Customs, Excise and Gold Tribunal - Tamil Nadu
Cce, Coimbatore vs Golden Dew Tea Factory [Alongwith ... on 29 November, 2006
Equivalent citations: 2006(112)ECC157, 2006ECR157(TRI.-CHENNAI)
ORDER P.G. Chacko, Member (J)
1. The respondents in the appeals filed by the Department and the appellants in the remaining appeals are engaged in the manufacture of tea falling under SH 0902.00 of the CETA Schedule. They had availed the benefit of full exemption from payment of Basic Excise Duty on the product under Notification No. 41/99-CE dated 26.11.99 for the period from 10th December 1999 to 31.3.2000. Most of them had done so by complying with all the relevant conditions including filing of undertaking with the jurisdictional Assistant Commissioner/ Deputy Commissioner of Central Excise. For the next financial year [2000 - 2001], similar undertakings of these parties required under the Notification were received belatedly by the jurisdictional Assistant Commissioner/Deputy Commissioner. In the case of the respondents in the department's appeals at Sl. No. 1 to 12, these undertakings were received by the Assistant Commissioner/Deputy Commissioner on the dates mentioned in the following table:
S.No. Appeal No. Date of receipt of undertaking by AC/DC Period for which demand of duty raised in SCN and dropped in impugned order
01.
E/1185/2001 5.6.2000 1.4.2000-4.6.2000
02. E/22/2002 4.4.2000 1.4.2000-3.4.2000
03. E/23/2002 10.4.2000 1.4.2000-9.4.2000
04. E/24/2002 4.4.2000 1.4.2000-3.4.2000
05. E/25/2002 4.4.2000 1.4.2000-3.4.2000
06. E/26/2002 28.6.2000 1.4.2000-27.6.2000
07. E/56/2003 3.4.2000 1.4.2000-2.4.2000
08. E/57/2003 7.4.2000 1.4.2000-6.4.2000
09. E/58/2003 7.4.2000 1.4.2000-6.4.2000
10. E/59/2003 19.10.2000 11.9.2000-18.10.2000
11. E/60/2003 6.4.2000 1.4.2000-5.4.2000
12. E/1179/2001 11.4.2000 1.4.2000-11.4.2000 In the case of the appellants in the remaining appeals, the written undertakings were received by the jurisdictional Assistant Commissioner/Deputy Commissioner on the dates mentioned in the following table:
S.No. Appeal No. Date of Receipt of undertaking by AC/DC Period for which duty demanded in impugned order
01.
E/410/03 16.6.2000 1.4.2000-15.6.2000
02. E/490/03 16.12.2000 28.6.2000 10.12.99-31.3.2000 1.4.2000-27.6.2000
03. E/579/03 13.12.1999 10.12.99-12.12.1999
04. E/580/03 1.5.2000 1.4.2000-30.4.2000
05. E/581/03 21.6.2000 1.4.2000-20.6.2000
06. E/582/03 30.6.2000 1.4.2000-29.6.2000
07. E/583/03 18.6.2000 1.4.2000-17.6.2000
08. E/584/03 28.6.2000 1.4.2000-27.6.2000
09. E/585/03 5.6.2000 1.4.2000-4.6.2000
10. E/604/03 30.5.2000 1.4.2000-29.5.2000
11. E/605/03 5.6.2000 1.4.2000-4.6.2000
12. E/609/03 16.6.2000 1.4.2000-15.6.2000
13. E/619/03 14.6.2000 1.4.2000-13.6.2000
14. E/620/03 5.6.2000 1.4.2000-4.6.2000
15. E/40/2005 22.10.2001 1.4.2001-21.10.2001
16. E/1460/04 21.6.2000 1.4.2000 - 20.6.2000 In the orders impugned in the Department's appeals, learned Commissioner (Appeals) held that, as the assessees had filed undertakings for the previous year and had satisfied what was found to be "substantive conditions" for the relevant financial year [2000 -2001] viz. conditions relating to purchase of green leaf from growers, minimum period of working of factory in the previous year and filing of statement of accounts, the benefit of the Notification was not to be denied to them for any part of the relevant financial year [2000 - 01] on the ground of delay in the filing of undertaking for such financial year. The appellate authority considered such delay as a "procedural lapse" not affecting the claim of the assessee for exemption from payment of duty on the tea removed from their factories from 1.4.2000 till the dates of filing of undertakings.
