Customs, Excise and Gold Tribunal - Bangalore
Commissioner Of C. Ex. vs Itc Filtrons Ltd. on 7 March, 2003
Equivalent citations: 2003(87)ECC798, 2002ECR31(TRI.-BANGALORE), 2003(154)ELT158(TRI-BANG)
ORDER S.S. Sekhon, Member (T)
1. This an appeal filed by Revenue. The Respondents, M/s. ITC Filtrons Ltd., are the manufacturers of Cigarette Filter Rods and were availing benefit of Notification No. 1/93, dated 28-2-93. During the disputed period they cleared cigarette filter rods of a value of Rs. 49,24,365 by paying the duty at 5% i.e. Notification No. 1/93 rate. A show cause notice was served on them as to why differential duty should not be demanded for the clearances during the said period, under the provisions of Section 11A of the Central Excise Act, 1944. After 16-3-95, since the tariff sub-heading 5601.00 under which cigarette filter rod was classified, was restructured into further sub-headings viz. 5601.10, 5601.21, 5601.22, 5601.29 and 5601.30 and according to this restructuring of the tariff cigarette filter rod were to be classified under sub-heading 5601.22. Since sub-heading 5601.22 was not one of the prescribed sub-headings for specific goods permissible and covered by Notification No. 1/93, they came to be covered under the said notification only after amending notification 93/95, dated 26-5-95 which was amended Sl. No. 2 of the Annexure II to notification 1/93-C.E., dated 28-2-93, to include all goods falling under sub-heading 5601 instead of the earlier restriction to goods under sub-heading 5601.00.
2. The Commissioner (Appeals) vide his impugned order found that the Department's contention that consequent to restructuring of Chapter Heading 56.01 with effect from 16-3-95 and till the date of amendment, the cigarette filter rods which was classified under Heading 5601.22 due to the restructuring of the tariff were not eligible and cannot be upheld. The reason for his view appears to be that the cigarette filter rods were covered by Notification 1/93 prior to restructuring and after amendment of notification 1/93 vide Notification 93/95; the question to determine is whether Notification 93/95 which amended by Notification 1/93 is retrospective application to grant the benefit from the date of restructuring of heading. Relying upon the decision of the Tribunal in the case of Apex Steel (P) ltd. [1995 (80) E.L.T. 368 (T)], in the case of Notification No. 202/88 amended by Notification 170/89, the ld. Commissioner held that in the present case before him the amendment of Notification 1/93, the concession would be available to goods falling under Heading 56.01/S.H 5601.00. As that was the only sub-heading in the tariff at that point of time and consequent to the restructuring of the tariff Heading 56.01 got several sub-headings and out of them the amending notification as permitted the goods falling under these headings were made eligible for the concession of Notification 1/93. Thereafter he held there was implicit has been made explicit by amending notification. It is, therefore, clarificatory in nature and would be having a retrospective effect, as held by the Tribunal in the case of Apex Steel (P) Ltd. (supra). He also agreed with the arguments put forth by the Respondents that the goods of Chapter 56.01 were never excluded from the ambit of Notification 1/93 and cigarette filter rods continued to remain under Chapter Heading 56.01 before and after restructuring of the tariff and amending the notification. Therefore, he did not uphold the Department contention and reliance of the decisions cited by the department before him, relying on the Supreme Court decisions that beneficial provision of statute should not be interpreted so as to unduly restrict the beneficial scope of policy [1994 (71) E.L.T. 334 (S.C.)], he dismissed the Revenue's appeal and upheld the order of the lower authorities.
3. Revenue has come in appeal on the following grounds -
(a) Ld. Commissioner of Customs and Central Excise (Appeals), Bangalore appears to have erred in upholding the Order-in-Original No. 256/95, dated 21-11-95 passed by the Assistant Commissioner of Central Excise/ of the erstwhile Bangalore VII Division and rejecting the Department's Appeal, relying on the ratio of the Tribunal's ruling in the case of M/s. Apex Steels Ltd., reported in [1995 (80) E.L.T. 368 (T) = 1995 (8) RLT 150 (T)], etc.
(b) Ld. Commissioner (Appeals) appears to have failed to note that the facts and circumstances of the cases relied upon by him to decide the appeal are altogether different from those involved in the impugned case.
