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TMI Blog2006 (11) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... -C.E., dated 26-11-1999 for the period from 10-12-1999 to 31-3-2000. Most of them had done so by complying with all the relevant conditions including filing of undertaking with the jurisdictional Assistant Commissioner/Deputy Commissioner of Central Excise. For the next financial year [2000 - 2001], similar undertakings of these parties required under the Notification were received belatedly by the jurisdictional Assistant Commissioner/Deputy Commissioner. In the case of the respondents in the department s appeals at Sl. No. 1 to 12, these undertakings were received by the Assistant Commissioner/Deputy Commissioner on the dates mentioned in the following table :- S. No. Appeal No. Date of receipt of undertaking by AC/DC Period for which demand of duty raised in SCN and dropped in impugned order 01. E/1185/2001 5-6-2000 1-4-2000-4-6-2000 02. E/22/2002 4-4-2000 1-4-2000-3-4-2000 03. E/23/2002 10-4-2000 1-4-2000-9-4-2000 04. E/24/2002 4-4-2000 1-4-2000-3-4-2000 05. E/25/2002 4-4-2000 1-4-2000-3-4-2000 06. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and filing of statement of accounts, the benefit of the Notification was not to be denied to them for any part of the relevant financial year [2000 - 01] on the ground of delay in the filing of undertaking for such financial year. The appellate authority considered such delay as a procedural lapse not affecting the claim of the assessee for exemption from payment of duty on the tea removed from their factories from 1-4-2000 till the dates of filing of undertakings. On the other hand, in the orders impugned in the assessees appeals, the appellate authority took the view that the filing of undertaking for each financial year was a pre-requisite for availing exemption under Notification No. 41/99-CE and that, even if all other conditions of the Notification were satisfied, the benefit would not be available to the assessees for the period prior to the date of filing of undertaking. Accordingly, learned Commissioner (Appeals) denied the benefit of exemption under the Notification to the assessees for the respective periods. The orders of the original authority dropping demands of duty were set aside and penalties were also imposed on the assessees. 2. The main issue arising in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society owns a holding exceeding ten hectares under tea cultivation. (c) In the first week of April, 2000, the manufacturer shall submit a statement of accounts, in a format to be prescribed by the jurisdictional Commissioner of Central Excise, as proof of having fulfilled the undertaking. (d) In the event of his failure to satisfy the undertaking, the manufacturer shall be liable to pay duty of excise specified in the First Schedule to the said Central Excise Tariff Act for the period referred to in condition (b). II. Tea cleared by a factory belonging to a cooperative society during any financial year subsequent to 1999-2000. (a) The benefit of exemption from duty will commence from the date of the undertaking with the Assistant Commissioner/Deputy Commissioner of Central Excise as specified in condition (b) :- (b) The manufacturer files an undertaking that :- (i) the green leaf used by the factory during the period, from the date of the aforesaid undertaking till the end of the financial year, shall not be purchased from any grower who has a holding exceeding ten hectares under tea cultivation. (ii) The co-operative society owning the factory is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g not exceeding ten hectares under tea cultivation. (ii) The factory has been working for at least six months during the year preceding the year in which the undertaking referred to in condition (b) is filed. (c) In the first week of April of each succeeding financial year the manufacturer shall submit a statement of accounts, in a format to be prescribed by the jurisdictional Commissioner of Central Excise, as proof of having fulfilled the undertaking. (d) In the event of his failure to satisfy the undertaking, the manufacturer shall be liable to pay duty of excise specified in the First Schedule to the said Central Excise Tariff Act for the period referred to in condition (b). 2. This notification shall come into effect from the 10th December. 1999. Explanation . - For the purposes of this notification, bought leaf factory means a factory which purchases not less than two-thirds of the green leaf processed by it in the preceding financial year from any grower who has a holding not exceeding ten hectares of land under cultivation of tea. [emphasis supplied] 4. Some of the factories involved in these cases belong to cooperative so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tea cleared by them from 1-4-2000 to the date preceding the date of filing of undertaking. While the appellate orders impugned in the Revenue s appeals allowed the benefit of the Notification to the assessees, those impugned in the assessees appeals denied the benefit. 5. We have heard learned SDR for the Revenue and the authorized representatives of the assessees. S/Shri M. Saravanan (Consultant) and B.G. Bhaskar (Advocate) led the arguments for assessees. 