Customs, Excise and Gold Tribunal - Delhi
Indye Chemicals vs Collector Of Central Excise on 29 October, 1985
Equivalent citations: 1987(11)ECC141, 1986(7)ECR45(TRI.-DELHI), 1986(25)ELT318(TRI-DEL)
ORDER K. Prakash Anand, Member (T)
1. Appeal No. 377/82 is a Revision Application, filed before the Government of India, against Order-in-Appeal No. A-1195/BD-493/82 dated 17th August, 1982, passed by the Collector of Central Excise (Appeals), Bombay. After the constitution of this Tribunal, it has been transferred here and is now being treated as an Appeal before us. The Tribunal has also received and registered Appeal No. 288/83 against the same order. Both matters are being disposed of by this common order.
2. Briefly, the facts are that the appellants are manufacturers of Synthetic Organic Dyestuff, falling under Central Excise Tariff Item No. 14-D. Under Notification No. 180/61-CE dated 23-11-1961, rapidogens, falling under Item No.14D-CET, are exempted from whole of duty of excise leviable thereon, if such rapidogens are manufactured from other dyes on which Excise Duty or Countervailing Customs Duty, as the case may be, has already been paid. The petitioners filed a classification list under Rule 173-B of the Central Excise Rules, 1944, claiming the exemption under this Notification. This was considered and duly approved by the department. Separately, the Government issued another Notification No. 71/78-CE dated 1-3-1978, which exempted synthetic organic dyestuffs (including pigment dye stuff) and synthetic organic derivatives used in any dyeing process, to the extent of first clearances for home consumption upto an aggregate value not exceeding Rs. 5 lakhs and cleared on or after the 1st day of April, by or on behalf of manufacturer, from one or more factories, from the whole of Excise Duty leviable thereon. The petitioners filed a classification list for claiming exemption under this Notification also and this was also duty considered and approved by the proper officer of the Central Excise Department. Availing of the exemptions, afforded under these two Notifications, the appellants, during the period from April, 1978, to November, 1978, cleared for home consumption synthetic organic dyes, other than rapidogens, upto an aggregate value of Rs. 4,98,436.00, and also cleared, during the same period, rapidogens of the value of Rs. 1,07,384.00. On 20/22nd January, 1979, the appellants were sent a notice from the Excise authorities that they should show cause why an amount of Rs. 33,332.99 should not be recovered from them on the ground that they cleared, without payment of duty, a total quantity of dyes, including rapidogens, of the aggregate value of Rs. 6,05,819, instead of Rs. 5 lakhs, as provided in Notification No. 71/78-CE dated 1-3-78. The notice stated that, in view of their availing of exemption under Notification No. 71/78-CE, on goods to the extent of Rs. 5 lakhs, they were not entitled, separately, to avail of the exemption Notification No. 180/61, over and above the exemption of Rs. 5 lakhs. The appellants replied stating, inter alia, that the two Notifications in question provide for a separate exemptions and the limit of Rs. 5 lakhs under Notification No. 71/78 did not include exemption availed of under Notification No. 180/61. This plea of the appellants was not accepted by the Assistant Collector of Central Excise, who confirmed the demand. The order of the Assistant Collector was upheld by the Collector of Central Excise (Appeals), Bombay. It is against this order that the appellants are in appeal before us.
