Custom, Excise & Service Tax Tribunal
M/S. Granite Industrial Corporation ... vs Commissioner Of Central Excise on 3 October, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/638/2004-DB (Arising out of Order-in-Appeal No.194/2004-C. Ex. dated 31.3.2004/5.4.2004 passed by Commissioner of Central Excise (Appeals), Mangalore.) M/s. Granite Industrial Corporation Ltd. Appellant(s) versus Commissioner of Central Excise Mangalore. Respondent(s)
Appearance:
Mr. Raghavendra B. Hanjer, Advocate For the Appellant Mr. Mohammed Yousuf, AR For the Respondent Date of Hearing: 27/09/2016 Date of Decision: 03/10/2016 CORAM:
HON'BLE SHRI S.S. GARG, JUDICIAL MEMBER HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBER Final Order No. 20879_/ 2016 Per : Ashok K. Arya
1. The appellant viz., M/s. Granite Industrial Corporation Ltd. has filed this appeal against the Order-in-Appeal No.194/2004-CX dated 31.3.2004 passed by the Commissioner of Central Excise, Mangalore whereunder the appellant was not given benefit of SSI Notification for the period of 26 days i.e., during 1.4.2002 to 26.4.2002.
2. The appellant has been represented by learned advocate, Shri Raghavendra B. Hanjer and the Revenue has been represented by learned AR, Shri Mohammed Yousuf.
3. The learned advocate based on his appeal memorandum and written submissions inter alia submits as under:
* For the relevant period of 26 days i.e., during 1.4.2002 to 26.4.2002, Revenue mistakenly did not include the subject item viz., polished granite slabs falling under Chapter 6807 in the SSI Notification No.8/2002-CE dated 1.3.2001. The learned advocate for the appellant submits that for the subject item, polished granite slab, benefit of SSI exemption was withdrawn by Notification No.11/2002 dated 1.3.2002 by amending the Clause 1 to Annexure of the Notification No.8/2001-CE dated 1.3.2001. However, he further submits that the Notification No.26/2002 CE dated 27.4.2002 allowed SSI exemption benefit to the item, polished granite slab. He refers to the contents of the Notification No.26/2002-CX dated 27.4.2002 whereby the Notification No.8/2002-CE dated 1.3.2002 was amended inter alia providing that the clearances for home consumption of goods falling under Chapter heading 6807, whether on payment of duty, or otherwise, between 1.4.2002 to 26.4.2002 shall be taken into account while computing the aggregate value of clearances at nil rate of duty under Sl. No.I of the said Table for the financial year 2002-03. He further submits that, therefore, there was no liability of payment of central excise duty for the clearances made for the item viz. polished granite slab during the relevant period of 26 days i.e. between 1.4.2002 to 26.4.2002.
* The learned advocate further emphasizes that when there is clear-cut benefit given to the subject item in the Notification No.8/2002-C. Ex. (supra) by way of amending the same vide Notification No.26/2002-C. Ex. (supra), the duty of central excise is not chargeable on the said item, polished granite slab during the relevant period of 26 days.
* In support, the appellant relies on the Honble Supreme Courts decision in the case of W.P.I.L Ltd. vs. CCE: 2005 (181) E.L.T. 359 (S.C).
4. The learned AR for the Revenue reiterates the findings given by the lower Revenue authorities.
5. We have carefully considered the facts of the case, the submissions made by both sides, and the case law quoted.
6. After going through the wordings of the Notification No.8/2002-CX dated 1.3.2002, which was amended by the Notification No.26/2002-CX (supra), it is clear that the legislature had no intention to charge duty on the subject item viz., granite slab falling under Chapter Heading No.6807 during the relevant period i.e., during 1st April 2002 to 26th April 2002. To make the position more clear, the Notification No.26/2002-C. Ex. dated 27.4.2002 is reproduced below:
NOTIFICATION NO.
26/2002-Central Excise, Dated: April 27, 2002 In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications of the Government of India, in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed, shall be amended or further amended, as the case may be, except as respects things done or omitted to be done before such amendment, in the manner specified in the corresponding entry in column (3) of the said Table.
TABLE S. No. Notification No. and date Amendment (1) (2) (3)
3.
8/2002-Central Excise, dated the 1st March, 2002 In the said notification, -
(a) in paragraph 3, after the first proviso, the following proviso shall be added namely :-
Provided further that the clearances for home consumption of goods falling under heading Nos. 25.04, 68.07 or sub-heading No. 3605.10, whether on payment of duty or otherwise, between 1st April, 2002 and 26th April, 2002, (both days inclusive) shall be taken into account while computing the aggregate value of clearances at Nil rate of duty under Sl. No. I of the said Table for the financial year 2002-2003.