On the other hand, in the orders impugned in the assessees' appeals, the appellate authority took the view that the filing of undertaking for each financial year was a pre-requisite for availing exemption under Notification No. 41/99-CE and that, even if all other conditions of the Notification were satisfied, the benefit would not be available to the assessees for the period prior to the date of filing of undertaking. Accordingly, learned Commissioner (Appeals) denied the benefit of exemption under the Notification to the assessees for the respective periods. The orders of the original authority dropping demands of duty were set aside and penalties were also imposed on the assessees.
2. The main issue arising in all these appeals is whether the benefit of exemption under Notification No. 41/99-CE dated 26.11.99 will commence only from the date of receipt of undertaking by the AC/DC of Central Excise or whether it also covers the period prior to the said date in respect of tea cleared by a factory belonging to a cooperative society or by a bought-leaf factory during any financial year subsequent to 1999 - 2000. In two appeals [E/490/2003 and E/579/2003], a similar issue arises in respect of tea cleared from factory during a part of the financial year 1999 - 2000 viz. 10.12.99 to 31.3.2000 and 10.12.99 to 12.12.99 respectively. In yet another appeal [E/40/2005], the issue pertains to the financial year 2001-02. Any decision on these issues would call for a correct understanding of the provisions of the above Notification.
3. Notification No. 41/99-CE reads as under:
In exercise of the powers conferred by Sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description specified in column (2) of the Table below falling under sub-heading No. 0902.00 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) from the whole of the duty of excise leviable thereon under Section 3 of the Central Excise Act, 1944 (1 of 1944), subject to the conditions specified in the corresponding entry in column (3) of the said Table.
TABLE S. No. Description of Goods Condition (1) (2) (3) I. Tea cleared by a factory belonging to a cooperative society during the period on and from 10th December, 1999 to 31st March, 2000.
(a) The benefit of exemption, from duty will commence from the date of the undertaking with the Assistant Commissioner/Deputy Commissioner of Central Excise as specified in condition (b):
(b) The manufacturer files an undertaking that:
(i) the green leaf used by the factory during the period on and from 10th December, 1999 to 31st March, 2000 shall not be purchased from any grower who has a holding exceeding ten hectares under tea cultivation.
(ii) The co-operative society owning the factory is registered with the Registrar of Cooperative Societies in the concerned State Government.
(iii) No member of the co-operative society owns a holding exceeding ten hectares under tea cultivation.
(c) In the first week of April, 2000, the manufacturer shall submit a statement of accounts, in a format to be prescribed by the jurisdictional Commissioner of Central Excise, as proof of having fulfilled the undertaking.
(d) In the event of his failure to satisfy the undertaking, the manufacturer shall be liable to pay duty of excise specified in the Firs;
Schedule to the said Central Excise Tariff Act for the period referred to in condition (b).
II Tea cleared by a factory belonging to a cooperative society during any financial year subsequent to 1999-2000.
(a) The benefit of exemption from duty will commence from the date of the undertaking with the Assistant Commissioner/Deputy Commissioner of Central Excise as specified in condition (b):
(b) The manufacturer files an undertaking that:
(i) the green leaf used by the factory during the period, from the date of the aforesaid undertaking till the end of the financial year. shall not be purchased from any grower who has a holding exceeding ten hectares under tea cultivation
(ii) The co-operative society owning the factory is registered with the Registrar of Cooperative Societies in the concerned State Government.
(iii) No member of the co-operative society owns a holding exceeding ton Hectares under tea cultivation.
(c) In the first week of each succeeding financial year, the manufacturer shall submit a statement of accounts, in a format to be prescribed by the jurisdictional Commissioner of Central Excise, as proof of having fulfilled the undertaking.
(d) In the event of his failure to satisfy the undertaking, the manufacturer shall be liable to pay duty of excise specified in the First Schedule to the said Central Excise Tariff Act for the period referred to in condition (b).
III.
Tea cleared by a bought leaf factory during the period on and from 10th December, 1999 to 31st March, 2000.
(a) The benefit of exemption from duty will commence from the dale of the undertaking with the Assistant Commissioner/Deputy Commissioner of Central Excise as specified in condition (b):
(b) The manufacturer files an undertaking that:
(i) not less than two-thirds of the green leaf used by the factory during the period on and from 10th December, 1999 to 31st March, 2000 shall be purchased from growers, each having a holding not exceeding ten hectares under tea cultivation.