3. Now, before us, the appellants have re-iterated the view taken before the lower authorities that the two Notifications in question, namely No. 180/61 and 71/78, are independent of each other and there is nothing contained in either of the Notifications which would affect the separate entitlements of the assessee under these two Notifications, should he be availing of the benefit of both of them at the same time. It is further stated that classification lists, claiming exemptions under the two Notifications, were approved separately by the proper officer and, until this classification was reversed by the competent authority after observance of due process of law, there was no cause for demanding duty. It is argued before us that in interpreting the relevant notifications we should go by the meaning available from the plain reading of the Notifications as they stand. If there are exemptions afforded separately under the two notifications, the assessee should be entitled to avail of their benefit separately, unless there is any specific provision to the contrary. No explanation incorporated under Notification No. 71/78 restricted its scope with reference to the earlier Notification No. 180/61. It is further claimed that, as a result of subsequent amending Notification No. 141/79 dated 30th March, 1979, it was made abundantly clear that, for purposes of computing aggregate value of clearances under Notification No. 71/78 dated 1st March, 1978, the clearances of the specified goods, which are exempted from the whole of duty of Excise, leviable thereon by another Notification, issued under Sub-rule 1 of Rule 8 of the Central Excise Rules, 1944, and for the time being in force, shall not be taken into account. It is pointed out that this explanation was obviously of a clarificatory nature and should be considered to have retrospective applicability in understanding the import and meaning of Notification No. 71/78. One other point made on behalf of the appellants is that even if the demand of duty were otherwise sustainable, there is an error of computation as it is based on cum-duty value of all clearances. It is pleaded that should the Tribunal be pleased to uphold the stand taken by the department, the demand should be suitably revised on the basis of ex-duty value of clearances.
4. Appellants have cited the following case law in their favour :
(i) Bombay Paints and Allied Products Limited v. Union of India and Ors. 1985(21) ELT 663, 'decided by the High Court of Adjudicature at Bombay.
(ii) Vikrant Tyres Limited, Mysore v. The Collector of Central Excise, Bangalore, 1985(21) E.L.T. 620, decided by CEGAT.
It is pointed out by the appellants that in the case of Bombay Paints and Allied Products Ltd. (supra), it was held by the High Court of Bombay that while fiscal statutes must be strictly construed, where there is any doubt about the interpretation, the benefit of it must go to the assessee, so as to lessen his tax burden. Appellants have stated that if there is any doubt as regards a conflict between the two notifications in question, this doubt must be resolved in favour of the assessee. It is further argued that it would be highly anamolous to accept the interpretation that, contrary to any specific provision contained therein, as a result of issue of Notification No. 71/78, the earlier Notification No. 180/61 became inoperative or redundant where a manufacturer availing of the former exemption was also producing rapidogens from duty-paid dyes. It is in this context that appellants have cited the case of Vikrant Tyres v. Collector of Central Excise, Bangalore (supra).
5. On behalf of the department, the learned Departmental Representative, has re-iterated the view taken by the lower authorities. It is stated by him that there is no ambiguity in Notification No. 71/78, which affords exemption in respect of clearances of the excisable goods upto an aggregate value not exceeding Rs. 5 lakhs. In computation of this value limit, certain specific exclusions have already been made in respect of goods, which are availing of exemptions under some of the other notifications. It is stated on behalf of the department that the fact that goods covered by Notification No. 180/61 are not specifically excluded in this explanation makes it quite clear that such goods should be included in the computation of the five lakh limit. The contention of the appellants that the explanation made by Notification No. 141/79 should be considered to be of a clarificatory nature and, therefore, have retrospective effect, is stoutly opposed. It is stated that Notification No. 141/79 enlarges the scope of exemptions under the two notifications and as such extension of the benefit of an exemption can only be prospective and it cannot have retrospective effect.
6. We have carefully considered the facts of the case and the submissions made on both sides, both written and oral. For a proper appreciation of these submissions and case of reference, it is necessary to re-produce here the three Notifications, in question, i.e. No. 71/78-CE dated 1-3-78 (the schedule to this Notification is a long one and it is being omitted. Suffice it to say that No. 9 of this Schedule refers to Synthetic Organic Dyestuff, including pigment dyestuff, or synthetic organic derivatives, used in any dye process), Notification No. 180/61-CE dated 23-11-61 and Notification No. 141/79-CE dated 31-3-1979.
