Customs, Excise and Gold Tribunal - Delhi
Akola Oil Industries Ltd. vs Collector Of Central Excise on 16 October, 1989
Equivalent citations: 1990ECR130(TRI.-DELHI), 1990(46)ELT489(TRI-DEL)
ORDER D.C. Mandal, Member (T)
1. When these matters have come up for hearing on 4-10-1989 none has appeared on behalf of the appellants. They have, however, vide their telegram dated 20-9-1989 prayed for decision on merits in their absence. While making this prayer they have stated that the admissibility of set-off under Notification No. 201/79-C.E., dated 4-6-1979 prior to its amendment on 28-2-1982 by Notification No. 105/82-C.E. was already decided by this Tribunal in its decisions reported in 1986 (25) E.L.T. 295, 1988 (35) E.L.T. 479 and 1989 (39) E.L.T. 327. We have, therefore, heard Shri Chandrasekaran, learned DR for the respondent.
2. By the impugned orders the Collector (Appeals) disposed of two orders-in-original. According to the practice prevailing in this Tribunal, the appellants have filed a supplementary appeal which is now before us for disposal. Since the first appeal was filed in time and there was delay in filing the supplementary appeal, we condone the delay in filing this supplementary appeal and allow the condonation application.
2A. On merits, the facts of the case are that the appellants manufacture vegetable products falling under Item 13 of the Central Excise Tariff. The Superintendent of Central Excise, Akola issued a Show Cause Notice No. SC/VP/81/1922, dated 9/10-9-1981 asking the appellants to show cause why amount of Rs. 32,102.00 pertaining to the period from 1-8-1979 to 28-2-1981 should not be recovered from them on the ground that they had erroneously taken credit of duty amounting to Rs. 32,102.00 in R.G. 23 records on - (1) Phosphoric Acid, (2) Nickel Catalyst, (3) Activated Carbon, (4) Tin Tops and (5) Unprinted paperpolly under Notification No. 201/79-C.E., dated 4-6-1979 claiming aforesaid items as inputs even though the said items were not inputs as they were not actually used in the manufacture of vegetable products. The Superintendent of Central Excise further stated that the credit of duty on the said items were taken by them by filing wrong declaration about the inputs. Another Show Cause Notice No. SC/VP/81/1923, dated 9/10-9-1981 was issued by the Supdt. of Central Excise in respect of the period from 1-3-1981 to 31-8-1981 asking the appellants to show cause as to why an amount of Rs. 10,144.00 for availing wrong credit on (1) Phosphoric Acid, (2) Nickel Catalyst and (3) Activated Carbon should not be recovered. Both the demands were confirmed by the Assistant Collector of Central Excise, whose decisions were upheld by the Collector of Central Excise (Appeals) by the impugned orders. Hence, the present appeal before us.
3. Shri Chandrasekaran appearing for the respondent has stated that according to the Tribunal's decisions reported in 1988 (35) E.L.T. 479 (Tribunal) in the case of Amrit Vanaspati Co. v. Collector of Central Excise, Meerut, 1987 (31) E.L.T. 218 (Tribunal) in the case of Collector of Central Excise, Chandigarh and Another v. Kashmir Vanaspati and Another and the decision contained in Order No. 740/88-C, dated 16-9-1988 in the case of Kusum Products Ltd. v. Collector of Central Excise, Calcutta, set-off of duty under Notification No. 201/79-C.E. is not admissible in respect of Phosphoric Acid, Nickel Catalyst and Activated Carbon. He has also argued that the set-off of duty paid on Tin Tops and Unprinted paperpolly is not admissible under the said Notification as these two products were not used in the manufacture of Vanaspati. He has, therefore, prayed that the appeals of the assessee may be dismissed.
4. We have considered the records of the cases and the arguments of Shri Chandrasekaran. We have also considered the written submissions filed by the appellants. Notification No. 201/79-C.E., dated 4-6-1979 exempted all excisable goods on which duty of excise is leviable and in the manufacture of which any goods falling under Item 68 of the First Schedule to the Central Excises & Salt Act, 1944 have been used, from so much of the duty of excise leviable thereon as is equivalent to the duty of excise already paid on the inputs. This notification was amended by Notification No. 105/82-C.E., dated 28-2-1982, substituting "in the manufacture of which any goods falling under Item No. 68 of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) (hereinafter referred to as "the inputs") have been used" by the following expression:-
"in the manufacture of which any goods falling under Item No. 68 of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) have been used as raw materials or component parts (hereinafter referred to as "the inputs")".
