Customs, Excise and Gold Tribunal - Delhi
Maruti Udyog Ltd. vs Collector Of Central Excise on 7 July, 1994
Equivalent citations: 1994(73)ELT401(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. The Collector (Appeals); New Delhi by a common order has disposed of appeals filed by Revenue as well as the assessee arising from common point of law. The appellants being aggrieved with the said order, have filed the above appeals. As they relate to same issue, they are taken up together for disposal as per law.
2. The appellants filed 18 refund claims during 1989-90 and 1990-91 amounting to Rs. 40,53,773.63 based on the registration certificates issued by the concerned State Transport Authorities to the effect that all these vehicles, which were originally cleared at the normal rate of duty had been subsequently registered as taxis and that they were entitled to the concessional rate of duty as per the Notification No. 162/86-C.E., dated 1-3-1986. The Asstt. Collector of Central Excise passed various orders in original starting from 65/90 to 77/91 sanctioning in all Rs. 30,91,402.65 to them. However, he rejected the balance amount on time bar and on the ground that the certificates required to be filed with Asstt. Collector were not submitted within the stipulated period of three months as prescribed in the notification and the claim is unsubstantiated. The appellants contend that the Id- Asstt. Collector did not reject their claim on the ground that the satisfaction required in terms of condition (i) mentioned in S. No. 6 of the notification did not exists. Both the Revenue and the appellants felt aggrieved with the orders of the Asstt. Collector and filed respective appeals before the Collector (Appeals). The ld. Collector (Appeals) framed one issue that is as to whether the benefit of the Notification No. 162/86-C.E., dated 1-3-1986 can be claimed subsequently at the time of filing the refund claims. The ld. Collector on a very careful consideration of the case of both sides, applied the ratio of the Hon'ble Supreme Court as rendered in the case of Collector of Central Excise v. Park Exports (P) Ltd. as reported in - AIR 1989 SC 644 and held that :-
"the most reasonable and logical interpretation that can be attributed to this part of the Notification 162/86 is that the concessional rate has to be availed of at the time of clearance of the goods and not subsequently. This interpretation is in harmony with the plain reading of the language of the conditions of this part of the notification and also supports the intention behind laying down the two conditions as well as the context in which this has been issued. The interpretation sought to be given by M/s. MUL on the other hand is not in tune with either the context, the intention or the plain reading of the language and on the contrary causes violence to the words framing the two conditions.
In view of the above, I hold that the appeal filed by the Department is sustainable and deserves to be allowed while the appeals filed by M/s. MUL lack force and hence are to be rejected. In regard to one of their appeals (dealt with in file No. 803-C.E./APPL/DHL/91, M/s. MUL have, however, urged a different ground that the show-cause notice claimed to have been issued on 13-6-1991 was never received by them. I find that in view of my above finding that refund claim based on the notification 162/86 dated 1-3-1986 are not at all sustainable ab initio, this point loses its impact and significance.
In the result, the appeal filed by the Department is allowed while the appeals filed by M/s. MUL fail and are hereby rejected for the reasons given above. All the appeals are disposed of accordingly".
3. We have heard Shri V. Sridharan, ld. Advocate and Shri B.K. Singh, ld. SDR for the Revenue. Ld. Counsel submitted that the assessee had followed the procedure as laid down in the notification and hence, the concessional benefit of the notification cannot be denied to them. The assessee can file refund claim as per Section 11B even after the clearances and the department is bound to grant the benefit, so long as the party has fulfilled all the requirements of the notification. The notification cannot be interpreted in such a manner so as to make it otiose and redundant. So long as the object and purpose of the notification is fulfilled the benefit cannot be denied. The ld. Advocate referring to the two conditions of the notification in question submitted that the word "and" existing in between these two condition has to be read as "if". In other words, he submitted that the said exemption is available to the assessee on satisfaction of the Asstt. Collector arrived from the act of the manufacturer, furnishing the said certificate from the concerned State Transport Authority. Ld. Advocate submitted that the certificates were obtained after the clearance of the Saloon Cars at a later period, well within 6 months, is sufficient for the satisfaction of the Asstt. Collector. Merely because, the certificates had been furnished at a later period, that by itself cannot be a ground to reject the claim. Ld. Counsel argued that the principle of promissory estoppel is applicable in the present case and the benefit of the notification cannot be denied to the assessee. Ld. Counsel placed reliance on the following rulings:
Ratan Exports & Ind. Ltd. v. Asstt. Collector of Customs -1992 (62) E.L.T. 501 Col.
Collector of Central Excise, Meerut v. I.T.C. Ltd., Saharanpur - 1992 (19) ETR 161.