(b) in the Explanation, after clause (I), the following shall be inserted, namely :-
(J) refund of duty paid on clearances made before the 27th day of April, 2002 on the ground that such clearances are included in the aggregate value of clearances under Sl. No. 1 of the said Table, shall not be admissible.;
(c) in the Annexure, -
(i) item (v) and the entry relating thereto shall be omitted;
(ii) for item (vii) and the entry relating thereto, the following shall be substituted, namely;-
(vii) all goods falling under sub-heading No. 3605.90;.
6.1 We refer to the following wordings given in Col. 3 at Clause (a) in the table annexed to the Notification No.26/2002 (supra) given above:
Provided further that the clearances for home consumption of goods falling under heading Nos. 25.04, 68.07 or sub-heading No. 3605.10, whether on payment of duty or otherwise, between 1st April, 2002 and 26th April, 2002, (both days inclusive) shall be taken into account while computing the aggregate value of clearances at Nil rate of duty under Sl. No. I of the said Table for the financial year 2002-2003. The goods falling under Chapter Heading 6807 have been specifically mentioned there. It clearly shows that the Legislature wants to include this item also under the benefit of Notification No.8/2002-CX (supra). It has been mentioned here in the Col. 3 at Clause (a) of above Notification No.26/2002 (supra) that whether the item was cleared on payment of duty or otherwise, it is to be computed for aggregate value of clearances at nil rate of duty. Further, at Clause (b) in Col.3 of the Table annexed to this Notification, it says that wherever duty has been paid for the clearances made before 26.4.2002, no refund of duty shall be admissible. In other words, wherever clearances have been made at nil rate of duty, such clearances will not be charged to duty. It is again to be noted that for the items included in the Notification No.8/2002 by this amended Notification No.26/2002 (supra), the wordings in the Col.3 Clause (a) of this Table specifically mentions that clearances for consumption made whether on payment of duty or otherwise between 1.4.2002 to 26.4.2002 are to be taken into account for calculating aggregate value of clearances at nil rate of duty. The meaning and implication of above wordings are in favour of the appellant, who argues that there is no liability of duty for the subject item during relevant period of 26 days i.e., from 1.4.2002 to 25.4.2002. We find that Honble Supreme Courts decision in the case of WPIL Ltd. (supra) also supports the stand that for the intervening period of 26 days (1.4.2002 to 26.4.2002) there cannot be any demand of duty for the subject item. The Honble Supreme Court in the said case inter alia observes as under:
14. In our opinion, therefore, the authorities were in? error in upholding the demand and in directing the appellant to pay excise duty.
15. The learned Counsel for the appellant is also right? in relying upon a decision of this Court in Collector of Central Excise, Shillong v. Wood Craft Products Ltd., [(1995) 3 SCC 454]. In that case, this Court held that a clarificatory notification would take effect retrospectively. Such a notification merely clarifies the position and makes explicit what was implicit. Clarificatory notifications have been issued to end the dispute between the parties.
16. In view of the consistent policy of the Government of exempting parts of power driven pumps utilized by the factory within the factory promises, it could not be said that while issuing Notification No. 46/94 of March 1, 1994, the exemption in respect of said item which was operative was either withdrawn or revoked. The action was taken only with a view to rescinding several notifications and by issuing a composite notification. The policy remained as it was and in view of demand being made by the Department, a representation was made by the industries and on being satisfied, the Central Government issued a clarificatory Notification No. 95/94 on April 25, 1994. It was not a new notification granting exemption for the first time in respect of parts of power driven pumps to be used in the factory for manufacture of pumps but clarified the position and made the position explicit which was implicit. 6.2 Considering the above observations of the Honble Supreme Court, we are of the considered view that there is no liability of payment of duty for the subject item for the period of 26 days as the policy of the Government of exempting the subject item from duty has been consistent, which becomes clear from the wordings of the clarificatory Notification No.26/2002-CX (supra) and this Notification No.26/2002 (supra) made the position explicit which was earlier implicit. Consequently this appeal deserves to be allowed on merits.
7. Based on the above discussions, the appeal is allowed with consequential relief to the appellant.
(Order was pronounced in open court on 03/10/2016.) ASHOK K. ARYA TECHNICAL MEMBER S.S. GARG JUDICIAL MEMBER rv 9