9911796707
TMI Blog2024 (10) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... t March 1986 and the appellant has filed the refund claims for the months of March, April and May 1986 immediately after the Notification which are subject matter of these appeals and accordingly, filed the refund claims without understanding the process of calculation of percentage of usage of the cotton seed oil. However, the Assistant Commissioner of Central Excise, while sanctioning the refund, has applied the provisions of Explanation (3) and (4) of the Notification for the purpose of calculation of the use of cotton seed oil, which is found to be more than 15%, which entitles the appellant for the benefit of the Exemption Notification. It is a trite law that exemption in a Notification cannot restrict the benefit of exemption. Explanation (3) and (4) which are invoked by the respondents authorities and confirmed by the appellate authority and the CESTAT only provide methodology of calculation of percentage as well as the percentage of usage of the cotton seed oil so as to see that such usage of cotton seed oil is more than in excess of 15% of the cotton seed oil used so as to grant the benefit of exemption of Rs.30 per ton of such vegetable products for additional percentage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule to the Central Excise Tariff Act, 1985. [2.1] The appellant follows various procedures under the Central Excises and Salt Act, 1944 (for short, the Act ) and the Central Excise Rules, 1944 (for short, the Rules ). [2.2] The Government of India, in exercise of its powers, issued a Notification No. 115/86 dated 1st March 1986 as amended wherein it contains the provisions for granting exemption to vegetable product falling under Sub-Heading No.1504 of the Schedule to the Central Excise Tariff Act, 1985 subject to increased use of the specified minor oils and conditions. The said Notification No. 115/86-C.E. dated 1st March 1986 reads as under: In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 99/84-Central Excises, dated the 30th April, 1984, the Central Government hereby exempts vegetable product, falling under sub-heading No. 1504.00 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), made from (i) indigenous cotton-seed oil, (ii) any one or more of the other indigenous minor oils specified in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on such monthly basis : Provided further that where a manufacturer exercises such option, he shall be eligible to vary the option only once during the financial year after giving one calender month's notice in writing to the proper officer; (5) where the percentage point increase is in a fraction, the increase in respect of such fraction shall also be taken into account for calculating the amount of such exemption. [2.3] It is the case of the appellant that the appellant was not aware as to how to claim the benefit thereunder. The said exemption was based upon the use of the cotton seed oil. The appellant somehow claimed the benefit under the said Notification based upon the figures of concurrent use of the said raw-material. [2.4] The appellant also addressed a letter dated 1st March 1986 stating that the appellant is consuming more than 15% cotton seed oil in their Vanaspati and they would be paying duty under protest. [2.5] The appellant filed three refund claims for the months of March, April and May 1986 claiming the refund as under: Sr. No. Period Amount (Rs.) 01 March, 1986 Rs. 8,32,680.00 02 April, 1986 Rs. 3,62,423.35 03 May, 1986 Rs. 6,61,677.95 [2.6] The Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there being a delay on the part of the appellant in filing the appeal. The Commissioner of Central Excise and Customs (Appeals) also decided the appeal on merits after considering the case record and the submissions made by the appellant in the appeal memorandum and the submissions made during the course of personal hearing by observing as under: It is observed from the case record that the appellants had not fulfilled the requirement of filing a specific option for claiming exemption on monthly basis or individual charge basis as required in Explanation 4 to Notification No. 11/586-CE dated 1.3.86. The appellants have also not maintained any charge wise account of cotton seed oil as required vide Explanation 3 of the said Notification. It is found that the said notification envisaged the exemption of vegetable product for each additional percentage of increase in the use of the cotton seed oil in such vegetable products in excess of 15% of the total oil subject to the ceiling of Rs. 1,000/- per metric ton of such vegetable product. The said Notification did not envisage any grant of refund on the basis of cotton oil seed or minor oil used in the vegetable product. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d oil or specified oil was to be calculated with reference to the weight of such oils and the total weight of the mixture oils immediately before such mixture is subjected to the process of hydrogenation (emphasis provided). As such, the percentage use of the specified minor oil was required to be ascertained for the purpose of exemption on charge wise basis i.e. the percentage of such oil as compared to the total weight of the mixture immediately before hydrogenation. Admittedly, the appellants had not maintained any charge wise account of cotton seed oil as was required under explanation 3 to the notification. The notification envisaged the exemption of vegetable products for each additional percentage of increase in the use of cotton seed oil for manufacture of vegetable products in the excess of 15% of the total oil subject to the ceiling of Rs. 1,000/- MT of such vegetable product. 