Notification No. 71/78 dated 1-3-1978 In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts the excisable goods of the description specified in column (3) of the Table hereto annexed (hereinafter referred to as the "specified goods"), and falling under such Item Number of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944),_as is specified in the corresponding entry in column (2) of the said Table, in respect of the first clearances of such excisable goods for home consumption upto an aggregate value not exceeding rupees five lakhs and cleared on or after the 1st day of April in any financial year by or on behalf of a manufacturer, from one or more factories, from the whole of the duty of excise leviable thereon, subject to the following conditions, namely :
(a) the exemption contained in this notification shall not be applicable to manufacturer -
(i) during the financial year 1978-79, if the aggregate value of the specified goods cleared, if any, by him or on his behalf for home consumption, from one or more factories, during the period commencing on the 1st day of April, 1977, and ending on the 28th day of February, 1978, had exceeded Rs. 13.75 lakhs; and
(ii) during the financial years subsequent to the financial year 1978-79, if such clearances, if any, of the specified goods, during the preceding financial year, had exceeded rupees fifteen lakhs;
(b) the value of clearances made during any financial year shall be calculated separately for all the goods specified in column (3) of the said Table against each serial number specified in the corresponding entry in column (1) thereof;
(c) where a factory producing the specified goods is run at different times of any financial year by different manufacturers, the value of the specified goods so cleared from such factory in any such year at nil rate of duty shall not exceed rupees five lakhs.
Explanation I. - For the purposes of this notification, the expression "value" means the value as determined in accordance with the provisions of Section 4 of the Central Excises and Salt Act, 1944 (1 of 1944).
Explanation II. - For the purposes of this notification -
(a) 'mill board' means any unbleached homogenous board, having a thickness exceeding 0.50 millimetre and made out of mixed waste papers with or without screenings and mechanical pulp but without any colouring matter being added thereto;
(b) 'straw board' means a board made wholly or predominantly from partially cooked unbleached straw or bagasse or grasses or other agricultural residues or a mixture of these provided that -
(i) the quantity of any other material used shall not exceed one third in weight of the total weight "of the ingredients.
(ii) such board shall not be specially compressed and shall not have any paper pasted on either surface.
Explanation III. - For the purposes of determining the value of clearances under this notification -
(i) in respect of goods of the description specified against serial number 6 of the said Table, -
(a) the value of goods on which duty is exempted under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) 'No. 114/73-Central Excises, dated the 30th April, 1973, shall not be taken into account;
(b) the value of the said goods manufactured without the aid of power shall not be taken into account;
(ii) in respect of goods of the description specified against serial number, 12 of the said Table, the value of perfumed hair oils mentioned at serial number 2 of the Table annexed to the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 63/71-Central Excises, dated the 29th May, 1971 on which duty is exempted subject to the condition specified therein, shall not be taken into account.
(iii) in respect of goods of the description specified against serial number 25 of the said Table, where a manufacturer gets his Chinaware or Porcelainware or both fired in a klin belonging to or maintained by a Pottery Development Centre run by the Central Government or a State, Government or by the Khadi and Village Industries Commissioner, the value of the Chinaware or Porcelainware or both, belonging to the said manufacturer and fired in such a klin shall be taken into account;
(iv) in respect of goods of the description specified against serial number 37 of the said Table, the value of goods on which duty is exempted under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 33/69-Central Excises, dated the 1st March, 1969, shall not be taken into account;
(v) in respect of goods of the description specified against serial number 38 of the said Table, the value 'of goods on which duty is exempted under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 51/70-Central Excises, dated the 1st March, 1970, shall not be taken into account-;
(vi) in respect of goods of the description specified against serial number 41 of the said Table, the value of goods on which duty is exempted under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 99/71-Central Excises, dated the 29th May, 1971, shall not be taken into account;
(vii) in respect of goods of the description specified against serial number 45 of the said Table, the value of the items of furniture on which duty is exempted under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 91/68-Central Excises, dated the 30th April, 1968, and the value of the parts of steel furniture shall not be taken into account;
(viii) in respect of goods of the description specified against serial number 50 of the said Table, the value of goods on which duty is exempted under the notifications of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 53/70-Central Excises, dated the 1st March, 1970 and 94/70-Central Excises, dated the 1st May, 1970, shall not be taken into account.