(ii) The factory has been working for at least six months during 1998-99.
(c) In the first week of April, 2000, the manufacturer shall submit a statement of accounts, in a format to be prescribed by the jurisdictional Commissioner of Central Excise, as proof of having fulfilled the undertaking.
(d) In the event of his failure to satisfy the undertaking, the manufacturer shall be liable to pay duty of excise specified in the First Schedule to the said Central Excise Tariff Act for the period referred to in condition (b).
IV.
Tea cleared by a bought leaf factory during any financial year subsequent to 1999-2000.
(a) The benefit of exemption from duty will commence from the date of the undertaking with the Assistant Commissioner/Deputy Commissioner of Central Excise as specified in condition (b):
(b) The manufacturer files an undertaking that
(i) not less than two-thirds of the green leaf used by the factory, during the period from the date of the aforesaid undertaking till the end of the financial year, shall be purchased from growers, each having holding not exceeding ten hectares under tea cultivation.
(ii) The factory has been working for at least six months during the year preceding the year in which the undertaking referred to in condition (b) is filed.
(c) In the first week of April of each succeeding financial year the manufacturer shall submit a statement of accounts, in a format to be prescribed by the jurisdictional Commissioner of Central Excise, as proof of having fulfilled the undertaking.
(d) In the event of his failure to satisfy the undertaking, the manufacturer shall be liable to pay duty of excise specified in the First Schedule to the said Central Excise Tariff Act for the period referred to in condition (b).
2. This notification shall come into effect from the 10th December. 1999.
Explanation. - For the purposes of this notification, "bought leaf factory" means a factory which purchases not less than two-thirds of the green leaf processed by it in the preceding financial year from any grower who has a holding not exceeding ten hectares of land under cultivation of tea.
[emphasis supplied]
4. Some of the factories involved in these cases belong to cooperative societies and the conditions mentioned against Sl. No. I of the TABLE annexed to the Notification are relevant to these factories in respect of tea cleared from 10.12.99 to 31.3.2000. In respect of tea cleared by these factories during any financial year subsequent to 1999 - 2000, the applicable conditions are those mentioned against Sl. No. II of the said TABLE. Other factories involved in these cases (bought-leaf factories) would attract the conditions mentioned against Sl. No. III in respect of tea cleared by them from 10.12.99 to 31.3.2000 and those mentioned against Sl. No. IV in respect of clearances effected during any financial year subsequent to 1999 - 2000. The dispute between the department and the assessees is on account of different interpretations of condition (a) given against Sl. No. I / II / III / IV in the TABLE annexed to the Notification. This condition is identically worded in respect of factories belonging to cooperative societies and bought-leaf factories as also in respect of the period 10.12.99 to 31.3.2000 and any financial year subsequent thereto. It reads thus:
The benefit of exemption from duty will commence from the date of the undertaking with the Assistant Commissioner/Deputy Commissioner of Central Excise as specified in condition (b):
M/s. Meedhane Tea Industries cleared tea from their factory without payment of duty during 10.12.99 to 31.3.2000 without filing any undertaking with the AC/DC. This undertaking was filed only on 16.12.2000. The party admitted the lapse and requested the lower authorities to condone the same and grant them the benefit of the Notification for the said period. For the next financial year also, their undertaking was filed only on 28.6.2000, but they had effected clearances of tea without payment of duty upto 27.6.2000. M/s. Kundah Industrial Cooperative Tea Factory Ltd. filed their undertaking only on 13.12.99 for the period from 10.12.99 to 31.3.2000, but they cleared tea without payment of duty during the said period. M/s. Harsha Tea (I) Ltd. filed their undertaking for the financial year 2001 - 02 only on 22.10.2001. In these cases, the department demanded duty on tea cleared by the parties during the periods, 10.12.99 - 31.3.2000, 1.4.2000 - 27.6.2000, 10.12.99 -12.12.99 or 1.4.2001 to 21.10.2001, as the case may be. In all other cases, the assessees were required to pay duty on the tea cleared by them from 1.4.2000 to the date preceding the date of filing of undertaking. While the appellate orders impugned in the Revenue's appeals allowed the benefit of the Notification to the assessees, those impugned in the assessees' appeals denied the benefit.
