; wherein it was held that money credit cannot be denied to minor oils used in the manufacture of soap in the form of noodles. The Hon ble High Court of Allahabad observed : We are of the view that the opposit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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