Hivelm Industries Ltd., Madras v. Collector of Central Excise, Madras - 1987 (27) E.L.T. 288 Bhadrachalam Paper Boards Ltd. v. Collector of Central Excise - 1992 (59) E.L.T. 466
4. Shri B.K. Singh, ld. SDR contended that the principles of promissory estoppel is not applicable to the present case as there is no estoppel against the statute. He submitted that the goods namely saloon car were supplied to the Dealers and not to the customers and the certificate produced are not in the name of the dealers. He contended that the benefit of the notification cannot be extended merely on the principle of promissory estoppel, as the notifications were required to be strictly construed. In this context, the ld. SDR relied on the ruling of Hon'ble Supreme Court in the case of Indian Aluminium Co. Ltd. v. Thane Municipality -1991 (55) E.L.T. 454 and Bombay High Court's ruling in the case of Impex v. Collector of Customs, Bombay -1987 (29) E.L.T. 433 and that of Delhi High Court's ruling as rendered in the case of Metal Forgings Ltd. and Anr. v. Union of India - 1985 (20) E.L.T. 280 and Hon'ble Supreme Court's ruling rendered in the case of Elson Machines v. Union of India as reported in 1988 (38) E.L.T. 571.
Ld. SDR submitted that the notification clearly stipulated that the benefit of the notification has to be claimed at the time of filing classification list and the conditions clearly stipulated that the benefit is to be granted solely on the satisfaction of the Asstt. Collector. The assessee had not claimed the benefit instead had paid full duty and hence, the related claim is not permissible as per notification itself. The strict terms of the notification stipulated that the Asstt. Collector has to pass on order on his being fully satisfied of the assessee having fulfilled the terms of the notification at the time of clearance of vehicles. As the party did not avail the concession by lodging a claim in the classification list, the question of its later granting the benefit did not arise. He contended that the notification stipulated the subjective satisfaction of the conditions, prior to the clearance of goods and the said conditions cannot be looked into by Asstt. Collector by a later date after the clearance by accepting the refund claim. In this context, he relied on the following rulings :
VAZ Forwarding -1989 (42) E.L.T. 229 FCI v. Collector of Customs -1992 (60) E.L.T. 416
5. We have carefully considered the pleas of both the sides and perused the records of the case.
6. The Notification No. 162/86-C.E., dated 1-3-1986 as amended exempted the goods specified in column (3) of the Table of the notification and falling under heading Nos. of the schedule of the Central Excise Act, 1985 specified in the corresponding entry in column (2) of the said Table, from so much of the duty of excise leviable thereon which is specified in the said schedule as in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table, subject to the conditions, if any, laid down in the corresponding entry in column (5) thereof:
The Table
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S Heading Description of Rate Conditions No. No. goods
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1. 2. 3. 4. 5.
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(S. No. 1 to 5 omitted)
6. 87.03 Saloon cars Thirty Per cent ad If (i) an officer not below valolrem the rank of an Asstt. Col-
lector of Central Excise (hereinafter referred to as the said officer) is sa-
tisfied that such saloon cars are required for use solely as taxies and
(ii) the manufacturer for furnishes to the said officer a certificate from an of-
ficer authorised by the concerned State Transport Authority in this behalf within three months of the date of clearances of the saloon car by the manufacturer after payment of duty or such extended period as the said officer may allow to the effect that such saloon car has been registered for use solely as a taxi.
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In this case, the appellants did not claim the benefit of the notification in question in the first instance, nor they asked the Asstt. Collector of Central Excise for permission to clear the saloon cars for use as taxies as per the condition (1) in S. No. (5) of the above table of the notification. The notification clearly stipulated that the manufacturer was to claim the benefit before the clearances of the saloon cars and it was incumbent upon the Asstt. Collector of Central Excise or any officer not below his rank, to pass an order of clearance after due satisfaction that "such saloon cars are required for use solely as taxies". The first condition requiring clearance of saloon cars only after due satisfaction of the officer not below the rank of Asstt. Collector and that such saloon cars are required for use a taxies is not a mere empty formality or a mere procedural requirement as contended by ld. Counsel. It is a very crucial condition, in as much as, the manufacturer is required to place proof for use of saloon cars as taxies to the satisfaction of the concerned officer. The concerned officer is duty, bound to make all necessary enquiries and pass appropriate order for clearance as per the terms of the notification. Hence, it cannot be said that such subjective satisfaction is a mere empty formality, which could be fulfilled or looked into at a later period of time in a refund application. We are not agreeable with the pleas of the ld. Counsel on this point and we agree with the findings of the ld. Collector (A) that this condition precedent cannot be waived. The Tribunal in the case of Collector of Central Excise v. Muzzaffarnagar Steels -1989 (44) E.L.T. 552 analysed the duties and responsibilities of the Asstt. Collector of Central Excise before granting approval of classification list under Rule 173B of Central Excise Rules at paras 11,12 & 13 as follows :
"11. In the circumstances, when the classification list was submitted before the Asstt. Collector he should have applied his mind carefully before approving the same. It is, noteworthy that a person makes a declaration and prays in accordance with his understanding of the Law and the facts. The presumptions, if any, has to be that of bona fides unless proved otherwise. Therefore, if the description of the goods was not considered as sufficient for the purpose of approval it was open to the Asstt. Collector to have called for more details but it was not open to him to mechanically sign of.
