Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise vs Sellammal Spinners on 16 April, 1998
Equivalent citations: 1998(104)ELT685(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. The Revenue is aggrieved with the Order-in-Appeal No. 189/96, dated 20-3-1996 granting the assessee the benefit of Notification No. 1/93 amended vide Notification No. 90/94-C.E., dated 25-4-1994. The assessee had availed the exemption in terms of the Notification No. 1/93 by computing the first clearance value of Rs. 30 lakhs only from 5-6-1994 and paid duty from 23-9-1994 on exceeding Rs. 30 lakhs clearance value. In the above back ground, the Asstt. Commissioner had held that as per the explanation 11 to the Notification No. 1/93 for computing the first aggregate value of Rs. 30 lacs the clearances at Nil rate of duty alone can be excluded and clearance effected on payment of duty cannot be excluded. Accordingly, he confirmed a differential duty demanded to the extent of Rs. 83,002/- by including the value of goods cleared on payment of duty from 1-4-1994 to 4-6-1994, besides imposing a penalty of Rs. 2,000/-.
2. The Commissioner (Appeals) held that the Asstt. Commissioner had ignored the fact Cotton yarn became "specified goods" in terms of Notification No. 1/93 w.e.f. 25-4-1994. The clearances prior to this date are clearances of "unspecified goods" which cannot logically/legally enter the foray of "first clearances of specified goods". He has held that the notification exempts specified goods cleared for home consumption on or after the 1st day of April in any financial year, in the case of first clearances of specified goods upto an aggregate value not exceeding Rs. 30 lakhs from the whole of duty of excise leviable thereon. He has also held that when a manufacturer claims this exemption he is entitled to duty free clearances of value not exceeding Rs. 30 lakhs. The assessee had claimed this right on 23-5-1995 in terms of classification list filed. Therefore, he has held that the eligibility for duty free clearance of Rs. 30 lakhs from 23-5-1994 has to be held in view of para 3 of the said notification which would state that the value of clearances of specified goods under Sub-clauses (a), (b) and (c) of opening paragraph shall not exceed Rs. 30 lakhs.
3. The ld. Consultant submits that the view taken by the Commissioner is supported by the case as rendered in Watts Electronics Pvt. Ltd. - 1994 (70) E.L.T. 127. It has again be followed in the case of CCE v. Sri Kumaran Spinners vide Order No. 2683/97, dated 3-10-1997 of this Tribunal. He submits that Sri Kumaran Spinners case is an identical case in which case, the Tribunal clearly upheld the Commissioner's order by applying the ratio of decision in Waffs Electronics Pvt. Ltd.
4. The plea raised by the ld. DR with regard to ratio of B.K. Rubber reported in 1993 (68) E.L.T. 575 (M.P.) and that of Ramakrish-na Engg. Works as reported in 1996 (83) E.L.T. 346 has since been upheld. Ld. SDR submits that the clearance of both the duty paid goods prior to the notification as well as the clearances made after the notification has to be added for computing the clearance value of Rs. 30 lacs.
5. On careful consideration of the matter, we find no infirmity in the order or the reasonings of the Commissioner (Appeals). The Tribunal in the case of Watts Electronics Pvt. Ltd. held that first clearances in a financial year are basically to indicate the order of the purpose of availing of the full exemption and partial exemption as set out in paras 1(a) and 1(b) of the notification and it is not to deny the benefit of notification upto the limits as set out in these paras, as otherwise the implementation of the notification would lead to very anomalous results. The Tribunal further held that all that is to be seen is that when a person avails of the benefit of Notification 175/86 is given the benefit of the full exemption etc. as set out in para 1(a) within the aggregate limits of Rs. 15 lakhs for individual item of the specified goods within an overall limit of Rs. 30 lakhs and thereafter upto a further amount of value of Rs. 60 lakhs within the overall value of clearances of specified goods upto Rs. 75 lakhs at the concessional rate.
6. The Tribunal followed this ratio in Sri Kumaran Spinners Pvt. Ltd. which is on identical issue. We also see the reasonings of the ld. Commissioner who has held that the Asstt. Commissioner has ignored the fact that cotton yarn became "specified goods" in terms of Notification 1/93 only with effect from 25-4-1994. The clearances prior to this date are clearances of "unspecified goods" which cannot logically/legally enter the foray of "first clearances of specified goods". He further held that the notification exempts specified goods cleared for home consumption on or after the 1st day of April in any financial year in the case of first clearance of specified goods upto an aggregate value not exceeding Rs. 30 lakhs from the whole of duty of excise leviable thereon is the correct Tariff Notification.
7. Ld. SDR submits that the Watts Electronics Pvt. Ltd. case is distinguishable, this is not acceptable to the Bench in view of the fact this Bench has already distinguished the said submission in the case of CCE v. Sri Kumaran Spinners case.
8. We agree with the reasoning adopted by the Commissioner (Appeals) and we clearly hold that the respondent's claim for seeking clearance of value from the date of notification is fully justified and in that view of the matter we do not see any merit in this appeal and hence same is rejected.