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TMI Blog1994 (9) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... sake of convenience some of the important facts are briefly reproduced as under :- M/s. Saidex Industries is a small scale unit manufacturing Starch which fell under the erstwhile Central Excise Tariff Item No. 15-C. During the financial year 1985-86 they were availing small scale exemption under Notification No. 85/85, dated 17-3-1985. Their value of clearances during the financial year 1985-86 upto February, 1986 was Rs. 17,41,567-95 and they were accordingly paying duty @ 7.5% ad valorem (50% of normal rate of duty under Notification No. 85/85. The normal rate was 15% ad valorem). Consequent to the presen- tation of the budget on 28th Feb., 1986, Notification No. 175/86-C.E. was issued on 1-3-1986. According to this Notification a manufacturer eligible to avail this Notification in any financial year was required to pay duty at the following rates :- Value of clearances not exceeding Rs. 7.5 lakhs - Nil rate of1. duty. Value of clearances exceeding Rs. 7.5 lakhs but not exceeding2. 15 lakhs - 25% of normal duty or less 10% than normal duty whichever is less. Value of clearances exceeding Rs. 15 lakhs but not exceeding3. 75 lakhs - less 10% of normal duty. Value of clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the period 1-3-1986 to 24-3-1986 in terms of Notification No. 202/86, dated 25-3-1986 read with Notification No. 212/86, dated 25-3-1986. Against this order of Collector (Appeals) the issue had come before the Tribunal and that Bench requested for examination of the issue by a Larger Bench. 4.The appellant had requested the case to be heard on merits. The Department was represented by Shri Somesh Arora, JDR who more or less repeated the arguments pleaded by him before the Bench earlier except that instead of conceding with the decision of the Tribunal in the case of Mysore Cork Industry v. CCE, reported in 1991 (56) E.L.T. 160 (T), the ld. JDR submitted that in view of the enactment of the Central Duties of Excise (Retrospective Exemption) Act, 1986, the case tilts in favour of the department and the demand appears to be sustainable. This order of the South Regional Bench was followed in the case of National Industries Co. v. CCE under order No. 373/93-C. The relevant paragraphs of the order are reproduced below :- "The ld. Advocate for the appellants brought to our notice6. the following Instructions of the Government of India (F. No. V930)/35/Gen/86) contained in Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case the suspension of the Notification 175/86 by issue of Notification 202/86 was only for a period of one week and no more. Notification 175/86, therefore, had the statutory force and the same, therefore, had to be given effect to in case the appellants were otherwise eligible for the benefit of the same. We fail to see as to how a notification issued for a limited period of one week for whatever reason can be given effect to retrospectively. Obviously, what the authorities intended was to restrict the benefit of exemption in terms of Notification 213/86 for a limited period of one week when the operation of Notification 175/86 was suspended. We are not called upon to go into the aspect as to why this was done. The fact remains that the suspension period alone is relevant for the purpose of consideration as to whether the benefit of notification 175/86 was not available to them. So far as the application of Central Duties of Excise (Retrospective Exemption) Act was concerned, the application of the said Act was in respect of certain goods. Nothing has been shown to us that the said goods in respect of which the benefit was sought to be given in terms of Notification 213/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revived the rates which were prescribed under Notification No. 85/85, dated 17-3-1985. On examination of this matter the North Regional Bench of the Tribunal had come to the conclusion that rates prescribed under Notification No. 85/85, dated 17-3-1985 would be applicable to the appellant, in view of the fact that the Central Duties of Excise (Retrospective Exemption) Act, 1986 provided :- "Every Notification issued by the Government of India in the Ministry of Finance (Deptt. of Revenue) on or after the 3rd day of March, 1986 but before the 8th day of August, 1986 in exercise of powers conferred by sub-rule (i) of Rule 8 of Central Excise Rules, 1944 for the purpose ........ Maintaining the effective rates of duties of excise in respect of certain goods at the level obtaining prior to 1st day of March, 1986. Notwithstanding the changes in the rates of duties of excise made by the Finance Bill, 1986, shall, in so far as such Notification relates to such goods, be deemed to have and to have always had effect on and from the 1st Day of March, 1986." 