12. We would like to take this opportunity to observe that the law casts a duty and responsibility on both the departmental officers as well as assessees (and this was true even in cases covered by SRP). The" departmental officers, therefore, cannot ignore or avoid their own responsibility in the matter.
13. The Rule 173B providing for the filing of classification list clearly shows that what is required of the Asstt. Collector is the approval "after such enquiry as he deems fit". The approval of classification list is an important part of the process of assessment and, therefore, the Asstt. Collector is required to be very careful and is expected to apply his mind before according approval. He is entitled to and indeed required to make such inquiries and summoned such information as may be called for in order to arrive at the correct decision. In other words, the act of approval was not merely a passive act or concurrence but involves an active decision making and the Asstt. Collector was required to fully satisfy himself about the particulars of goods being manufactured and the process of manufacture wherever necessary and the relevant facts and then only determine the classification and pass appropriate orders; and once the Asstt. Collector has approved the classification the department has to bear the consequences thereof.
The second condition is to be complied by manufacturer only after the clearance; by producing the necessary certificate within three months of date of clearance of the saloon cars by the manufacturer after payment of duty; from the State Transport Authority. In case they defaulted despite grant of extension, then the concessional duty was not available and the manufacturer would be bound to pay the full duty. It followed from the reading of the notification, that the first condition is a mandatory condition and it is not a mere procedural condition, which could be condoned. As even in the second condition, the emphasis is "within three months of date of clearance of the saloon cars by the manufacturer after payment of duty". It means, the manufacturer has to pay the duty at the rate specified in the notification and later produce the necessary certificate. In the event of default, it follows that the balance of duty would be recoverable. The revenue is required to adopt a procedure to safeguard its revenue and also make proper verification of the clearance of saloon cars, which are being used as a taxi. In all the cited cases noted above, the claims had been lodged in the first instance and later the procedural delay was directed to be condoned provided there was sufficient compliance of the terms of the notification. In this case neither the benefit had been claimed in the first instance nor the procedure followed. Hence, the grant of benefit at a later stage is not permissible, as it would cause violence to the terms of the notification. In this case, there is no question of considering any principle of promissory estoppel and this plea is to be rejected straight away. Thus, there is no infirmity in the orders passed by the Collector (Appeals) and we confirm the same.
6. We will examine the rulings cited by the ld. Counsel and point out as to how the same is not pari materia to the facts of the present case.
7. The case of Ratan Exports & Industries Ltd. pertains to importer complying with DEEC Scheme and the terms of Advance Licence. In the context of the case, the Calcutta High Court held that the principle of promissory estoppel would apply with all its force. The facts of this case and the principles laid down do not apply to the case in hand.
8. In CCE v. ITC Ltd., the Tribunal held that the conditions stipulated in the Notification No. 178/77-C.E. had been fulfilled and in that context held there was no requirement in the notification that the benefit therein must be claimed at the time of clearance of the cigarette and claim of refund of duty filed subsequently was maintainable. The terms of the Notification No. 178/77-C.E. is different than those of Notification No. 162/86-C.E. In this case, the manufacturer has not fulfilled the stipulated conditions of the notification and hence this ruling is not all applicable to the facts of the case.
9. In Hivelm Inds. case, the question pertained to set off benefit and availability of exemption under Notification No. 295/77-C.E. The facts are totally different and so also the terms of the notification and the same is not applicable to the facts of the case in hand.
10. In Bhadmchalam Paper Boards Ltd. case, the question was with regard to interpretation of 'five years' period for availing the benefit of Notification No. 108/81 and Notification No. 214/84 dated 9-11-1984. The same is not all applicable to the facts of the case. Further the party had been enjoying the benefit from the beginning. It is only the period of computation of 5 years period for availing the benefit as per notification which was in dispute. This ruling is also not applicable to the facts of the present case.