By this amendment the scope of Notification No. 201/79-C.E. was restricted inasmuch as the inputs should be used as raw-materials or component parts in the manufacture of the finished products. There was no such restriction under the original Notification prior to 1-3-1982. The periods involved in the present two appeals are prior to 28-2-1982 when the scope of the Notification was wider.
5. In the case of Carbon Industries (P) Ltd. v. Collector of Central Excise, Madras, reported in 1986 (25) E.L.T. 295 (Tribunal), it was held that the term 'input' had wide scope and not of restricted or narrow sense. It was also held that the Notification No. 105/82-C.E., dated 28-2-1982 narrowed down the scope of the 1979 Notification and the expression 'inputs' as a result of which it became necessary that the finished excisable goods should inter alia be made from the Item 68 goods, if they were to earn exemption. The said case of Carbon Industries (P) Ltd. related to period prior to amendment of Notification No. 201/79-C.E. and therefore, the restricted meaning of Notification No. 105/82-C.E. would not apply. It was, therefore, held that the appellants therein were entitled to the benefit of Notification No. 201/79-C.E. in respect of the corrugated boards on which duty under Item 68 had been paid and used in the packing of carbon elements and zinc elements. In the case of Amrit Vanaspati Co. v. Collector of Central Excise, Meerut, reported in 1988 (35) E.L.T. 479 (Tribunal), it was held by the Tribunal that setoff under Notification No. 201/79-C.E. as amended by Notification No. 105/82-C.E., dated 28-2-1982 was not admissible in respect of Nickel Catalyst, Activated Carbon and Phosphoric Acid which were neither raw-materials or component parts for use in the manufacture of Vegetable product. This decision is not applicable to the present case as the period involved in the said case of Amrit Vanaspati Co. related to a period after amendment of the Notification No. 201/79-C.E. In the case of Collector of Central Excise v. Singh Alloys and Steel Ltd., reported in 1989 (39) E.L.T. 327 (Tribunal), this Tribunal held that the set-off of duty under Notification No. 201/79-C.E., dated 4-6-1979 prior to amendment was available to all Item No. 68 goods used in the manufacture of dutiable excisable goods. It was held by the Tribunal that the Notification, as it stood prior to amendment did not restrict the benefit to such inputs are were in the nature of raw-materials and component parts for the finished goods. It was accordingly held by the Tribunal that the duty-paid burnt/sintered dolomite falling under Item 68 used in the manufacture of steel ingots was entitled to the benefit of said exemption notification. The learned DR has relied on this Tribunal's decision reported in 1987 (31) E.L.T. 218 (Tribunal) (Collector of Central Excise, Chandigarh & Another v. Kashmir Vanaspati and Another) in which it was held that set-off of duty paid on Nickel Catalyst, Bleaching activated earth and Activated Carbon used in the manufacture of vegetable products was not available under Notification No. 201/79-C.E. But the said case related to a period after amendment of the notification on 28-2-1982 and hence the said decision is not applicable to the facts of the present case.
6. We are of the view that the Notification No. 201/79-C.E. prior to amendment on 28-2-1982, did not put any restriction that inputs must be raw-material or component parts used in the manufacture of the finished products. Therefore, since the periods involved in the present two appeals were prior to amendment of the notification, the setoff of duty under un-amended Notification No. 201/79-C.E. was available to the appellants in respect of duty paid on Phosphoric Acid, Nickel Catalyst and Activated Carbon, used in the manufacture of vegetable products. The lower authorities have not discussed how Tin Tops and Unprinted paperpolly were used. In the absence of any such discussions, the admissibility of set-off in respect of duty on these two materials is required to be re-examined by the lower authorities in the light of our foregoing observations and this Tribunal's earlier decisions. Accordingly, we hold that the demand for duty of Rs. 10,144.00 raised in respect of the set-off of duty paid on Phosphoric Acid, Nickel Catalyst and Activated Carbon is not sustainable and hence the order of the lower authorities in respect of the said demand is set aside and the appeal allowed to that extent. So far as the demand for duty of Rs. 32,102.00 is concerned, the same relates to setoff of duty paid of five materials. We have already held that set-off in respect of duty paid on Phosphoric Acid, Nickel Catalyst and Activated Carbon is admissible under the Notification. But since the question of admissibility of set-off of duty on Tin Tops and Unprinted paperpolly is required to be re-examined by the lower authorities, we set aside that part of the order of the lower authority which relates to the demand of Rs. 32,102.00. The matter relating to this demand is remanded to the Assistant Collector of Central Excise for de novo examination in the light of our foregoing observations and the earlier decisions of the Tribunal.
7. The two appeals and the COD application are disposed of in the light of the above.