8.For invoking the provisions of above Act, what is necessary to be established is whether the Notification No. 212/86-C.E., da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of duties of excise in respect of certain goods at the level obtaining prior to 1st day of March, 1986, notwithstanding the changes in the rates of duties of excise made by the Finance Bill, 1986 shall in so far as such Notification relates to such goods be deemed to have and to have always had effect on and from the 1st day of March, 1986. Within these parameters, we have to examine the rates provided for in Notification No. 212/86 issued on 25-3-1986. The rates of duties under this Notification are the rates prevailing before 1st March, 1986 and were the same as prescribed under Notification No. 85/85, dated 17-3-1985. Now examining the rates prescribed under Notification No. 175/86, dated 1-3-1986, we find that the rates under this Notification are not exactly the same as were prevalent before 1-3-1986. Therefore Notification No. 175/86, dated 1-3-1986 does not fulfil the requirement of the Act. 10. Further examining that the value of clearances is taken for a financial year for purpose of levy of duty at concessional rate in respect of small scale units, we find Notification 212/86, dated 25-3-1986 is very specific in saying that the rates applicable to SSI units, in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is true in respect of Notification No. 175/86 then it must be true in respect of Notification No. 212/86. Moreover, we find that this notification has been made applicable by passing an Act by the Parliament. 13.The SRB also observed that a statutory notification has the force of law and the effect cannot be nullified unless it is provided specifically in another notification. We find that Notification 212/86 was issued on 25-3-1986 and could be effective under normal circumstances only from 25-3-1986. This notification was covered by the requirements of the said Act which extended the operation of this Notification (212/86, dated 25-3-1986) to 1-3-1986. Thus, the finding that suspension period alone is relevant for the purpose of consideration as to whether the benefit of notification was not available to them does not appeal to us. When the Act prescribes certain conditions and says that the notifications fulfilling those conditions and issued during a particular period pertaining to particular goods shall have the effect as if they were issued on 1-3-1986. 14.It was also observed by SRB that so far as the application of Central Duties of Excise (Retrospective Exemption) Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not extend the period of operation of Notification No. 212/86, dated 25-3-1986. When the Act says "Every notification issued by the Government of India in the Ministry of Finance on or after 3-3-1986 but before the 8th day of August, 1986 in exercise of powers conferred by sub-rule (1) of Rule 8 of Central Excise Rules, 1944 for the purpose of maintaining the effective rates of duties of Excise in respect of `certain goods' at the level obtaining prior to 1st day of March, 1986 notwithstanding the changes in the rates of duties of excise made by the Finance Bill, 1986 shall, in so far as such notification relates to such goods, be deemed to have and to have always had effect on or from the 1st day of March, 1986. We find that Notification No. 212/86 was issued after 3rd day of March, 1986 and before 8th day of August, 1986 it prescribed the same rate of duty for `starch' which was prevailing before 1-3-1986 for starch under Notification No. 85/85, dated 17-3-1985 and therefore it squarely falls within the purview of the Central Duties of Excise Act, 1986. However, Notification No. 212/86 was issued maintaining effective rates of duties of Excise in respect of Starch obtaining prio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 2 and 3 of the Allahabad High Court judgment is reproduced below :- Para-2-As stated earlier clearances upto Rs. 20 lakhs were exempt under Notification No. 77 of 85. On 1st March Notification No. 175/86 was issued reducing exemption limit to Rs. 7.5 lakhs only. But this limit was restored to Rs. 20 lakhs again on 25th March, 1986 by Notification No. 213/86. The question is whether clearances from 1st March to 24th March made by the petitioner which admittedly was beyond Rs. 7.5 lakhs but below 20 lakhs was exigible to duty or not. Reliance has been placed on Notification No. 202 of 1986 issued on same day namely, 25th March, 1986 which envisaged that Notification No. 175 of 1986 was not applicable from 25th March to 31st March. Therefore, it was urged by the learned Standing Counsel for Union of India that this left no room for doubt that the Notification No. 213 of 1986 applied prospectively and clearances between 1st March, 1986 to 24th March, 1986 were exigible to duty under Notification No. 175/86 and since it was more than Rs. 7.5 lakhs the petitioner was liable to pay duty. Para-3-Although this notification was issued on 25th March, 1986 but it having allowed exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and allowed the appeal. In coming to the conclusion that Tribunal also differed from the order of the South Regional Bench in the case of Sundaram Clayton Ltd. in its order No. 261/89, dated 29-5-1989 holding that this order of the South Regional Bench was passed per incuriam. 21.It may also be noted from the above discussion that the Tribunal decision in the case of Mysore Cork Industry (supra) stands over-ruled by the ratio of the Allahabad High Court judgment referred to above. Therefore, respectfully agreeing with the views expressed by Hon'ble Member (Technical) above, it is held that Notification No. 212/86 would be applicable for the whole of the month of March, 1986. 22.[Assent per : G.P. Agarwal, Member (J)]. - On going through the separate orders proposed by my Brothers, as aforesaid, I agree with the views expressed by Shri K.S. Venkataramani, Member (Technical). Consequently, I too hold that Notification No. 212/86 would be applicable for the whole of the month of March, 1986. 23.[Assent per : G.A. Brahma Deva, Member (J)]. - I agree with the view expressed by the Members that Notification No. 212/86 would be applicable for the whole month of March, 1986. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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