11. The ld. DR relied on the ruling of the Hon'ble Supreme Court in the case of Indian Aluminium Co. Ltd. The Hon'ble Supreme Court has held in para 3 of the judgment:
"The declaration contemplated in Form 14 is to the effect that the goods imported shall not be used for any other purpose for sale or otherwise etc. It can thus be seen that an incentive is sought to be given to such entrepreneurs by such concession if the raw material which is imported is also utilised in the industrial undertaking without selling or disposing of otherwise. That being the object a verification at the relevant time by the octroi authorities becomes very much necessary before a concession can be given. In the absence of filing such a declaration in the required Form 14, there is no opportunity for the authorities to verify. Therefore the petitioner company has definitely failed to fulfil an important obligation under the law though procedural. The ld. Counsel however, submitted that even now the authorities can verify the necessary records which are audited and submitted to the authorities and find out whether the material was used in its own undertaking or not. We do not think we can accede to this contention. Having failed to file the necessary declaration, he cannot now turn around and ask the authorities to make a verification of some records. The verification at the time when the raw material was still there is entirely different from a verification at a belated stage after it has ceased to be there. May be that the raw-material was used in the industrial undertaking as claimed by the petitioner Company or it may not be. In any event the failure to file the necessary declaration has necessarily prevented the authorities to have a proper verification".
Again the Hon'ble Court held in paras 6, 7, and 8 as follows :
"6. The expressions "rebate" and "concession" in the commercial parlance have the same concept. In Halsbury's Laws of England, 4th Edn. Para 198 it is observed as under:
"Application for rebate : When a rating authority receives an application for a rebate it has a duty to determine whether the residential occupier is entitled to a rebate and, if so, the amount to which he is entitled; and it must request him in writing to furnish such information and evidence as it may reasonably require as to the persons who reside in the hereditament, his income, and the income of his spouse. Unless the rating authority is satisfied that the residential occupier has furnished all the information and evidence it requires, it is under no duty to grant a rebate".
(emphasis supplied)
7. In Kedarnath Jute Manufacturing Co. v. Commercial Tax Officer, Calcutta and Ors., the appellant which was a Public Limited Company, sought exemption under the provisions of the Bengal Finance (Sales Tax) Act, 1941 in respect of certain sales but did not produce before the Officer the declaration forms from the purchaser dealers required to be produced under the proviso to that sub-clause granting exemption. It was contended on behalf of the appellant that proviso to the sub-clause was only directory and the dealer is not precluded where the proviso is not strictly complied with from producing other relevant evidence to prove that the sales were for the purposes mentioned in the said sub-clause. The contention on behalf of the respondent was that the dealer can claim exemption under the sub-clause but he must comply strictly with the conditions under which the exemption can be granted. Rejecting the appellant's contention, this Court held thus :
"Section 5(2)(a)(ii) of the Act in effect exempts a specified turnover of a dealer from sales tax. The provision prescribing the exemption shall, therefore, be strictly construed. The substantive clause gives the exemption and the proviso qualifies the substantive clause. In effect the proviso says that part of the turnover of the selling dealer covered by the terms of Sub-clause (ii) will be exempted provided a declaration in the form prescribed is furnished. To put it in other words, a dealer cannot get the exemption unless he furnishes the declaration in the prescribed form"."
It was further held as under :
"There is an understandable reason for the stringency of the provisions. The object of Section 5(2)(a)(ii) of the Act and the rules made thereunder is self-evident. While they are obviously intended to give exemption to a dealer in respect of sales to registered dealers of specified classes of goods, it seeks also to prevent fraud and collusion in an attempt to evade tax. In the nature of things, in view of innumerable transactions that may be entered into between dealers, it will wellneigh to impossible for the taxing authorities to ascertain in each case whether a dealer has sold the specified goods to another for the purposes mentioned in the section. Therefore, presumably to achieve the twofold object, namely, prevention of fraud and facilitating administrative efficiency, the exemption given is made subject to a condition that the person claiming the exemption shall furnish a declaration form in the manner prescribed under the Section. The liberal construction suggested will facilitate the commission of fraud and introduce administrative inconvenience, both of which the provisions of the said clause seek to avoid".
It can thus be seen that the submission namely that the dealer, even without filing a declaration, can later prove his case by producing other evidence, is also rejected. This ratio applies on all fours to the case before us. As already mentioned the concession can be granted only if the raw material is used in the industrial undertaking seeking such concession. For that a verification was necessary and that is why in the rule itself it is mentioned that a declaration has to be filed in Form 14 facilitating verification. Failure to file the same would automatically disentitle the Company from claiming any such concession.
8. In any event the petitioner Company cannot claim concession at this distance as a matter of right. In Orissa Cement Ltd. v. State of Orissa and Ors. it was observed thus:
"We are inclined to accept the view urged on behalf of the State that a finding regarding the invalidity of a levy need not automatically result in a direction for a refund of all collections thereof made earlier. The declaration regarding the invalidity of a provision and the determination of the relief that should be granted in consequence thereof are two different things and, in the latter sphere, the Court has, and must be held to have, a certain amount of discretion. It is well-settled proposition that it is open to the Court to grant, mould or restrict the relief in a manner most appropriate to the situation before it in such a way as to advance the interests of justice".