5. We have heard learned SDR for the Revenue and the authorized representatives of the assessees. S/Shri M. Saravanan (Consultant) and B.G. Bhaskar (Advocate) led the arguments for assessees.
6. Both sides have endeavoured to interpret condition (a) in their own ways. According to learned SDR, there is no scope for doubt or ambiguity with regard to the meaning of this condition inasmuch as it expressly states that the benefit of exemption from duty will commence from the date of undertaking with the AC/DC of Central Excise. The "date of the undertaking with the AC/DC" means the date on which the undertaking is received by the AC/DC. On the other hand, learned consultant for M/s. Golden Dew Tea Factory has argued that the date of undertaking is the date on which the undertaking is sent and cannot be the date on which it is received by the AC/DC. While learned SDR has relied on the Tribunal's decision in Malanad Cooperative Tea Factory v. CC, Cochin 2005 (186) ELT 222 (Tri. Bang.), learned Consultant has claimed support from the Tribunal's decision in Red Land Tea Factory v. CC, Cochin .
7. It was argued by learned SDR that condition (a) was a substantive condition to be satisfied by tea manufacturers claming the benefit of exemption from payment of duty on their products for the relevant period. It was mandatory rather than procedural. According to her, conditions (a) & (b) should be read together for gathering the legislative intent behind condition (a). It was submitted by learned Counsel/consultants for the assessees that filing of undertaking with the AC/DC was only a procedural requirement and that any delay in this matter was only a condonable lapse. Both sides cited case law in support of their respective positions. While Smt. Bhagya Devi relied on the Supreme Court's judgment in Eagle Flask Industries Ltd. v. CCE , Shri Saravanan placed reliance on the following decisions:
(i) Mangalore Chemicals & Fertilizers Ltd. v. Deputy Commissioner 1991 (55) RLT 437 (SC)
(ii) Keshari Wire Products (P) Ltd. v. CCE
(iii) CC v. Koshy's Electronics Ltd. 2005 (68) RLT 777 (CESTAT - Chennai)
(iv) Bombay Processors v. CCE, Mumbai 2005 - TIOL-282-CESTAT-MUM.
It was submitted by the learned consultant that the substantive conditions for claiming the benefit of the Notification were those mentioned at (b) in the 3rd column of the TABLE annexed to the Notification and admittedly these conditions had been satisfied by the assessees. Therefore the benefit of the Notification should not be denied to them on the ground of delay in the filing of undertaking with AC/DC. It was in the context of distinguishing condition (a) and condition (b) as procedural and substantive that reliance was placed on the apex court's judgment in Mangalore Chemicals & Fertilizers (supra).
8. According to learned Counsel representing M/s. Amko Tea (P) Ltd. if the notification was read as a whole, it would appear that the undertaking filed in December 1999 would operate for the next financial year [2000 -01] also. He argued that tea manufacturers who were not able to claim the benefit of exemption under Sl. No. III of the TABLE annexed to the Notification had a chance to claim the benefit under Sl. No. IV of the said TABLE. It was argued that the Notification intended to benefit farmers (tea-growers) and therefore its provisions were to be interpreted in a manner beneficial to them. In this connection, reliance was placed on the judgment of the Supreme Court in the case of Johnson and Johnson Ltd. v. CCE, Aurangabad . According to learned Counsel, upon a reasonable interpretation of the conditions of the Notification, the exemption claimed by the assessees would be admissible to them. In this connection, reliance was placed on H.M.M. Ltd. v. CCE, New Delhi . Counsel also argued that the requirement of filing undertaking with AC/DC by tea manufacturers claiming the benefit of Notification 41/99-CE for any financial year subsequent to 1999-2000 was only directory. In this connection, he claimed support from the apex court's judgment in State of Orissa v. M.A. Tulloch & Co. Ltd. .
9. SDR also held the assessees liable to be penalized under Rule 173Q for having removed dutiable goods without payment of duty. Counsel and Consultants contested the claim by submitting that no mens rea was brought out by the Revenue against the assessees.
