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TMI Blog1983 (12) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... f the aforesaid notification. 3. A point had been raised in this case by the Central Excise authorities that the appellants, who were the owners of two different tea estates, should have claimed the benefit of the exemption separately in respect of each of the tea estates, and not jointly on the combined clearances of both, as they had done. Subsequently they had submitted claims separately in respect of each tea estate. According to Shri Khaitan, the notification clearly specified that the exemption was in respect of clearances from one or more factories in excess of the base clearances by or on behalf of a manufacturer , and therefore where a manufacturer produced the same goods from more than one factory, the production of all his factories had to be taken together. We may mention that prima facie Shri Khaitan s argument in this regard appears to be correct. However, as pointed out by Shri Tayal, the learned representative of the Department, this question need not occupy us further at this stage because even if the first (combined) claim made by the appellants is taken into account, it would still, in accordance with the main argument of the Department, be barred by limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of the financial year. The appellants had made their refund claim on 28-9-1978, which was within six months from the end of the financial year. Accordingly, their claim, which was with reference to their excess clearances during the financial year 1977-78, should taken as within time, and allowed. 7. Explaining his argument with reference to the wording of the above notification, Shri Khaitan pointed out that it repeatedly made references to clearances during any financial year. For this purpose the clearances during different financial years had to be compared. The base period, in terms of paragraph 2(2) of the notification, was a financial year, either one of the financial years 1973-74, 1974-75 or 1975-76, or all the 3 financial years, the average production during 3 financial years being taken. The qualifying period during which excess clearances over the base period were entitled to the partial exemption was also a financial year, namely, 1976-77, 1977-78 or 1978-79. Shri Khaitan also pointed to paragraph 1(c) of the notification, wherein it was laid down that if the Central Government was satisfied that there had been a substantial alteration in the pattern of clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Rules, the limitation would run from the date of payment of duty, which in each case would be at the time of the clearance. In the present case, the clearances having taken place between 4-11-1977 and 26-11-1977, the time-limit would be upto six months from these dates. Since the first claim had been made more than six months afterwards, namely on 28-9-1978, the claim, according to him, was clearly time-barred. 11. Shri Tayal submitted that under the Central Excise Rules there was no authority for holding that limitation could be computed on the basis of financial years. In this connection Shri Tayal relied upon the judgment of a Division Bench of the Kerala High Court in the case of Assistant Collector of Central Excise, Ernakulam v. T.T. Pylunny, Proprietor, Royal Smiths, Kunnakulam, reported in 1983 E.L.T. 2156 (Ker.). (It transpired only later, when Shri Khaitan sent his list of references, that one of the judgments relied upon by him was that of the Single Judge of the Kerala High Court in the same case which was later reversed by a Division Bench in the judgment cited by Shri Tayal). In that case, which related to an exemption in favour of small scale manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with by the Kerala High Court, the lower limit was ₹ 50,000 and the upper limit was ₹ 2 lakhs. In the case dealt with by the Andhra Pradesh High Court, the lower limit was 20 tonnes and the upper limit was 40 tonnes. Thus, a manufacturer who was confident that his total production during the financial year would not exceed ₹ 2 lakhs (or 40 tonnes) could straightaway get the benefit of full exemption on his first clearances during the financial year upto ₹ 50,000 (or 20 tonnes). If, however, his calculation went wrong, and before the end of the financial year his total production crossed the upper limit, he was liable to pay duty on his total production, including the first free slab upto the lower limit. In the 3 cases cited by Shri Khaitan, the assessees, who were perhaps not certain whether their total clearances during the financial year would or would not cross the upper limit, did not avail themselves of the benefit of exemption on their clearances upto the lower limit. At the end of the financial year, finding that they were entitled to the exemption, they submitted claims for refund of the duty paid on the free slab, but had their claims rejected as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation to indicate that the right to exemption would accrue only at the end of the financial year, and therefore nothing which could override the specific provisions of Rule 11 of the Central Excise Rules. It is also a matter of common knowledge of which we can take judicial notice (and which Shri Khaitan fairly did not seek to controvert) that as a matter of practice assessees were in fact availing themselves of the benefit of the exemption as soon as they calculated that their clearances during the current financial year exceeded their clearances during the base period. We are unable to accept Shri Khaitan s argument that this was only a matter of practice, and not in accordance with a strict interpretation of the notification because, as we have explained above, there is nothing in the notification which would justify a departure from the specific provisions of Rule 11. Nor would the considerations of equity which were present in the cases before the Kerala and Andhra Pradesh High Courts apply to the situation under Notification No. 198/76. 16. It is interesting to note that in its subsequent appellate decision dated 16-1-1979 in the case of Assistant Collector of Central Exc ..... 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