(ix) in respect of goods of the description specified against serial number 51 of the said Table, the value of goods on which duty is exempted under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 99/70-Central Excises, dated the 1st May, 1970, shall not be taken into account.
2. Nothing contained in this notification shall, in so far as goods of the description specified against serial number 41 of the said Table, apply to manufacturers of such goods who avail of the exemption under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 101/71-Central Excises, dated the 29th May, 1971, or under the notification of the Government of 'India in the Ministry of Finance (Department of Revenue and Insurance) No. 153/71-Central Excises, dated the 26th July, 1971.
3. This notification shall come into force on the 1st day of April, 1978".
Notification No. 180/61-CE, dated 23-11-61.
In exercise of the powers conferred by Rule 8(1) of the Central Excise Rules, 1944, the Central Government hereby exempts Dyes specified in the Schedule annexed hereto from the whole of the duty of excise leviable thereon, if and only if, such dyes are manufactured from any other dye on which excise duty or countervailing Customs duty has already been paid.
SCHEDULE
1. Solubiiised Vats.
2. Rapid Fast Colours.
3. Rapidogens.
4. Fast Colour Salts.
Notification No. 141/79 dated 30-3-1979.
In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 71/78-Central Excises, dated the 1st March, 1978, namely :-
In the said notification, -
(i) in condition (a) of the first paragraph, of Clause (ii), the following Clause shall be inserted, namely : -
"(iii) who manufactures excisable goods falls under more than one Item Number of the said First Schedule and the aggregate value of excisable goods cleared by him or on his behalf for home consumption, from one or more factories during the preceding financial year, had exceeded rupees twenty lakhs;";
(ii) in Explanation III of the first paragraph,
(a) Clause (i), (ii), (iv), (v), (vii), (viii) and (ix) shall be omitted;
(b) Clause (iii) and (vi) shall be renumbered as clauses (i) and (ii), respectively;
(iii) after Explanation III of the first paragraph the following explanation shall be inserted namely :-
"Explanation IV - For the purposes of computing the aggregate value of clearances under this notification, the clearances of any specified goods, which are exempted from the whole of the duty of excise leviable thereon by any other notification issued under Sub-rule (1) of Rule 8 of the aforesaid Rules and for the time being in force, shall not be taken into account."
2. This notification shall come into force on the 1st day of April, 1979.
Having perused the above notifications, we come to the arguments of the appellants related to these notifications. Firstly, it is stated that the two notifications No. 180/61 and 71/78 are independent of each other and that there is nothing in either of these which would affect the separate entitlements to the assessee under these two notifications, should he be availing the benefit of both of them at the same time. This proposition really begs the question, which is, what are the entitlements of the assessees under these two notifications. Notification No. 180/61 dated 23-11-1961 exempts rapidogens from the whole of duty of excise leviable thereon if such dyes are manufactured from any other dye on which Excise Duty or Countervailing Customs Duty has already been paid. On the other hand, Notification No. 71/78 dated 1-3-1978 grants exemption in respect of the first clearance of the excisable goods in question for home consumption upto an aggregate value not exceeding Rs. five lakhs, subject to certain specified conditions and explanations. It has been- argued that in interpreting these notifications we should go by the meaning available from the plain reading of the. notifications as they stand. It is added that if these exemptions have been granted separately, the benefit thereunder should be available to them separately unless there is any specific provisions to the contrary. This again by itself, is not a proposition that can be disputed. Nevertheless, the whole point at issue in this matter hinges on problems which arise in interpretation of Notification No. 71/78 dated 1-3-78 where an assessee is already availing of Notification No. 180/61 dated 23-11-61 inasmuch as the question has been raised that the exemption granted under the former notification is limited to excisable goods cleared for home consumption, upto an aggregate value not exceeding Rs. 5 lakhs, and it is to be decided whether this exemption would exclude exemption availed in respect of such goods included in the clearances for home consumption which are separately availing of exemption under Notification No. 180/61. It would thus be seen that