10. Shri Saravanan also raised the plea of limitation against the relevant show-cause notices. It was pointed out that, during the periods of dispute, the limitation for demanding duty under Section 11A(1) of the Central Excise Act was six months and that the show-cause notices were issued beyond six months from the relevant dates. It was claimed that any such show-cause notice issued after six months from the date of expiry of period of dispute was time-barred. It was also pointed out that, in none of the show-cause notices, there was any allegation for invoking the extended period of limitation. Opposing this plea, learned SDR submitted that, as the relevant show-cause notices were issued within the period of limitation (one year) prescribed under Section 11A(1) as this provision (as amended) stood on the dates of issue of the notices, there was no need to invoke the extended limitation in any of the cases. In this connection, reliance was placed on the Tribunal's Larger Bench decision in Sri Shanmuga Bleaching Works v. CCE , wherein a ROM application filed by the appellant on 19.8.2003 against a final order passed by the Tribunal in the year 2001 was held to be time-barred inasmuch as the application had been filed beyond six months from 11.5.2002, the date on which the period of limitation for such applications was reduced from four years to six months vide Section 140 of the Finance Act, 2002. It was also pointed out that the above decision was upheld by the High Court in Sri Shanmuga Bleaching Works v. Registrar, CESTAT, New Delhi
11. We have given careful consideration to the submissions. The Notification granted total exemption from payment of duty of excise on tea, subject to the conditions specified in Column (3) of the TABLE annexed thereto. In respect of tea cleared by a factory belonging to a cooperative society during the period 10.12.99 to 31.3.2000, a set of conditions was prescribed in Column (3) of the said TABLE. A separate set of conditions was prescribed in respect of tea cleared by such a factory during any financial year subsequent to 1999 - 2000. Similarly, the Notification prescribed separate sets of conditions in respect of tea cleared by a 'bought-leaf factory' during the periods, 10.12.99 to 31.3.20.00 and any financial year subsequent to 1999 - 2000. In all these sets of conditions, one condition was identically worded and the same is condition (a) which reads as under:
The benefit of exemption from duty will commence from the date of the undertaking with the Assistant Commissioner / Deputy Commissioner of Central Excise as specified in condition (b) In respect of tea cleared by any factory [whether bought-leaf factory or factory belonging 10 a cooperative society] during any period [whether 10.12.99 to 31.3.2000 or any financial year subsequent thereto], the next condition viz. condition (b) opens thus:
The manufacturer files an undertaking that....
As rightly submitted by learned SDR, conditions (a) & (b) which relate to the undertaking to be given by a tea factory for the benefit of the Notification should be read together, whereupon it will be seen that the date of the undertaking with the AC/DC is the date on which it is filed with the AC/DC by the manufacturer i.e. the date on which the AC/DC receives the undertaking into his file. It cannot be the date on which the manufacturer sends the undertaking by Registered Post or under Certificate of Posting. Concise Oxford Dictionary, Tenth Edition, provides the following meanings of the verb file:
- (1) place (a document) in a file
- (2) submit (a legal document, application or charge) to be officially placed on record.
Webster's Third New International Dictionary of the English Language (Unabridged) (1976 Edition) gives the following meaning of the verb file:
- to deliver (as a legal paper or instrument) alter complying with any condition precedent (as the payment of a fee) to the proper officer for keeping on file or among the records of his office.
Thus the literal meaning of the verb file would firmly support the view that the date of undertaking with the AC/DC is the date on which the undertaking is received by the AC/DC into his file. The view taken by a coordinate Bench of the Tribunal in the case of Red Land Tea Factory (supra) that the benefit of the Notification will be available from the date of despatch of the undertaking is per incuriam inasmuch as that Bench apparently did not consider condition (b). In the present cases, the undertakings of the manufacturers were received by the AC/DC long after the date of commencement of the period mentioned in Column (2) of the TABLE ibid and therefore the department proposed to deny them the benefit of exemption from payment of duly on the tea cleared from the date of commencement of such period the date of filling of the undertaking. We find that this view of the Revenue was rightly accepted by a coordinate Bench of the Tribunal in the case of Malanad Cooperative Tea Factory (vide supra) and is squarely in accord with condition (a) which provided that the benefit of exemption from payment of duty would commence from the date of the undertaking with the AC/DC.