In the instant case the octroi duty paid by the Petitioner Company would naturally have been passed on to the consumers. Therefore, there is no justification to claim the same at this distance of time and the Court in its discretion can reject the same. For the above reasons, this special Leave Petition is dismissed with costs."
It follows from this ruling that the non-following of any condition precedent, even if it is procedural conditions, it cannot be condoned. This ruling is applicable to the facts of the case in all fours. Respectfully following the ratio of the Hon'ble Supreme Court, all the appeals are dismissed.
Dated: 1-9-1993 Sd/-
(S.L. Peeran)
Member (J)
P.C. Jain, Member (T)
12. I have carefully gone through the order proposed by the learned brother but I regret I am unable to agree with his conclusions.
13. Relevant extract of Notification No. 162/86 has already been set out at para 6 in the learned brother's order. Revenue contends that condition No. (i) in Col. 5 of the Table to the said Notification 162/86 necessarily implies that the concession can be obtained only at the time of clearance inasmuch as an officer not below the rank of Assistant Collector is required to be satisfied that such saloon cars are required for use solely as taxies. Revenue further contends that this condition No. (i) is a pre-requisite to availment of the benefit of the said notification. Unless this satisfaction is acquired by the Asstt. Collector or any superior officer, benefit of the said notification cannot be extended. The adjudicating authority has further held that the wording of the said condition No. (i) further necessarily implies that this satisfaction is to be acquired by the Asstt. Collector at the time of clearance of the saloon cars that these are required for use solely as taxies. Such a satisfaction according to the adjudicating authority cannot be acquired later. This contention has been upheld by the learned brother, Shri S.L. Peeran.
13.1 Learned Advocate for the appellants, however, contends that the condition (i) does not lay down that the satisfaction of the Assistant Collector is to be acquired at the time of clearance. Revenue by its interpretation intends to add the words 'at the time of clearance' in the said notification which is not permissible in view of the settled principles of construction of statutes. The learned advocate for the appellants has submitted that this condition is applicable only if the goods i.e. saloon cars are cleared at a concessional rate of duty. In the instant cases, he submits that the appellants had been clearing the goods at a higher rate of duty applicable to saloon cars and later on claiming the refund of duty on production of registration certificates of the Transport Authorities showing that the vehicles in respect of which refund claim is made have been registered as taxies and are, therefore, used solely as taxies. All these refund claims, he further submits are filed within the limitation stipulated in Section 11B of the CESA, 1944. Refunds for the past periods had been granted by the proper authorities on claims so made by the appellants. In this connection, he has invited attention to three such refunds given by the Assistant Collector's letters dated 13-8-1990,1-8-1990 and 2-8-1990 (available at pages 17, 18 and 19 of the Paper Book) produced by the appellants. He, therefore, further submits that the Revenue by its conduct had sanctified the procedure of claiming the refund on saloon cars registered and used as taxies, produced subsequent to their clearance. He, therefore, submits that this sudden change in procedure caused by Superintendent's letter dated 20-11-1991 should only be made applicable prospectively and not in respect of cars which have been cleared prior to receipt of the said letter by the appellants.
14. I have carefully considered the pleas advanced on both sides. Reliance is placed by the learned SDR for his contention that condition No. (i) is a condition precedent for availing the benefit of Notification 162/86 on Supreme Court's judgment in the case of Indian Aluminium Company Limited, mentioned supra which has been concurred in by the learned brother. I am, however, of the view that every condition in a notification is not of substantive or mandatory character. Whether a condition is substantive and mandatory or whether it is merely procedural, will have to be determined from the purpose of the statute i.e. Notification 162/86 here. In this connection, I rely on Supreme Court's judgment in the case of Mangalore Chemicals & Fertilizers Ltd. v. Deputy Commissioner 1991 (55) E.L.T. 437. The Apex Court in para 11 of the said Report has observed as follows :-
"Its stringency and mandatory nature must be justified by the purpose intended to be served. The mere fact that it is statutory does not matter one way or the other. There are conditions and conditions. Some may be substantive, mandatory and based on consideration of policy and some others may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve.
(Emphasis supplied)"
14.1 It is apparent from the said notification that the purpose of concessional rate of duty is to the saloon cars which are used solely for the purpose of taxies. This condition is contained in condition (ii). Condition No. (i) in my view is only of a procedural nature for the purpose of ensuring that no saloon car is cleared at a lower rate of duty merely by a declaration of the assessee that it is to be used solely for the purposes of taxies. The Assistant Collector is required to satisfy himself, on such material as may be in his possession, that the saloon cars declared to be cleared at the lower rate of duty for the purpose of sole use as a taxi is actually required for that purpose. Condition No. (i), therefore, is applicable only in cases where lower rate of duty is initially claimed in terms of the said notification. Condition No. (i) to my mind is not really relevant in cases where higher rate of duty is paid at the time of clearance of the cars but a refund is later claimed on production of certificates as mentioned in condition No. (ii).