for the interpretation of Notification No. 71/78, it becomes necessary to refer not only to the conditions subject to which it grants exemption but also the provisions of Notification No. 180/61. We observe that the conditions, subject to which exemption has been granted under Notification No. 71/78, contain specific provisions relating to how the value of clearances made during any financial year have to be computed. This has been done by virtue of the conditions themselves and, furthermore, by way of explanations. For instance, it has been made absolutely clear through a specific provision under Explanation III that the value of goods on which duty is exempted under Notification No. 114/73 dated 30th April, 1973, shall not be taken into account. Again, it has been said that the value of the goods manufactured without the aid of power shall not be taken into account, and so on, It would thus be seen that it is not as if ?se who drafted the notifications were unaware of the existence of rate' exemptions granted under certain other notifications. They, were, obviously fully in the know of them and Government took a deliberate decision as regards which of the exemptions separately availed under other notifications should be excluded while computing the value limit in respect of "the first clearances of such excisable goods for home consumption upto an aggregate value not exceeding Rs. 5 lakhs". In view of these specific provisions as regards exclusions, there is a natural presumption that there was a deliberate decision not to bring within the purview of such relief, exemptions available under other notifications -which have not found mention in this notification for purposes of the aforesaid exclusion in the computation of value limits. Appellants have referred to the amending Notification No. 141/79 dated 30th March, 1.979, which provides that in computing the aggregate value under Notification No. 71/78, the clearances of -specified goods, which are exempted from the whole of duty of excise leviable thereon by any other notification issued under Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, and for the time being in force, shall not be taken into account and pointed out that this explanation was obviously of a clarificatory nature, which should be considered to have retrospective applicability in understanding the import and meaning of Notification No. 71/78. This argument is not, at all, acceptable for the reason that it is by now well established that such exemption notifications always have prospective effect and not retrospective effect. In particular, any exemption notification, which enlarges the scope of an earlier notification, cannot, unless there is a specific provision to the contrary, be considered to be of a clarificatory nature. It is further claimed by the appellants by reference to the decision in the case of Bombay Paints and Allied Products Limited (supra) that while fiscal statutes must be strictly construed, where there is any doubt the benefit of it must go to the assessee so that the tax burden is lessened. This principle, again, may not be disputed or debated upon here for the reason that, in the background of the factual position discussed here, we feel, there is hardly any scope for any doubt, the benefit of which can be extended to the assessee. We also cannot accept that the interpretation that we are giving here creates an anamoly of a nature where either of the two notifications in question become inoperative or redundant, thus creating results which, in the light of the decision in the case of Vikrant Tyres v. Collector of Central Excise, Bangalore, are to be avoided. As for the argument that the appellants in respect of each notification filed classification lists, which were duly approved by the proper officer and that until this classification was reversed by the competent authority, after observance of due process of law, there was no cause for demanding duty, we do not quite understand how this arises. The Department is not questioning the eligibility of the appellants to availing of the relevant notifications, which were approved as per the classification lists. The question is only one of determining the value limit of exemption for goods cleared under Notification No. 71/78.
7. As an alternative plea, appellants have stated before us that, should we decide to uphold the stand taken by the department in the interpretation of the relevant notification, the demand should be suitably revised on the basis of ex-duty value of clearances. This point was conceded by the learned Departmental Representative. However, as this has not been urged before lower authorities, we leave it to them to take view in the matter after going through the facts of the case.
8. In view of our foregoing findings, the appeals are rejected.