Customs, Excise and Gold Tribunal - Tamil Nadu
El. P. Em. Industrials And El. P. Kay ... vs Collector Of Central Excise on 18 December, 1989
Equivalent citations: 1991(33)ECR563(TRI.-CHENNAI)
ORDER
V.P. Gulati, Member
1. These appeals have been filed against the orders of the Collector of Central Excise (Appeals), Madras. These appeals involve common issue and, therefore, have been taken up together for disposal.
2. Brief facts of the case are that the appellants were availing of the benefit of Notification 95/83 dated 1.3.1983. However, this Notification with effect from 1.3.1986 was amended by Notification 176/86 and the benefit available to laminations in terms of Notification 95/83 was withdrawn. The appellants, however, claimed the benefit of the said Notification in terms of Sub-rule (8) of Rule 56A of the Central Excise Rules notwithstanding the withdrawal of the concession under Notification 95/83 and pleaded that they continued to be eligible for the concession inasmuch as they were earlier enjoying the benefit of the concession in terms of Notification 95/83 by way of set off by following the Rule 56A procedure. The short point that falls for determination is whether the appellants can be taken to be eligible to the benefit of the set off of duty in respect of stampings and laminations as claimed in terms of Rule 56A(8) of the Central Excise Rules. The said Sub-rule (8) for convenience of reference is reproduced below:
(8) Notwithstanding anything contained elsewhere in this rule or any change in the nomenclature or classification of any goods consequent to the commencement of the Central Excise Tariff Act, 1985 (5 of 1986), the credit of duty paid on any material, component parts of finished product shall be allowed if the credit of duty was allowable in respect of such material, component parts or finished product under this rule immediately before the commencement of the Central Excise Tariff Act, 1985 (5 of 1986):
Provided that no such credit shall apply in respect of any material, component parts or finished product,-
(i) if such credit was not allowable under this rule immediately before the commencement of the Central Excise Tariff Act, 1985 (5 of 1986), or
(ii) which are received is the factory of the manufacturer on or after the 1st March, 1987.
3. The learned Consultant Shri Satagopachari for appellants in Appeal Nos. E/424 & 425/88 and E/84/88, pleaded that the Departmental authorities had permitted them to avail of the earlier concession in terms of Notification 95/83 following the procedure under Rule 56A and drew Our attention to the permission given by the authorities in 1979, 1984 and 1985 in which the authorities have permitted the appellants to receive the duty paid stampings and laminations under Rule 56A and to avail of the benefit of proforma credit. In this connection he drew our attention to the decision of the Tribunal . On going through the decision it was pointed out to him that the Tribunal in that case has taken into consideration the rule as it was worded earlier and not the one as was worded at the relevant time and, therefore, the said decision could not be pressed into service in the proceedings before us. He, however, conceded that the benefit in respect of duty paid on laminations for use in the electric motors was available in terms of the Notification issued under Rule 8(1) of the Central Excise Rules i.e. Notification 95/83, but be pleaded that inasmuch as the procedure followed for availing of the benefit was as set out under Rule 56A they may be deemed to have been allowed the concession earlier in terms of Notification 95/83 in terms of Rule 56A and in that view of the matter they would fall within the purview of Sub-rule (8) of Rule 56A. He pleaded that the authorities themselves have given permission to them to receive the goods in terms of Rule 56A.
4. The learned Consultant Shri Chakravarti, who appeared for appellants in Appeal Nos. E/114 & 115/88, pleaded that inasmuch as Notification 95/83 was issued under Rule 8(1) of the Central Excise Rules the appellants were entitled to the benefit of the set off of duty in case of laminations and stampings used in the electric motors in terms of Notification 280/86.
5. The learned Senior D.R. for the Department pleaded that Rule 56A gives another type of concession and unless the item was notified under Rule 56A it could not be said that for the purpose of Sub-rule (8) of Rule 56A the appellants were earlier entitled to the benefit of the said concession under this Rule as the appellants had been allowed the concession under Rule 8(1). He pleaded that Sub-rule (8) of Rule 56A could be pressed in cases where the appellants were earlier allowed the benefit of the set off under the Notification issued under Rule 56A, and that in this legal view of the matter, the appellants' plea had no basis.
