Customs, Excise and Gold Tribunal - Delhi
Bhadrachalam Paper Boards Ltd. vs Collector Of Central Excise on 12 September, 1990
Equivalent citations: 1992(59)ELT466(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. The appellants have sought for setting aside the order in appeal dated 27-5-1986 passed by the Collector of Central Excise (Appeals), Madras rejecting the refund claim dated 22-3-1985 for Rs. 47,59,801.01 P. being the duty paid during the period 19-8-1984 to 8-11-1984 under protest.
2. The question raised in this appeal is the interpretation of amendment Notification No. 214/84 dated 9-11-1984 to the original Notification No. 108/81 dated 24-4-1981 and applicability of concessional rate of duty of 50% of the effective rate of duty to the appellants for the period noted (supra).
3. The appellants are manufacturer of various varieties of paper and paper board. The first commercial clearance was effected by them on 12-9-1979 although a small quantity of 0.4669 MT of kraft paper was cleared on 19-8-1979 for exhibition to the share holders at the Company's Annual General Meeting held in August, 1979 which according to appellants were brought back to the factory and repulped under excise supervision. However, the department has taken the date 19-8-1979 as first clearance date for the purpose of reckoning the date for availing the concessional rate of duty under Notification No. 108/81-C.E., dated 24-4-1981. The appellants have submitted that the department had restricted the benefit of exemption under the aforesaid notification to the period from 24-4-1981 to 18-8-1984 for a period of only three years three months and 26 days as against the period of five years envisaged under the notification. The appellants have submitted that they made a representation to Government of India for issu-. ing orders making the benefit of the exemption available for a full period of five years. They have stated that pending issuance of necessary notification on the insistence of the department, they paid full rate of duty on all clearances effected from 19-8-1984 onwards. Eventually, the Notification No. 214/84-C.E., dated 9-11-1984 was issued by the Government amending the second proviso to Notification No. 108/81, dated 24-4-1981 and substituting with the following proviso -
"Provided further that the exemption contained in this notification (i.e. Notification No. 108/81, dated 24-4-1981) shall not apply to clearances of the said goods effected after the expiry of a period of five years from the date of first clearance of the said goods from such factory or the date of publication of this notification in the Official Gazette, whichever is later."
In the amending Notification No. 214/84-C.E., dated 9-11-1984 an Explanatory Note is added as follows -
"Explanatory Note. - The aforesaid amendment seeks to make available the exemption under Notification No. 108/81-C.E. to an eligible unit for a period of five years from the date of first clearance of paper or paper board or the date of publication of the said Notification No. 188/81-C.E. in the Official Gazette, whichever is later."
4. The Notification No. 108/81-C.E., dated 24-4-1981 was published in Official Gazette on 24-4-1981.
5. The Department has allowed the appellants to avail the 50% exemption from duty again from 9-11-1984 onwards.
6. The appellants have submitted that they filed the refund claim on 16-3-1985 for duty paid during the period from 19-8-1984 to 8-11-1984 which has been rejected and is the subject-matter of this appeal.
7. The Assistant Collector in the order-in-original has not given any cogent reasons for rejecting the refund application. After recording the contentions, the last para of the order reads - "In the case of M/s. Bhadrachalam Paperboard Ltd., Sarapaka the date of issue of notification is the criteria for purposes of concessional rate as.it is latter than their first clearances and accordingly the concesional rate of 50% with reference to Notification No. 108/81, dated 24-4-1981". Therefore, he has passed the order rejecting their refund claim.
8. The Collector of Central Excise, (Appeals) in the impugned order has held that the appellants are entitled for five years concession from the date of first clearance i.e. from 19-8-1979 to 18-8-1984 and the date of five years cannot be taken from the date of publication of Notification No. 214/84, dated 9-11-1984 which would be beyond five years from 19-8-1979 and therefore, the intention of the Notification No. 108/81 is not to give concessional rate of duty beyond five years. He has further observed that -
"Having a clear period of five years, under the Notification No. 108/81, for concessional rate of clearances, it will not be correct or proper to allow a further period beyond the period of five years, as initially period of five years expired before coming into effect of Notification No. 214/84-C.E. The appellants have not availed the partial exemption under Notification No. 108/81 from the date of first clearance by them, and that omission cannot entitle them to avail concession for a period exceeding that of five years."