12. It is settled law that, in a taxing statute or in an exemption notification, there is no room for any intendment and regard must be had to the clear the meaning of the words used herein. As held by the apex court in the case of Parle Biscuits (P) Ltd. v. State of Bihar 2005 (192) ELT 23 (SC), the admissibility of exemption, under a Notification, from payment of duty on specified goods is governed wholly by the language of the notification. The relevant paragraph of the judgment in Parle Biscuits' case (supra) are reproduced below:
21. It is well-established that in a taxing statute there is no room for any intendment and regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption, it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different, but that is not the case here. In this connection we may refer to the observations of Lord Watson in Salomon v. Salomon & Co. 1897 A.C. 22, 38:
Intention of the legislature is a common but very slippery phrase, which, popularly understood may signify anything from intention embodies in positive enactment to speculative opinion as to what the legislature probably would have meant, although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication.
There is a line of binding judicial authorities to the effect that, where the words used in an exemption notification are plain and clear in meaning and do not admit of any doubt or ambiguity, such words represent the legislative intent, leaving no room for any rowing expedition into the intention of the exempting authority. In such a situation, there is no scope for "purposive interpretation" called for by Sh. Bhaskar. Ld. Counsel also pleaded for "reasonable interpretation". We would say that, where the words used by the exempting authority are clear in meaning, there is nothing more "reasonable" than a taintless understanding of such meaning. The words used in condition (a) in Notification 41/99-CE are plain and clear and can only be read as meaning that the benefit of exemption from duty on tea will commence from the date on which the manufacturer filed his undertaking with the AC/DC. The assesses did not satisfy this condition for the respective periods of dispute and, therefore, as contended by learned SDR, they are not entitled to claim exemption from payment of duty on tea for such periods.
13. Learned Counsel for M/s. Amko Tea (P) Ltd. made an attempt to bring out what he considered to be the fundamental difference between conditions for exemption and procedure prescribed to claim the same. He argued that the filing of undertaking was only a procedural formality and a substantial compliance therewith was enough for claiming the benefit of exemption. According to him, the conditions for exemption are those prescribed under condition (b) only. His client satisfied these conditions and became eligible for exemption. Learned consultant representing M/s. Golden Dew Tea Factory argued that the delayed filing of undertaking was only a procedural lapse which was condonable. We are not impressed with these arguments inasmuch as the opening paragraph of the Notification itself says that goods of the description specified in column (2) of the TABLE, falling under SH 0902.00 of the First Schedule to the Central Excise Tariff Act, 1985 are exempt from the whole of the duty of excise leviable thereon under Section 3 of the Central Excise Act, 1944 subject to the conditions specified in the corresponding entry in column (3) of the said TABLE. Column (3) is titled 'Condition' and anything contained in that column should be read only as a condition for claiming the benefit of exemption. Paradoxically, learned Counsel, who argued that what was contained in Clause (a) was only a rule of procedure and not a condition, himself required the Notification to be read as a whole. We have read the Notification as a whole and have found that both Clauses (a) & (b) against Sl. No. I/II/ III / IV in the TABLE laid down mandatory conditions for claiming exemption under the Notification. This view, we think, is supported by the apex court's judgment in Eagle Flask Industries (supra). In that case, their Lordships were examining the provisions of Notification No. 11/88-CE (NT) dated 15.4.1988 issued by the Central Govt. under Rule 174A of the Central Excise Rules, 1944. This notification exempted from the operation of Rule 174 goods specified in the Schedule to the Central Excise Tariff Act, 1985 so long as such goods were chargeable to 'nil' rate of duty or remained exempt from the whole of the duty of excise leviable thereon. The First Schedule to the Notification required the manufacturer to make a declaration and give an undertaking as specified in the prescribed form while claiming exemption for the first time under the Notification and thereafter before the 15th day of April of each financial year. The goods in question were chargeable to 'nil' rate of duty during the period of dispute in that case [1.3.90 to 21.8.90]. As the assessee had not filed the requisite declaration and undertaking under Notification No. 11/88-CE (NT) ibid, the departmental authorities denied the benefit of the Notification to them and demanded duty for the above period. The decision of the authorities was sustained by the Tribunal and the Tribunal's decision was affirmed by the apex court. Their Lordships held that the declaration and undertaking required to be filed by the manufacturer under the first proviso to the above Notification was not an empty formality or a mere procedural requirement. It was further observed thus: "For availing benefits under an exemption notification, the conditions have to be strictly complied with". Obviously, the Hon'ble Supreme Court considered Notification No. 11/88-CE (NT) (issued under Rule 174A) on par with any Exemption Notification issued under Section 5A of the Central Excise Act. In view of the apex court's ruling, we reject the argument made on behalf of the assessees that what was laid down under Clause (a) in column (3) of the TABLE to Notification No. 41/99-CE was mere a procedural requirement and its non-fulfilment is condonable. The decisions cited by ld. Consultant, noted in para (7) of this order, do not advance his clients' case on the facts on record.