14.2 It is by now well settled position that benefit of exemption notification need not be claimed at the time of assessment. Benefit of a notification can be claimed even subsequently by way of filing a refund claim even if classification list has been got approved at a higher rate, or assessment of the goods has also been made at a higher rate in terms of the said classification list. This is so because Section 11B under which a claim for refund is made is an independent provision. Its effect and scope cannot be whittled down merely because an exemption notification has not been availed of at the time of clearance of the goods. This has been clearly held by the Tribunal in (i) 1991 (52) E.L.T. 600 (Tribunal) and (ii) 1990 (47) E.L.T. 687 (Tribunal). This is also the ratio of the Tribunal's decision reported in (i) 1983 (14) E.L.T. 2076 and (ii) 1983 (14) E.L.T. 2407. It was also held so by Madras High Court in the case of L.M. Ven Moppes Diamond Tools (I) Ltd. v. GOI 1981 (8) E.L.T. 165. Similar is the ratio of Calcutta High Court's judgment in the case of ITC 1988 (34) E.L.T. 473 Para 18 14.2A Reliance placed by the learned SDR on Supreme Court's judgment in the case of Indian Aluminium, mentioned supra, can be said to be limited to its own facts inasmuch as the Court held that the condition of the notification therein was a condition precedent for availing the benefit of the provisions of the notification. In other words, the condition was held by the Court to be of a mandatory character and hence the contention of the appellants, Indian Aluminium that the end use of the goods to be verified from their records was not held to be tenable because in the Court's view it would lead to frauds. In the instant case, as already stated, purpose of the notification is to grant concessional rate of duty to cars used as taxies. This purpose is achieved by production of registration certificates of Transport authorities which is spelt in condition No. (ii). That condition is satisfied. Accordingly, I reject the contention of the Revenue and set aside the impugned order.
14.2B It was a common ground of both sides that even if the appellants succeed on the main point, as aforesaid, the appeal Nos. referred to in para 1 at SI. Nos. (2) to (9) in the impugned order will go back to the original authority for determining other issues and the quantum of refund. I order accordingly.
15-9-1993 Sd/-
(P.C. Jain)
Member (T)
15. A point of difference has arisen between the two Members which is as under :-
"Whether in the facts and circumstances of this case benefit of Notification No. 162/86 be extended to the appellants by way of refund claims submitted after clearance of the saloon cars at a higher rate of duty".
Sd/- Sd/-
(P.C. Jain) (S.L. Peeran)
Member (T) Member (J)
ORDER
K.S. Venkataramani, Member (T) and P.C Jain, Member (T)
16. Arguing on the point of difference, the ld. Counsel, Shri V. Sridharan, submitted that the appellants herein had submitted classification list in 1990 claiming exemption under Notification 162/82 and in this connection, the jurisdictional Superintendent had written to them on 27-4-1990, after discussions with the appellants in a meeting of Additional Collector, Faridabad then the Assistant Collector, Gurgaon and the Superintendent had in that letter directed them to pay them rate of duty at 40% and afterwards had submitted proof of registration for taxi that the appellants may claim refund of the excess duty paid. They had written to the Assistant Collector on 3-5-1990 wherein they had stated that for direct taxi sale, the appellants had been collecting additional 5% as security amount to be released to the customers on submission of proof of registration as taxi. Some of the customers submitted the proof and the appellants sought permission from the Assistant Collector to release the security amount to the customers. The Assistant Collector also replied to them on 26-2-1991 stating that he has accepted the proof of registration in respect of certain vehicles specified in the letter. Subsequently, they had submitted refund applications which had been sanctioned. The ld. Counsel submitted that the Superintendent's letter to them on 20-11-1991 changed the procedure which had been agreed and permitted by the department in this regard of availing of exemption under Notification 162/82. The ld. Counsel argued that it is well settled in such case of changing the procedure and the past practice, the changes in the procedure should be applied only prospectively. The ld. Counsel also pleaded that the new procedure laid down in the Superintendent's letter prescribed certain formalities which are incapable of being complied with in respect of past clearances. The ld. Counsel referred to the grounds of appeal and emphasised that the notification is to be taken to say that condition (i) in the Notification has to be satisfied at the time of clearance and condition (ii) will be satisfied subsequently within the period stipulated by furnishing the Registration Certificate issued by the State Transport Authority. On the other hand if no concession is availed of and the vehicles are cleared at a normal rate of duty i.e. at the higher rate of duty, then the satisfaction of the Assistant Collector envisaged in condition (i) gets shifted to condition (ii) is to be fulfilled. The ld. Counsel contended that there is nothing in the notification to say that the condition (i) is to be satisfied at the time of clearance. The ld. Counsel, on the other hand, referred to certain Notifications - 263/87 and 212/87 as examples where the notifications stipulate in so many words that the conditions are to be satisfied at the time of clearances. No such wording is there in Notification 162/86. It was also contended that even where the notifications stipulate fulfilment of condition at the time of clearances, it has been held