9. Shri Chidambaram, Consultant for the appellants, submitted that both the orders of the lower authorities suffer from patent errors. The Collector of Central Excise (Appeals) in his impugned order has not properly understood the facts and has totally mis-applied the facts and confused himself in reading the notification in question and applying the provisions to the facts in question. He submitted that the appellants were not asking for concession for more than five years as wrongly understood by Collector (Appeals), but their case is that they were entitled for full five years concession from the date of publication of the Notification No. 108/81 in the Gazette i.e. 24-4-1981. The Collector (Appeals) has misread the amending Notification No. 214/84 and has wrongly understood that the appellants were claiming five years concession from the date of this publication dated 9-11-1984. The Collector (Appeals) has failed to understand that Notification No. 214/84 only clarified that the effective date of expiry of five years has to be computed from the date of first clearance or the date of publication of Notification No. 108/81 whichever is later. The Notification No. 108/81 was published on 24-4-1981 and five years would conclude on 23-4-1985. The Department had granted concession upto this period. During the interim period 19-8-1984 to 8-11-1984, as there was no clarificatory notification, the appellants had paid full duty and they are now seeking the refund of the excess duty paid. He relied upon the ratio laid down by the Hon'ble Supreme Court in the case of Sham Rao v. District Magistrate, Thane (AIR 1952 SC 324 para 7) and also cited the following cases -
1. Indian Dye Stuff Industries Ltd. v. Union of India [1990 (47) E.L.T. 325]
2. Union of India v. Loksons Pvt Ltd. [1989 (43) E.L.T. 226 (Bombay)]
3. Sylvania & Laxman Ltd. v. Union of India and Anr. [1987 (30) E.L.T. 697 (Delhi)]
4. Collector of Central Excise, Baroda v. M/s. Sarangpur Cotton Mills Mfg. Co., Ahmedabad [1988 (33) E.L.T. 470 (Tri.)].
10. Mr. M. Jayaraman, learned Departmental Representative submitted that the concession of full five years has been granted to the appellants. During the disputed period, the second proviso of Notification No. 108/81 had only stated that five years had to be reckoned from the date of first clearance and, taking that period the five year period had ended on 18-8-1984. The amending Notification No. 214/84 was issued on 9-11-1984 and the Department started again granting the concession to the assessee upto 23-4-1985. The benefit of Notification No. 214/84 cannot be extended to the disputed period as the notification has no retrospective effect. Shri M. Jayaraman relied upon the following citations -
1. Witco Match Works, Kalugumalai and Anr. v. Union of India and Anr. [1983 (12) E.L.T. 345 (Madras)]
2. Union Carbide India Ltd., Calcutta v. Collector of Central Excise, Madras [1983 (12) E.L.T. 549]
3. Satya Narain Agarwal and Anr. v. the Government of India & Others [1978 (2) E.L.T. J 476]
4. Hansraj Gordhandas v. H.H. Dave, Asstt. Collector of Central Excise & Customs, Surat & Others (AIR 1970 SC 755)
11. We have heard both the sides and carefully examined the contentions of both the parties.
12. The Notificatioin No. 108/81, dated 24-4-1981 reads as follows -
"Partial exemption to printing and writing paper excluding poster paper.-
In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts printing and writing paper (other than poster paper) falling under sub-item (1) of Item No. 17 of the First Schedule of the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the said goods) from so much of the duty of excise leviable thereon as is in excess of the duty calculated at the rate of fifty per cent of the rate of duty leviable on the said goods read with any relevant notification issued under sub-rule (1) of rule 8 of the said Rules and in force for the time being:
Provided that -
(i) the said goods are manufactured out of pulp containing not less than seventy-five per cent by weight of pulp made from bamboo or wood or from a mixture of both produced within the same factory in which the said goods are manufactured;
(ii) the said goods are manufactured in a factory from which the clearances of paper or paper board falling under Item No. 17 of the said First Schedule are effected for the first time during the period commencing on the 1st day of April, 1979 and ending with the 31st day of March, 1984:
Provided further that the exemption contained in this notification shall not apply to clearances of the said goods effected after the expiry of a period of five years from the date of first clearance of the said goods from such factory".