14. As held in the case of Malanad Cooperative Tea Factory relied on by learned SDR, filing of undertaking for each financial year is a mandatory pre-requisite for availing the benefit of the Notification. We have noted with appreciation that learned Commissioner (Appeals) eminently dealt with the point in Order-in-Appeal Nos. 34 to 45/2003- CE (SLM) dated 8.5.2003. One of the decisions of the apex court, relied on by learned Commissioner (Appeals), is also pertinent to this context and the same is M/s. Mihir Textiles Ltd. v. CCE , wherein it was held that "any exemption dependent upon satisfaction of certain conditions could not be granted unless such conditions were complied with, even if such conditions are directory". We have already found that both conditions (a) and (b) prescribed for claiming exemption from payment of duty on tea under Notification No. 41/99-CE ibid are mandatory and therefore the assessees are liable to pay duty on the clearances of tea made during the respective periods. The case of M.A. Tulloch (supra) cited by ld. Counsel in support of his contention that the requirement of filing undertaking was only directory is clearly distinguishable on facts.
15. The plea of time-bar raised by Shri Saravanan cannot be sustained in view of the High Court's ruling in Sri Shanmuga Bleaching Works (supra). Though, during the periods of dispute, the limitation prescribed for demanding duty from an assessee under Section 11A(1) of the Central Excise Act was six months, it was one year on the dates of issue of the relevant show-cause notices by virtue of the amendment of law earned out in between. According to the ratio of the Tribunal's Larger Bench decision in Sri Shanmuga Bleaching Works (supra), as affirmed by the Hon'ble High Court, the provision of limitation which was in force on the date of issue of show-cause notice would be applicable to the demand of duty for any earlier period. Admittedly, the show-cause notices issued to the Consultant's clients were within one year from the relevant dates. Even otherwise, the time-bar plea of the consultant representing respondents in the Department's appeals seems to be innocuous inasmuch as he has not claimed that the plea was raised before the lower authorities.
16. In the department's appeals, the prayer is for restoration of the orders of the original authorities, which had demanded duty from the assessees and imposed penalties on them. The department wants such penalties to be restored along with demands of duty. The assessee-respondents oppose this prayer by submitting that no specific ground was raised by the Revenue as regards penalty. We find substance in this objection. The Revenue has not raised any ground for penalties though their prayer for restoration of the orders of the original authorities can also be understood as one for imposition of penalties on the respondents. Any relief not supported by the requisite grounds cannot be granted.
17. Admittedly, the assessees who have been held to be liable to pay duty on tea cleared by them during initial parts of the financial year 2000 -01, had availed themselves of the benefit of Notification No. 41/99-CE in respect of the clearances made prior to 1.4.2000 after satisfying the conditions for such benefit. For 2000-01, they did not file undertakings at the beginning of the financial year. They filed it belatedly. This delay, however, is not enough to hold that it was with intent to evade payment of duty that they chose to clear their product without payment of duty from 1.4.2000 upto the date of filing of undertaking with the AC/DC. But, even in the absence of mens rea, Rule 173Q was invocable against manufacturers indulging in clearances of excisable goods without payment of duty for whatever periods. Hence the plea of the Revenue for penalties on the assessees has to be sustained. However, in the facts and circumstances of the cases, the quanta of penalties imposed on the assessee-appellants cannot be said to be reasonable. We are of the considered opinion that a penalty of Rs. 5,000/- (Rupees five thousand only) each would match the above offence found against the assessee-appellants and it is ordered accordingly.
18. The orders impugned in the department's appeals to the extent they vacated the demands of duty are set aside, while the orders impugned in the assessees' appeals are sustained with the above modification as regards quanta of penalties. The department's appeals stand allowed in part, while the assessees' appeals are dismissed but with reduction of penalty.
(Pronounced in open court on 29.11.20006)