by the Tribunal that the benefit of notification can be claimed through refund claim under Section 11B Central Excises & Salt Act citing the case law reported in 1992 (39) E.C.R. 117 of the Tribunal in the case of Collector of Central Excise v. Flouride Industries. The Ld. Counsel also relied upon the Tribunal's decision in the case of Collector of Central Excise v. I.T.C. Ltd. -1993 (67) E.L.T. 852 wherein the Tribunal held that exemption, is not to be denied merely because benefit of notification is not claimed at the time of clearance, but is claimed by way of refund subsequently. The ld. Counsel, further, submitted that the Government of India has since amended the notification by issuing of Notification 64/93 for the purpose of concessional rate of duty for cars cleared for use as taxis. According to this notification, the condition that in a case where saloon cars, after clearance have been registered for use solely as taxis, the manufacturer will be entitled to an exemption subject to the condition, viz. (i) the manufacturer at the time clearance paid duty at the higher rate; (ii) the manufacturer furnishes to me Assistant Collector a Certificate from the State Transport Authority that the saloon cars have been registered for use as taxies within three months from the date of clearance; (iii) the manufacturer had not collected from the person in whose name the car have been registered as a taxi or in a case it collected and has refunded to such person, the amount equivalent of such further exemption of duty; and (iv) simultaneously, files a claim for refund of duty in terms of Section 11B Central Excises & Salt Act, 1944. The above notification and conditions, therein, would support the procedure followed by the appellants and their interpretation of the notification, as now pleaded by the ld. Counsel, citing a case law reported in AIR 1966 S.C. 1995 in the case of State of Bihar v. S.K. Roy that subsequent legislation can be looked into where earlier act is ambiguous or capable of more than one interpretation. The ld. Counsel, further, pointed out that in respect of an earlier Notification 141/75, which was identically worded exempting motor cars under Item 34(2) CET, there has been identically worded condition in the notification. Interpretating this notification in a decision in Revision Application, the Govt. of India had held that satisfaction of Assistant Collector for fulfilment of condition of the notification can be either before or after the clearance 1982 (10) E.L.T. 530 (A). Such an interpretation can be a useful guide, as has been held by the Supreme Court in the case of Andhra Sugars v. Union of India -1988 (38) E.L.T. 564. The ld. Counsel, further, pleaded that the appellants' case differs factually and is distinguishable from the facts of the Supreme Court decision in the case of Indian Aluminium Co. Ltd. v. Thane Municipality -1991 (55) E.L.T. 454. The case is distinguishable because the appellants, herein, had not come up with a refund claim belatedly and almost as an after thought. On the other hand, the appellants had claimed the exemption in the classification list and had followed the procedure which has been agreed to and laid down by the department itself. It was, further, pleaded by the ld. Counsel that the fact as to how the Assistant Collector satisfies himself, will fall within the domain of the Assistant Collector and in this case the Assistant Collector has prescribed certain procedures which was followed in the past. The ld. Counsel, further, pointed out that it is not the case of the department that Assistant Collector's satisfaction has been arrived at erroneously without material basis, but the department's case is only based on general proposition that under the notification, there cannot be any subsequent refund claim. The ld. Counsel, further, contended that there it cannot also be argued that there was a possibility of fraud because where the higher rate of duty is paid at the time of clearance and a refund claim for excess duty is filed subsequently, the possibility of fraud is obviated.
17. Shri B.K. Singh, ld. S.D.R., submitted that if the appellants' interpretation of condition (i) of the notification is agreed, then it will make that condition in the notification otiose. It was argued that on the other hand, both the conditions have to be satisfied. The conjunctive 'and' links both the conditions in the notification. They had to be simultaneously satisfied. The condition is designed as a safeguard to check possibilities of fraud and in this context, the Supreme Court decision in the case of Indian Aluminium (supra) is of relevance as has been brought out in the order of the hon'ble Member (Judicial). The ld. S.D.R. relied upon the case law reported in 1988 (38) E.L.T. 23 (Bom.) in the case of Indian Lead Private Limited v. Union of India and submitted that words employed in the notification have to be given due weight and there is no ground for looking to the intention which also need not be gone into if the words of the notification is plain and clear. In the present case, the condition (i) of the notification is that the Assistant Collector should be satisfied that the cars are required for use solely as taxis. If the Assistant Collector, at the time of clearance, is not so satisfied condition (i) is not fulfilled. Even the appellants themselves are not knowing about it at the time of clearance much less the Assistant Collector. Further, the reference of time limit in condition (ii) with reference to the date of clearance makes it obvious that the condition (i) at the time of clearance has to be satisfied. The ld. S.D.R. also relied upon the case law reported in 1986 (24) E.L.T. 273 in the case of M.R.F. v. Collector of Central Excise that exemption notification is not to be interpreted in the light of Government of India order in Revision Application.