6. Both sides have endeavoured to interpret condition (a) in their own ways. According to learned SDR, there is no scope for doubt or ambiguity with regard to the meaning of this condition inasmuch as it expressly states that the benefit of exemption from duty will commence from the date of undertaking with the AC/DC of Central Excise. The date of the undertaking with the AC/DC means the date on which the undertaking is received by the AC/DC. On the other hand, learned consultant for M/s. Golden Dew Tea Factory has argued that the date of undertaking is the date on which the undertaking is sent and cannot be the date on which it is received by the AC/DC. While learned SDR has relied on the Tribunal s decision in Mala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TABLE annexed to the Notification had a chance to claim the benefit under Sl. No. IV of the said TABLE. It was argued that the Notification intended to benefit farmers (tea-growers) and therefore its provisions were to be interpreted in a manner beneficial to them. In this connection, reliance was placed on the judgment of the Supreme Court in the case of Johnson and Johnson Ltd. v CCE, Aurangabad [1997 (92) E.L.T. 23 (S.C.) = (1997) 9 SCC 681]. According to learned counsel, upon a reasonable interpretation of the conditions of the Notification, the exemption claimed by the assessees would be admissible to them. In this connection, reliance was placed on H.M.M. Ltd. v. CCE, New Delhi [1996 (87) E.L.T. 593 (S.C.) = (1996) 11 SCC 332]. Counsel also argued that the requirement of filing undertaking with AC/DC by tea manufacturers claiming the benefit of Notification 41/99-CE for any financial year subsequent to 1999-2000 was only directory. In this connection, he claimed support from the Apex Court s judgment in State of Orissa v. M.A. Tulloch Co. Ltd. [AIR 1966 SC 365]. 9. SDR also held the assessees liable to be penalized under Rule 173Q for having removed dutiable goods withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tea cleared by a bought-leaf factory during the periods, 10-12-99 to 31-3-2000 and any financial year subsequent to 1999-2000. In all these sets of conditions, one condition was identically worded and the same is condition (a) which reads as under :- The benefit of exemption from duty will commence from the date of the undertaking with the Assistant Commissioner/Deputy Commissioner of Central Excise as specified in condition (b) In respect of tea cleared by any factory [whether bought-leaf factory or factory belonging to a co-operative society] during any period [whether 10-12-1999 to 31-3-2000 or any financial year subsequent thereto], the next condition viz. condition (b) opens thus:- The manufacturer files an undertaking that.... As rightly submitted by learned SDR, conditions (a) and (b) which relate to the undertaking to be given by a tea factory for the benefit of the Notification should be read together, whereupon it will be seen that the date of the undertaking with the AC/DC is the date on which it is filed with the AC/DC by the manufacturer i.e. the date on which the AC/DC receives the undertaking into his file. It cannot be the date on which the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. It is well-established that in a taxing statute there is no room for any intendment and regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption, it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different, but that is not the case here. In this connection we may refer to the observations of Lord Watson in Salomon v. Salomon Co. (1897 A.C. 22, 38) : Intention of the legislature is a common but very slippery phrase, which, popularly understood may signify anything from intention embodies in positive enactment to speculative opinion as to what the legislature probably would have meant, although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming the benefit of exemption. Paradoxically, learned counsel, who argued that what was contained in clause (a) was only a rule of procedure and not a condition, himself required the Notification to be read as a whole. We have read the Notification as a whole and have found that both clauses (a) and (b) against Sl. No. I/II/III/IV in the TABLE laid down mandatory conditions for claiming exemption under the Notification. This view, we think, is supported by the Apex Court s judgment in Eagle Flask Industries (supra). In that case, their Lordships were examining the provisions of Notification No. 11/88-C.E. (N.T.), dated 15-4-1988 issued by the Central Government, under Rule 174A of the Central Excise Rules, 1944. This notification exempted from the operation of Rule 174 goods specified in the Schedule to the Central Excise Tariff Act, 1985 so long as such goods were chargeable to nil rate of duty or remained exempt from the whole of the duty of excise leviable thereon. The First Schedule to the Notification required the manufacturer to make a declaration and give an undertaking as specified in the prescribed form while claiming exemption for the first time under the Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.E. ibid are mandatory and therefore the assessees are liable to pay duty on the clearances of tea made during the respective periods. The case of M.A. Tulloch (supra) cited by Ld. Counsel in support of his contention that the requirement of filing undertaking was only directory is clearly distinguishable on facts. 15. The plea of time-bar raised by Shri Saravanan cannot be sustained in view of the High Court s ruling in Sri Shanmuga Bleaching Works (supra). Though, during the periods of dispute, the limitation prescribed for demanding duty from an assessee under Section 11A(1) of the Central Excise Act was six months, it was one year on the dates of issue of the relevant show-cause notices by virtue of the amendment of law carried out in between. According to the ratio of the Tribunal s Larger Bench decision in Sri Shanmuga Bleaching Works (supra), as affirmed by the Hon ble High Court, the provision of limitation which was in force on the date of issue of show-cause notice would be applicable to the demand of duty for any earlier period. Admittedly, the show-cause notices issued to the Consultant s clients were within one year from the relevant dates. Even otherwise, the time- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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