Customs, Excise and Gold Tribunal - Delhi
Steel Rolling Mills Of Bengal Ltd. vs Collector Of Central Excise on 5 January, 1984
Equivalent citations: 1984(16)ELT151(TRI-DEL)
ORDER I.J. Rao, Member (T)
1. These 43 Revision Applications treated as appeals before the Tribunal are dealt with together, as they involve a common point.
2. The facts, in brief, are that the appellants are re-rollers and exporters of iron or steel products falling under Item 26AA of the First Schedule of the Central Excises Act, 1944. They ( exported 1041.230 MTsofiron or steel products (hereinafter referred to as "goods") and claimed Rs. 4,68,553.50 as rebate of central excise duty. 25 claims of the petitioners for a total amount of Rs. 2,86,096.50 were sanctioned. Later, the appellants were served with 25 show cause notices-cum-demands requiring them to repay the amount calculated at Rs. 330/- per MT an amount equivalent to the duty on the billets. The show cause notices were issued on the grounds that rebate on duty paid on the billets was inadmissible. The petitioners also received 18 show cause notices in respect of the claims submitted by them but not sanctioned requiring them to explain as to why their claims to the extent of Rs. 330/- per MT should not be disallowed, After due process, the Collector passed the orders demanding the return of the alleged excess amount involved in the 25 show cause notices and reducing the sanction of rebate in the remaining 18 show cause notices.
3. On appeal, the Central Board of Excise & Customs rejected the 43 appeals against which the appellants filed revision applications transferred to us and dealt with as appeals.
4. (a) In the appeal and before us during the hearing, the appellants submitted that they observed all the formalities and complied with all the procedures and conditions for export under scheme for rebate of central excise duty and for claiming the rebate. They argued that Notification No. 43/74-C.E., dated 1-3-74 and/or 153/77-C.E., dated 18-6-77 read with Government's letter dated 8-4-74 leaves no doubt that central excise duty was paid at Rs. 330/- per MT on the billets irrespective of the rate of duty prevailing at the time of actual clearance of the billets from the producing factories. They further argued that the principles governing the determination and assessment of excise duty and those for calculating rebate under rule 12 of the Central Excise Rules are one and the same. Accordingly, the appellants submitted, the rebate on the goods should be calculated after accepting payment of duty on the billets at Rs. 330/-per MT. The appellants further elaborated that the effective rate of duty on the goods being Rs. 450/- per MT, such duty was required to be paid and the permission to remove the goods on payment of Rs. 120/- per MT has to be taken as acceptance of the fact that the difference at the rate of Rs. 330/- per MT had been paid on such goods and that such payment was not deemed payment.
(b) Further arguments of the appellants are that proviso (iii) to Notification No. 197 of 1962 dated 17-11-62 (as amended) requires that the amount of duty paid on the goods exported and the date of payment thereof is to be established from the Central Excise records to the satisfaction of the Collector. The appellants claimed that in view of Notification No. 43/74-C.E. or 153/77-C.E. they fulfilled the conditions in respect of the duty paid at the billet stage and the AR-4 applications and G.P. Is in respect of differential duty. Therefore, they argued that the Collector should have been satisfied as the duty was paid at the rate of Rs. 330/- and Rs. 120/- per MT on the goods exported,
(c) The appellants further submitted that they purchased the billets going into the manufacture of the finished goods exported, from the stock-yards-TrMvT7s7 Hindustan Steel Ltd., Tata Iron & .Steel Co. Ltd. and the Indian Iron & Steel Co. Ltd., at Calcutta, who were all major steel plants. The appellants claimed that they produced the invoices showing payment of central excise duty on the billets at the appropriate rate and filed them before the Collector and, therefore, Collector wrongly refused these as documents establishing payment of duty. The appellants argued that this refusal by the Collector was against the instructions contained in the letter of TRU dated 8-4-74.
(d) A further argument of the appellants is that the Collector's satisfaction in terms of proviso (iii) to Notification No. 197/62-C.E-, is immaterial and over-ridden by the satisfaction of the Government of India conveyed through Notification No. 43 of 74 and 153 of 77.
(e) A further argument of the appellants is that the Board, as the appellate authority, overlooked the illegal adjustments made by the Collector in regard to the amounts of rebate sanctioned and paid in the first 25 cases even though the time lapse between the dates of issue of Refund Orders and the dates of demand exceeded six months. They pointed out that the Collector himself ruled out fraudulent action on the part of the petitioners thus limiting the time to six months normally available.
5. Shri K.V. Kunhikrishnan, the learned Representative for the Respondent, opposing the arguments submitted that only the duty paid on the billets @ Rs. 120/- per MT was available to rebate and not the duty claimed to have been paid on the raw material. He referred to the wording of Notification No. 197/62-C.E. and explained that his argument is based on this notification. He submitted that a notification has to be interpreted strictly. He made particular reference to provisos (i) and (iii) of the Notification 197/62-C.E.
