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TMI Blog1984 (4) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... there was in force for small Central Excise assessees a scheme of compounded levy of duty referred to as the Simplified Procedure . Under this procedure the duty liability for each manufacturer was fixed on a monthly basis, taking into account the various relevant factors such as his past level of production ( annual value ). This monthly duty liability was to remain unchanged unless modified by the Central Excise authorities in accordance with the provisions of the Simplified Procedure. Upto 1-3-77 the manufacturers in this case were paying duty at a particular monthly rate based on the previous monthly level of production (Shri Kapil Dev could not tell us what this monthly duty liability was, or the annual value on which it was based). With effect from 1-3-77, the actual value was revised to ₹ 4,57,080 and the monthly duty liability to ₹ 10,284.43. 4. During the two months March and April 1977, the manufacturers cleared goods of the total value of ₹ 9,32,760. Out of these, goods valued at ₹ 1,43,230 were cleared for home consumption and goods valued at ₹ 7,89,030 were cleared for export and actually exported (there is a small discrepancy in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in the manner provided for in rule 173-RD of the said rules for the month in which such goods are removed from his factory for export; (ii) b stands for one-twelfth of one hundred and fifty per cent of the annual value determined under sub-rule (3) of rule 173RA of the said rules; (iii) value in relation to the goods so exported shall be the value on the date on which such goods are removed from the factory for export. 2. The conditions referred to in paragraph 1 are- (a) The assessee shall before such goods are packed for removal from the factory for export outside India inform the Superintendent of Central Excise or such other Central Excise Officer as may be specified by such Superintendent; (b) The packing of such goods shall be supervised by such Superintendent or other officer and, after the assessee has distinctively marked each package containing such goods For Export and with such other marks as such Superintendent may require, each such package shall be affixed with Central Excise seal; (c) After such goods have been so packed and sealed, the assessee shall prepare on application in Form A.R. 4 (Central Excise Series No. 60) and the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that such a manufacturer should be deemed to have paid the full amount of duty normally payable on the excisable goods manufactured and cleared by him during the month. Therefore, the manufacturers in this case should be deemed to have paid the full amount of duty on the goods cleared by them during the two months in question whether for home consumption or for exports. 10. Shri Kapil Dev further argued that the apportionment made by the Collector (Appeals) of the duty paid between the goods exported and the goods cleared for home consumption was also not correct. He submitted that the Collector (Appeals) should have gone the whole hog and admitted the refund claim in full. 11. In the end Shri Kapil Dev prayed that his appeal for allowing the entire of the amount claimed by the manufacturers should be allowed and the appeal of the Collector should be rejected. 12. Replying on behalf of the department, Shri Pattekar also referred to the basic facts, which have already been set out earlier. He also drew our attention to various specific rules in Chapter VII-B relating to the Simplified Procedure. In particular he referred to Rules 173-RM and 173RI. They are reproduced bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of duty paid by the manufacturers during March-April, 1977 had been allocated to the goods cleared for home consumption, and no amount of duty was therefore available for payment as rebate against the goods exported. In view of this, the Assistant Collector was right in rejecting in to the claim for rebate and the Collector (Appeals) was not justified in allowing a certain amount as rebate on the basis of pro rata apportionment of the duty paid against the goods exported and the goods cleared for home consumption. Shri Pattekar, therefore, submitted that the appeal of the manufacturers should be rejected and that the order of the Collector (Appeals) should be set aside and the order of the Assistant Collector restored. 14. We have given our careful consideration to the issue involved in this case. On the face of it, it is difficult to see how a rebate of ₹ 1.46 lakhs could be paid in respect of goods on which duty paid was about ₹ 20,000. As explained earlier, the appellants have based themselves on a. literal-interpretation of Notification No. 231/76, and have contended that it should be interpreted without reference to the provisions of the Central Excise Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e be entitled to a rebate corresponding to this deemed amount of duty. This argument is misconceived. The relevant provision, which has been referred to in para 9 above, states that the payment of the amount of duty determined shall be a full discharge of his (the assessee s) liability for the duty leviable . This is not the same as saying that the assessee shall be deemed to have actually paid the full amount of duty. Still less, does it mean that he can claim a refund or rebate based on the full amount of duty. A simple example, which we put to Shri Kapil Dev at the hearing, would make the position clear. A person may be given a complimentary ticket, without paying for it, to attend a cinema show or some other entertainment. It may happen that the show has to be cancelled, because of a power failure or some other reasons. In such a case the management of the show may announce that a refund of the admission fee will be given against each ticket. Obviously, however, this would not entitle the holder of a complimentary ticket to obtain a refund of the admission fee for the class to which he has been admitted. No doubt he has discharged his liability for the admission fee by pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oportion of the goods cleared. Therefore, in the normal course the rebate amount calculated in terms of the notification in respect of goods cleared and exported during a particular month would be much less than the amount of duty paid by the assessee during the same month. The anomalous situation in the present case has arisen because (a) the value of clearances has been much higher than one-twelfth of the average monthly value; and (b) the proportion of goods exported has been much higher than what any small assessee could normally accomplish (over five-sixths of the value of clearances). The notification does not in terms provide for this particular situation, by laying down that the rebate to be granted shall not exceed the amount of duty paid. This does not however mean that such a consideration can be totally ignored, because, as we have seen, this condition is integral to Rule 12 and Rule 173RH, under which the notification has been issued. 20. With reference to our observation that a rebate cannot exceed the amount of duty paid, we have looked into both general and legal dictionaries for definitions of the term rebate . (We had to do this as neither side placed any defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power) or of Notification No. 231/76 (which has been issued under Rule 12), which goes contrary to the above basic position must be rejected particularly when an alternative and credible interpretation is possible. 22. Therefore, having regard to the terms of Notification No. 231/76, the relevant rules, their scope and their references to duty paid , as well as the meaning of the term rebate , we are of the view that the rebate of duty payable under Notification No. 231/76 cannot, notwithstanding the absence of a specific limitation in that notification, exceed the total amount of duty paid. 23. As observed earlier, the Collector (Appeals) had gone further than the above principle, and had made a pro-rata apportionment of the duty paid in the two months under consideration, as between the goods exported and the goods cleared for home consumption. One of the points made by Shri Kapil Dev was that this apportionment was not justified. We find that there is substance in this contention. We have given at length our reasons for holding that in terms of Notification No. 231/76 the rebate payable cannot exceed the total duly paid. This arises from the inherent nature of a rebate a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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