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TMI Blog1985 (9) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner that the manufacture of rubber products was dutiable under Tariff Item No. 16A(1) of Schedule I to the Act. The petitioner also claimed exemption from payment of duty under Notification No. 80/80, dated 19-6-1980, as amended from time to time. Under this notification issued under Rule 8 of the Rules, exemption of the whole of excise duty is allowed subject to satisfying the requirements referred to therein. 2. The classification list filed by the petitioner was approved by respondent-1-Asstt. Collector of Central Excise and Customs on 27-11-1981, and the monthly returns filed thereafter by the petitioner were also accepted by the proper officer. 3. Thereafter, respondent-1 issued a show cause notice dated 13-5-1982 proposing to withdraw the approval of the classification list and also to withdraw the exemption granted to the petitioner under Notification No. 80/80. It was proposed to club the production by M/s. Regal Rubbers, the lessors with the production by the petitioner from 1-12-1981 onwards. The value of the clearance during the year would then exceed Rs. 7.5 lakhs and as a result the petitioner was called upon to pay the Excise duty of Rs. 2,40,596.13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Table hereto annexed (hereinafter referred to as the "specified goods") and falling under such Item Number of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), as is specified in the corresponding entry in Column (2) of the said Table, and cleared for home consumption on or after the 1st day of April in any financial year, by or on behalf of a manufacturer from one or more factories." 8. The proviso to the main part of the Notification reads as under : "Provided that the aggregate value of clearance of the specified goods from any factory by or on behalf of one or more manufacturers : (i) at nil rate of duty in terms of clause (a) of this paragraph, or (ii) at reduced rate of duty in terms of clause (b) of this paragraph, shall not in either case exceed rupees seven and a half lakhs in any financial year." 9. Clause No. 4, which is relevant for our purpose reads thus : "Nothing contained in this notification shall apply : (i) if the aggregate value of clearance of all excisable goods, from 'any factory' by or on behalf of one or more manufacturers, for home consumption, during the preceding financial year, had exceeded rupees twenty lakhs; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar has relied upon a decision of Allahabad High Court in Philip India Ltd. v. Union of India and Others (1980 E.L.T. 263). No doubt the Allahabad High Court was considering the meaning of the phrase 'on his own account' in Section 2(f) of the Act, Explaining this the Court observed : "2(f). Because of the use of words "engages", "production", "manufacture" and "on his own account", in Section 2(f), a person though not owning a factory or not himself doing the manufacturing process, can be considered to be a manufacturer if those who own a factory are dummy or camouflage for him or he gets the goods manufactured by them under his direction and control." Further, dealing with the phrase 'on behalf of' in Section 2(f), their Lordships held that a person being a director of two companies is not indicative of the fact that one Company is a dummy for the other and they are two distinct legal entities carrying on business on their own account and one cannot be held to be controlled by the other. 15. One other decision relied upon by the petitioner on the same point is the one reported in 1978 E.L.T. 317 (S.C.) - (Assistant Collector of Central Excise v. Shah). It was held, inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect from 17-11-80. This has been enacted in substitution of Rule 10 of the Central Excise Rules Both Rules 10 and 10A were omitted with effect from 17-11-80. The proviso to Section 11A has been introduced in place of Rule 10. 23. Rule 10A, as it stood before omission, read thus : "10-A. Residuary powers for recovery of sums due to Government- Where these Rules do not make any specific provision for the collection of any duty, or any deficiency in duty is duty has for any reason between short-levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify". 24. In D.R. Kohli's case, the Supreme Court was considering the scope of Rules 10 and 10A and observed, that any error committed the time of granting approval to the classification list can be corrected by invoking powers under Rule 10A. 25. Under what circumstances the said rule could be applied will depend upon the facts of each case. The crucial question in all such cases would be whether the case falls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t different times, in a financial year, possibly each manufacturer being a different person, it would have been permissible for him to make a claim for exemption on the ground that his total output does not exceed what is specified in the Notification. This would positively have resulted in placing a premium on the factory run by different persons at different times and a benefit of exemption would have accrued to the manufacturer, merely because he happens to be a person different from one who had earlier run the factory in the same financial year. The result would have been that such a benefit would have accrued to more than one person in the course of the same financial year, though in the case of a manufacturer to whom the first part applies, the benefit would have been comparatively less. The first proviso, it apppears to us, is designed to prevent every manufacturer, who runs the same factory at different periods of time in the financial year, from claiming the special exemption individually. That is why a special provision has been made and the exemption is restricted not on the basis of a manufacturer but on the basis of the production. In other words, the benefit is limite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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