18. The submissions made have been carefully considered. The question is whether the appellants can be given the benefit of the exemption notification for lower rate of duty under Notification 162/86 for saloon cars cleared and used solely as taxis. The Notification has been extracted above, In determining whether the conditions (i) & (ii) thereof have to be necessarily and simultaneously be satisfied for the exemption to be granted, it is found that there is a decision of the Government of India in the case of Hindustan Motors under Notification 141/75 reported in 1982 (10) E.L.T. 530(A). This notification reads as follows :-
"NOTIFICATION No. 141/75 dated 23-5-1975 -
"In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts motor cars falling under sub-item (2) of Item No. 34 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) from so much of the duty of excise leviable thereon as is in excess of ten per cent ad valorem, subject to the following conditions that -
(a) an officer not below the rank of an Assistant Collector of Central Excise (hereinafter referred to as the said officer) is satisfied that such motor cars are required for use solely as taxis; &
(b) the manufacturer furnished to the said officer a certificate from an officer authorised by the concerned State Transport Authority in this behalf within three months of the date of clearance of the motor car by the manufacturer after payment of duty of such extended period as the said officer may allow, to the effect that each such motor car has been registered for use solely as a taxi."
19. It may be seen that the conditions are identically worded. In the Hindustan Motors case (supra) interpreting the condition in the notification, the Govt. of India observed as follows :-
"They observe that the provisions of Notification No. 141/75, dated 23-5-1975 do not indicate the matter of exemption and satisfaction of intended use at the time of clearance. According to this notification the Assistant Collector's satisfaction can be before or after clearance of the goods and depends only on the fact that the cars are required for use solely as taxis. In this case the cars were cleared on payment of duty at a higher rate but subsequently at the time of first registration those were taken to be taxis. In the circumstances, Government allow the revision application and order consequential relief."
20. Such an interpretation can be adopted as a useful guide as has been spelt out in the case of Collector of Central Excise, Guntur v. Andhra Sugar Ltd. -1988 (38) E.L.T. 564. There also reliance was placed by the petitioner on a decision in Revision Application by the Govt. of India. The Supreme Court noted two orders in Revision by the Government on the issue and observed as follows:
"It is well settled that the meaning ascribed by the authority issuing the Notification, is a good guide of a contemporaneous exposition of the position of law. Reference may be made to the observations of this Court in K.P. Verghese v. The Income Tax Officer, Ernakulam (1982 (1) SCR 629), it is a well settled principle of interpretation that courts in construing a Statute will give much weight to the interpretation put upon it at the time of its enactment and since, by those whose duty has been to construe, execute and apply the same enactment.
21. As can be seen from the above, the Government of India's interpretation of a previous notification issued for the same purpose and that identically worded conditions is available wherein the Govt. of India had taken the view that according to the notification, the Assistant Collector's satisfaction can be before or after clearance of the goods and has observed that it depends only on the facts that the cars are required for use solely as taxis. Since the views expressed by the Govt. of India have to be given due consideration, it will follow that in this case also the past practice followed by the department itself in the case of the appellants by granting them refund on the basis of scrutiny of the evidence produced at the time of refund by the Assistant Collector, would be in accordance with the object of the exemption. The exemption Notification 64/94 issued by the Govt. of India for the same purpose and the conditions stipulated therein which spell out that the benefit of lower rate of duty is to be given subsequent to clearance by way of refund claim would also go to support the appellants contentions. In such a view of the matter, the reliance placed upon by the Member (Technical) on the Supreme Court decision in the case of Mangalore Chemicals and Fertilizers (supra) in order to determine the nature of the condition in the notification would find support. In the result, the point of difference is answered by holding that in the facts and circumstances of the case, benefit of Notification 162/86 can be extended to the appellants by way of refund claim submitted after the clearance of the saloon cars at a higher rate of duty.
Sd/-
(K.S. Venkataramani)
Dated : 27-4-1994 Member (T)
ORDER
S.L. Peeran, Member (J)
22. In view of the majority opinion, the appellants are entitled to the benefit of the Notification No. 162/86, even by way of refund claims submitted after clearance of the saloon cars, at a higher rate of duty. We, therefore, set aside the impugned orders and remand the case to the original authority i.e. Assistant Collector, who should examine the claims having regard to the findings in this order and the other conditions of the notification.
23. Thus, all these appeals are allowed by remand.