6. We have considered the submissions made by both the sides. The question before us for decision is whether the appellants are eligible for a rebate of Rs. 120/- per MT paid as central excise duty on the billets or "whether a further rebate of Rs. 330/- per MT said to have been paid as duty on" the billets should also be granted as rebate.
7. All the arguments of the appellants noted in para 4(a) to (e) above can be summed up to be that the excise duty paid @ Rs. 330/- per MT on the billets should be deemed to have been paid on the exported goods and should accordingly be eligible for rebate. An examination of Notification No. 43/74 (as amended) does not support the arguments of the appellants that this would amount to a proof of payment of duty @ Rs. 330/- on the goods exported. Notification No. 153/77 which has been relied upon by the appellants together with the Notification 43/74 only provides that where the products mentioned in the Table in the Notification are made from semi-finished steel on which duty at the appropriate rate has already been paid or from steel ingots falling under item 26 which are cleared from the factory on or after the 18th day of June 1977 on payment "of duty specified in the Table shall be reduced by Rs. 330/- per metric tonne. We cannot accept that as this wording in the Notification would amount to a presumption that central excise duty has been paid on the goods under export at Rs. 330/-plus Rs. 120 per MT. The appellant did not point out any notification that such a presumption is available. On the other hand, as submitted by the learned representative for the respondent, Nos. (i) and (iii) to Notification No. 197/62 are quite significant. The first proviso reads that "except as otherwise provided in the said Table or permitted by the the Central Board of Excise & Customs by general or special order the goods are exported after payment of duty in cash direct from a factory or a warehouse". Proviso (iii) reads "the amount of duty paid on the goods to be exported, and the date of payment thereof are etablished, from Centeral Excise records, to the satisfaction of the Collector". These two provisos are quite clear and do not admit of any misunderstanding. It is expected that the goods are exported on payment of duty in cash direct from a factory or a warehouse and that the amount of duty paid on the goods to be exported and the date of payment are established from the Central Excise records to the satisfaction of the Collector. In the instant case, it has not been shown to us that these provisions to the Notification 197/62 have been satisfied. On the other hand, the appellants have averred that they purchased the billets from various stockyards and what they produced and exported were iron or steel products on which they paid duty @ Rs. 120/-per metric tonne.
8. In this context, we have also examined the argument of the appellants that the Collector's satisfacauon in terms of proviso (iii) to Notification 197/62 is immaterial in view of the satisfaction of the Govt. of India conveyed through Notifications 43/74-C.E., and 153/77-C.E. We have already examined these two notifications and held that there is nothing in these provisions to justify the assumption in terms of Notification 197/62. Therefore, this argument also fails. We have also examined the certificates of Steel Authority of India Ltd., dated 21-10-82 and 3-10-83 and the copies of delivery challan-cum-invoice given by the Hindustan Steel Ltd. These documents do not show that the exported goods were paid duty @ Rs. 330/- per metric tonne. These arguments do not amount to proof of payment of central excise duty as being established from central excise records.
9. We further note that the Collector has correctly appreciated the legal position when he made the following observations in paras 7 and 8 of the impugned order: -
"7. It is also necessary to note that against Sl. No. 7A under Col. (1) of the Table appended to the Notification No. 197/62-C.E.,'dated the 17th November, 1962 (as amended), rebate of Central Excise duty to the extent of the duty actually paid at the time of clearance from the factory is permissible in case of iron or steel products falling under T.I. 26AA of the said Schedule. However, the rebate as specified under Col. (4) of the aforesaid Table shall not apply to any article in respect of which rebate of duty is allowed under the first schedule to the Customs and Central Excise Duties Export Drawback (General) Rules, 1960 or under the notification of the Government of India, Ministry of Finance (Department of Revenue) No. 215/62-C.E., dated 15-12-62. The exporters of iron or steel products are entitled to avail of any of the three aforesaid procedures and as such rebate of central excise duty" paid on the finished products and not the raw materials going into the manufacture of the finished products is permissible under rule 12 of the said Rules provided that-no drawback 11 has been paid to the exporters and the conditions set out in Notification No. 197/62-C.E. dated the 17th November, 1962 (as amended) are fulfilled.
8. Since rule 12 of the said Rules does not permit grant of rebate .7 of duty paid on raw material used in the manufacture of finished products exported, the claim has got to be restricted to the actual amount of duty paid at the time of clearance of the finished products from the factory for export."
10. We hold that neither Notification No. 43/74 nor 153/77 helps the appellants' case. For the same reasons and for a further reason that it is only a departmental letter, we do not attach any importance to the letter dated 8-4-74 of the T.R.U. which has been relied upon by the appellants.
11. The appellants have also made a plea in the revision application (and not during the hearing) that illegal adjustments were made by the Collector in regard to the amounts of rebate sanctioned and paid in the first 25 cases after the lapse of six months. The appellants did not cite any particular case and argued on the basis of date of payment and date of show cause notice to show that the adjustment was illegal as claimed by them. Such information not being available and no fresh arguments having been brought before us, we reject this ground as unsubstantiated.
12. In view of the above, the 43 appeals are dismissed,