8. We note that in the case of Wipro Ltd., vs. UOI, reported in 1997 (94) ELT 470 (SC), the Hon ble Supreme Court while examining the identical issue in respect of the Notification dated 01/03/1987 has held that a concessional benefit in respect of vegetable products using specified minor oil can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y misinterpreting the Explanation (3) and Explanation (4) of the said Notification. It was submitted that the Notification clearly demonstrates the intent on the part of the Government to grant partial exemption from duty depending upon the use of cotton seed oil or specified minor oil in excess of 15% or 3% respectively in the manufacture of the vegetable products. [4.1] Referring to the Explanation (4) of the said Notification, it was submitted that nowhere it is provided for any procedure to be followed by the person availing exemption under the said Notification. It was submitted that the CESTAT has ignored the purport and intent of the Notification inasmuch as the entire process of Hydrogenation of the cotton seed oil is a continuous process and therefore, there is no requirement of individual charge to be maintained by the appellant for usage of the cotton seed oil or minor oil for manufacture of the vegetable products. [4.2] It was further submitted that the appellant has filed the refund claims for the month of March, April and May 1986, which was immediately after the Notification dated 1st March 1986 and therefore, the appellant was not aware as to how to exactly follow t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not file any option to maintain the refund claim on monthly basis and due to such alleged default on the part of the appellant, the exemption resulted into refund and was ordered to be recovered by the impugned order. It was therefore submitted that such action on the part of the respondents authorities for recovery of the refund which was already sanctioned after proper scrutiny of the record, is contrary to the intended purport of the Exemption Notification granting exemption to the appellant on usage of the cotton seed oil for more than 15% in the manufacture of the vegetable products. [4.7] It was further submitted that reliance placed by the respondents on Explanation (3) and (4) is misplaced inasmuch as there is no mandatory requirement for maintaining the record by the appellant on individual charge-wise usage of the cotton seed oil. It was submitted that Explanation (3) merely clarifies that calculation of percentage must be made at the stage of mixture of oil immediately before Hydrogenation and Explanation (4) grants the manufacturer the option to claim month-wise or charge-wise. It was therefore submitted that the CESTAT has committed an error in concluding that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the refund claim showing the daily consumption of the cotton seed oil for the relevant period of March to June 1986. [4.12] It was submitted that the statutory register clearly demonstrates the usage of the cotton seed oil for the relevant period and accordingly, the respondents authorities could not have revised or recalled the order of refund on the basis of the application applying the provisions of Explanation (3) and (4) of the said Notification. [4.13] Learned Senior Advocate Mr. Parikh also pointed out that there is no prejudice to the Revenue if the appellant does not make a charge-wise register and claim a month wise exemption inasmuch as it is obvious from proper intelligible analysis of the Notification as in a given case the consumption of some charge is less than 15% and consumption of those charge is more than 15% would be utilized and just to bring the exemption figures of the other charge upto 15% mark. It was therefore submitted that from any point of view, a strict interpretation of the Explanation as relied upon by the respondents authorities is without any basis. It was therefore submitted that the adjudicating authority including the CESTAT have failed to under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come to the conclusion that the appellant is not entitled to the benefit of the Exemption Notification in absence of any fulfillment of Explanation (3) and (4) as prescribed the calculation of percentage of the cotton seed oil. [6] It was further submitted that the CESTAT after considering the facts of the case has rightly relied upon the decision of the Hon ble Supreme Court in the case of Wipro Limited (supra) wherein the Hon ble Apex Court while examining the identical issue in respect of the Notification has held that concessional benefit in respect of vegetable products using the specified minor oil can be claimed only in the manner prescribed therein and on fulfillment of the conditions specified in the Notification for the said purpose. It was therefore submitted that there is an express requirement prescribed in the Notification for claiming the credit which was not fulfilled and non-compliance of the essential condition is sufficient to sustain the dismissal of the refund claim of the appellant on merits. It was submitted that as per condition No.3 of the said Notification for calculation of the percentage of the usage of the cotton seed oil or specified minor oil in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal weight of the mixture of oil immediately before the mixture is subjected to the process of Hydrogenation for conversion into the vegetable products. Explanation (1) provides that vegetable product means any vegetable oil or fat which, whether by itself or in admixture with any other substance, has by Hydrogenation or by any other process been hardened for human consumption. Explanation (4) provides for an option to calculate the percentage of usage of cotton seed oil or specified minor oil either on the basis of the individual charge or on monthly basis. Considering the undisputed facts of the case, it emerges from the record that the appellant has used the cotton seed oil more than 15% per month. The Notification No. 115/86 came into effect from 1st March 1986 and the appellant has filed the refund claims for the months of March, April and May 1986 immediately after the Notification which are subject matter of these appeals and accordingly, filed the refund claims without understanding the process of calculation of percentage of usage of the cotton seed oil. However, the Assistant Commissioner of Central Excise, while sanctioning the refund, has applied the provisions of Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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