(Only the relevant portions are extracted).
The second proviso to this notification was amended by Notification No. 214/84, dated 9-11-1984 which is extracted in para 3 above.
13. The question is whether the substitution of the second proviso to Notification No. 108/81, dated 24-4-1981 is to be taken as effective from the date of publication of notification or from the date of the amending Notification No. 214/84 dated 9-11-1984.
14. The Department on the issue of the amending Notification No. 214/84, dated 9-11-1984, has permitted the appellants to clear the goods on concessional rate of duty and allowed them to enjoy the exemption for the remaining part of five years taking into account the five year period from the date of publication in the Gazette of Notification No. 108/81 dated 24-4-1981. However, when it came to grant of refund for the interim period i.e. 9-8-1984 to 8-11-1984, the Department has rejected it on the ground that five years has to be computed from the date of the first clearance 19-8-1979.
15. The, date of Notification No. 108/81-C-E. is 24-4-1981. If this date is also the date of Gazette publication, then reading the proviso, the five year period should end on 23-4-1986. The question of grant of any concessional rate of duty beyond this period will not arise.
16. The Department has contended that five years concession will count from the date of first clearance i.e. 19-8-1979 and will end on 18-8-1984.
17. The assessee had paid full duty from 19-8-1984. The contention is that the first date of clearance is 12-9-1979 as the small quantity cleared on 19-8-1979 was brought back to the factory for further processing and that the small quantity cleared was not for sale but for exhibition purpose only. However, the refund is being sought for the period from 9-8-1984 to 8-11-1984. The Department permitted the appellants to clear on concessional rate of duty again from 9-11-1984 after the amending Notification No. 214/84-C.E., dated 9-11-1984 was issued. If the Department's contention that the period of five years for availment of the concessional rate of duty should be reckoned from the date of first clearance i.e. 19-8-1979, then, the period of concession should have ended on 19-8-1984. It is surprising to note that, on the contrary to the stand taken by it, the Department has allowed the assessee to clear the goods on concessional duty from 9-11-1984 i.e. the date of the amending Notification No. 214/84-C.E. It follows that the Department has accepted the position that the second proviso sought to be amended in Notification No. 108/81-C.E., dated 24-4-1981 by Notification No. 214/84, dated 9-11-1984 is effective from the original date of the publication in the Gazette i.e. 24-4-1981. The Department has accepted this position by granting five years time concession from the date of publication of Notification No. 108/81, which, in our view, was correct. Therefore, the Department cannot later change its stand while considering the refund claim for the period from 9-8-1984 to 8-11-1984. The Department, if they were to be consistent, should not have allowed the appellants to clear on 50% concession from 9-11-1984 on which date Notification No. 214/84 was issued amending Notification No. 108/81 dated 24-4-1981. It should have stuck to its computation that the five years period reckoned from the date of first clearance had concluded on 18-8-1984. The Department has clearly understood the meaning of the amending Notification No. 214/84, viz. to give effect to the amendment from 24-4-1981, otherwise they would not have allowed the assessee to clear goods on concessional rate of 50% from 9-11-1984. The Department having allowed the appellants to enjoy five years concession from the date of publication of Notification No. 108/81 cannot take a contrary stand to reject a part period falling within this period of five years. The Department cannot change its stand now and they are estopped from so doing. In our view, the amendment has the effect of granting duty concession to clearances effected during a period of five years from the date of first clearance from the factory (5 years from 19-8-1979, in this case) or 5 years from the date of publication of the notification in the Gazette (5 years from 24-4-1981, in this case) whichever is later (i.e. upto 23-4-1986 in the present case). The appellants are entitled to duty concession for the full period of 5 years from the date of publication of Notification No. 108/81 i.e. 24-4-1981. The period for which refund has been claimed is from 9-8-1984 to 8-11-1984 which falls within the said period of 5 years. In this view of the matter, the appellants are entitled to refund of the excess duty paid during the said period from 9-8-1984 to 8-11-1984. We do not have on record any material to show that the duty had been paid under protest. The claim has not been examined from the limitation point of view. Subject to the claim being within the period of limitation under Section 11B of the Act, the Assistant Collector is directed to grant refund consequent on this appeal being allowed by us on its merits.