6. The issue that falls for our consideration is whether the appellants are covered by the provisions of Sub-rule (8) of Rule 56A for the reason that the concession made available to them earlier in terms of Notification 95/83 issued under Rule 8(1) of the Central Excise Rules was made available to them on their following the procedure under Rule 56A, A reading of the said sub-rule extracted in paragraph 2 above clearly shows that only such of those commodities would be covered, by the provisions of the said sub-rule to which before the commencement of the Central Excise Tariff Act. 1985 (5 of 1986) credit in respect of the commodity was allowable under Rule 56A immediately before the commencement of the Central Excise Tariff Act, 1985. It is an admitted position that the exemption Notification 95/83 was issued under Rule 8(1) of the Central Excise Rules and not under Rule 56A. Sub-rule (8) of Rule 56A clearly envisages that the benefit should have been available under Rule 56 A before the commencement of the Tariff Act, 1985. No case has been made out that the benefit earlier allowed was under Rule 56A. The only plea made is that since for the purpose of availing of the benefit of Notification 95/83 the Procedure under Rule 56A was followed, it should be taken to be that exemption allowed was under Rule 56A. It is observed that the commodities and materials which are eligible for the benefit of Rule 56A are notified by issue of a Notification under Rule 56A(1) and only those commodities as are notified can be said to have been allowed the benefit of credit of duty Paid under Rule 56A In the present case the goods were notified for exemption under a Notification issued under Rule 8(i) of the Central Excise Rules . In view of the above therefore, we hold the benefit of Sub -rule (8) of Rule 56A is not available as Pleaded It is observed earlier both the inputes and the finished products were falling under the same item and were notified under Rule 56A but with the introduction of the new Tariff the said items fell under different Tariff heading and therefore fell outside the purview of Rule 56A and clearly the intention was to continue the benefit which these goods were earlier enjoying till 1.3.1987 by introduction of Sub-rule (8) of Rule 56A. In respect of the goods in the present case the benefit of Notification 95/83 was withdrawn by issue of an amending Notification specifically for this product and case of these goods cannot be taken to be covered by the contingency sought to be taken care of in cases of goods which are notified under Rule 56A before the commencement of the Tariff Act, this Tribunal has held the same view in the order No, 627/1989 dated 18.9.1989 in Appeal No. E/193/88/Mas in the case of M/s. Geedee Stoll Pvt. v. collector of Central Excise and the same has been followed by the Tribunal in Order No 631/1989 dated 28.9.1989 in Appeal Nos. E/572 & 573 in the case of Meenu Equipments v. collector of central Excise, coimbatore. The said view of the Tribunal is extracted below:
I observe that the benefit of Sub-rule (8) of 56A has been made available only in respect of such of those commodities which also stood notified under Rule 56A but on account of the introduction of the new Tariff the same fell out of the ambit of Rule 56A, because the Tariff heading under the new Tariff for the same was changed. Under Rule 56A the benefit was available only in respect of such commodities which fall under the same Tariff heading. The appellants were at the relevant time before 1.3.1186 enjoying the benefit not under Rule 56A hut under the Notification 95/83 and the appellants' product was deleted from the Schedule to the said Notification. By virtue of this deletion the appellants became disentitled to the input relief in respect of their product Inasmuch as this item in question was not earlier enjoying the benefit under Rule 56A, notwithstanding the fact that in terms of Notification 95/83 the appellants were observing Rule 56 A procedure the appellants will not be eligible for the benefit of the Sub- rule(8) which only is available in respect of items which under the erstwhile Tariff stood covered under Rule 56A It is observed that when the substantive concession was available under Rule 56A only then the appellants would be entitled to the benefit of Sub-rule (8) of Rule 56A In the present case the substantive concession was not available under Rule 56A but under Notification 95/83. In this view of the matter 1 find no merits in the appeal and reject the same.
In of the above, therefore, we hold there is no force in the plea of the appellants and dismiss the appeals.