(c) The Commissioner (Appeals) has not appreciated the fact that from 16-3-95, on account of restructuring of chapter sub-heading 56.01, the impugned product viz., cigarette filter rod was classifiable under Chapter sub-heading 5601.22 and during the period from 16-3-95 to 25-5-95, exemption is admissible only to goods falling under Chapter sub-heading 5601.00. Therefore, the cigarette filter rods which were classifiable under Chapter subheading 5601.22 of the Central Excise Tariff Act, 1985 were not eligible for the benefit of Notification No. 1/93, dated 28-2-93 during the period from 16-3-95 to 25-5-95.
(d) The Commissioner (Appeals) has failed to note that the Hon'ble Supreme Court in the case, reported in AIR 1976 SC 313-321 had, inter alia, held that in a taxing statute one has to look at what is clearly stated and there is no room for any intendment. In the same case, Hon'ble Supreme Court had further ruled that there is no equity nor any presumption about a tax and one can only took fairly at the language used.
(e) Further, Hon'ble Supreme Court in the case, reported in AIR 73 SC 1214-18, had ruled that it is not permissible for the courts to read into taxing provisions any words which are not there or exclude words, which are there.
(f) Further the Commissioner (Appeals) appears to have not considered the fact that if the Board is of the opinion that there was an analogous situation on account of non-incorporation of the restructured Chapter headings in the Notification 1/93, it would have issued notification under Section 11C of the Central Excise Act, 1944, extending the benefit of the said notification. The very fact that no such notification has been issued would imply that the intentions of the Government was not to extend the benefit of the said notifications to the impugned goods during the relevant period.
4. We have heard both sides and considered the matter and it is found -
(a) The Finance Bill, 1995, vide Clause 80 thereof proposed amendment to the Schedule to the Central Excise Tariff Act, 1985. The Bill had a declaration in terms of the Provisional Collection of Taxes Act, 1931, that the provision of Clause 80, inter alia, in the Bill was to have immediate effect under the provisions of that Act. This Bill was introduced on 15-3-95. The Clause 80 as introduced was enacted vide Finance Act 1995 on 26-5-95. Consequent to the same, Heading 5601.00 of Schedule to the Central Excise Tariff Act, 1985 was restructured into 6 digit headings. Sl. No. 2 of the Annexure II of the Notification 1/93 was simultaneously on 26-5-95 amended to include all the goods falling under Heading 5601 vide Notification 93/95, dated 26-5-95. Cigarette filter rods were exigible before and after restructuring of the Schedule.
(b) The question that arises in this case, when does a proposal to amend the Tariff entry resulting in shifting of the exigible goods classification would come in force. In view of declaration made under the Provisional Collection of Taxes Act, 1931. It is well settled by the Apex Court vide its decision in the case of Piece Electronics & Electrical Ltd. v. CCE, Pune [1996 (87) E.L.T. 577 (S.C.)] which has been followed by the Tribunal. The Apex Court by this decision has ruled as follows -
"... the Bill proposing imposition or increase of duties of Customs or Excise will have immediate effect only if a declaration had been made under Section 3 of Provisional Collection of Taxes Act, 1931. The proposed shifting of goods (exempted) from one Tariff Item to another is not covered by the Provisional Collection of Taxes Act. Since this Act does not take into account of the exemption Notification nor shifting of goods to another Tariff Entry amounts to new imposition, therefore, such proposed change would not become operative immediately from the date of presentation of the Finance Bill but from the date of its enactment...."
(c) The entire efforts of the Revenue and the decision of the Commissioner (Appeals) and the ld. Consultant appearing for the Respondents are in ignorance of this aspect of the law as settled by the Hon'ble Supreme Court. This Supreme Court decision confirming the Tribunal decision in the case of Pieco Electronics and Electrical Ltd. v. Commissioner of Central Excise, Pune, reported in [1987 (30) E.L.T. 608], appears to have escaped the notice of the lower authorities and ld. Consultant for the Respondents. In this case, Cigarette Filter Rods are not brought under the ambit of exigibility for the first time. Therefore, following the Apex Court decision, it has to be held that the benefit of exemption being availed under Notification 1/93 will continue, inspite of the declaration under the Provisional Collection of Taxes Act, 1931 till 25-5-95 and with effect from 26-5-95, vide the amendments effected by Notification 93/95. In view of the law well settled, we cannot find a reason to deny the benefit of Notification 1/93 to the impugned goods for the disputed period even though not for the reasons as arrived at by the lower authorities.
5. In view of our above findings, the Revenue's appeal is devoid of any merit and is dismissed.