9911796707
TMI Blog1994 (3) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited v. Collector of Central Excise reported in 1992 (61) E.L.T. 138. That stand was opposed by the learned Senior Departmental Representative who contended that the Notification in question is different in its scope and terms from exemption Notification 201/79 which was the subject matter of the decision in Good Year India Limited by Delhi High Court which, it was contended, was wrongly followed by the Tribunal in the aforesaid decision. It was, therefore, pleaded by the learned Senior Departmental Representative before the Original Bench that the matter may be referred to a larger Bench for reconsideration of the said decision. Accepting that plea, the Bench had referred these appeals to this larger Bench, the point referred being - "whether IPCL decision of the Tribunal requires to be reconsidered or not." 2.Shri A.N. Haksar, learned Senior Counsel and Shri Sanjeev Grover, learned Advocate who had appeared for the appellants before the Original Bench argued the case of the appellants before us also. Shri Haksar submitted that the Tribunal decision in IPCL is good law and does not require to be changed. It had correctly followed the Delhi High Court judgment in the Good Ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and given a new interpretation to the wordings of the notification. The department, it was held, had not shown any violation had occurred especially when no ratio between input and final product has been prescribed in the notification itself and hence the allegation of not adopting the correct set off procedure available under Notification 225/86 had not been established. As it is the same Notification which is under consideration in the present appeal and as it is the stand of the department that the Tribunal's order in the aforesaid case is not correct and needs to be reconsidered which stand found prima facie acceptance by the Bench which heard these appeals originally it is necessary to examine the arguments advanced regarding the scope and effect of the said Notification. 5.Notification No. 225/86, dated 3-4-1986 is extracted below : - "Set-off of duty on specific goods of Chapters 54 and 55 if manufactured from duty paid inputs. — In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods of the description specified in column (5) of the Table hereto annexed (such goods being hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the IPCL case which is now before us for possible reconsideration. Paragraphs 29 to 31 of the Good Year judgment reported in 1990 (49) E.L.T. 44-45 are extracted below : "27. Under the present notification, a manufacturer is required to take proforma credit of the duty, paid on imports, as soon as, the inputs are brought into the factory. This credit is, then utilized and, the manufactured goods are cleared and is not linked to any particular item of the manufactured products. The language of the new notification does not require the inputs to be corelated with end product. Similarly, under Rule 56A of the Rules, which is the procedure applicable to Notification No. 95/79-C.E. as amended by Notification No. 58/82-C.E., no co-relation is required between the inputs and the final product. Moreover, the Notification No. 201/79, as well as, Rule 56A of the Rules, are self-contained codes and, the manner in which exemption is to operate, is laid down in the appendix to the said notification, as well as, Rule 56A. 28. Mr. Rajinder Dutt, on the other hand, has contended that the direction given by the Assistant Collector, is in accordance with law. As per the aforesaid No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Notification 225/86, dated 3.4.1986, we find that the benefit of exemption is to the extent of duty paid on the inputs used in or in relation to the manufacture of the final products. The quantum of exemption available is thus the excise duty paid on the inputs so used. The notification lays down that specified final products are exempt from duty equivalent to the duty paid on the inputs used in or in relation to their manufacture. It does not require that the quantum of exemption equivalent to the duty paid on particular lot of inputs should be utilised only for payment of duty on the final products made from that lot of inputs. There is neither an express or implied condition in the Notification to that effect. In other words, exemption from duty for a particular lot of final products is not to be limited to the duty paid on the inputs used in or in relation to their manufacture. This type of exemption is not to be treated on a par with notifications where the goods are exempt from duty in excess of particular percentage. Thus, if the effective rate of duty fixed under an exemption notification is, say 10% as against the non-exempted rate of, say 50%, it will be required of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal in Indian Plywood Mfg. Co. Ltd. v. Collector of Central Excise, Bombay reported in 1995 (78) E.L.T. 164 had held that the exemption under Notification 225/86 is to be availed of as the time of clearance of final products by setting off the duty paid on the inputs used in their manufacture and that no credit is contemplated. The Bench was concerned in that case with the question whether on the analogy of Rule 57E credit could be taken of the duty paid at a subsequent stage on the inputs. It was held that as Notification 225/86 did not contemplate taking of credit, benefit of Rule 57E could not be invoked, therefore which would be available only in respect of inputs received where Modvat credit benefit is provided either in the Rule or in the Notification in respect of the duty payable on the final product. It was observed that when additional duty is paid on such inputs they can only claim refund of excess duty paid on the final products, if it is otherwise permissible under Section 11B. With respect, we would like to state that while certainly credit cannot be taken under Notification 225/86, for the duty paid on inputs whether paid originally or subsequently the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
