Customs, Excise and Gold Tribunal - Tamil Nadu
Cce, Madras And Cce, Guntur vs M/S. K.N. Chari Rubber & Plastics, M/S. ... on 10 April, 2001
Equivalent citations: 2001(135)ELT773(TRI-CHENNAI)
ORDER
K.K. Bhatia
1. The Notification No. 175/86-CE dated 1.3.1986, as amended, exempted specified excisable goods from whole of the duty of excise cleared for home consumption in any financial year in the case of the first clearances upto an aggregate value not exceeding Rs. 30 lakhs. These specified goods upto the value of Rs 50 lakhs, immediately following the above clearances, were further exempted form the duty equivalent to an amount collected at the rate of 10% ad valorem provided that aggregate value of the clearances of goods under both these categories did not exceed Rs 75 lakhs.
2. Clause 2 and 3 of this notification laid further restrictions on availing the exemption as under -
"2. The aggregate value of clearances of the specified goods form any factory by one or more manufacturers in any financial year under clauses (a) and (b) of paragraph, shall not exceed rupees thirty lakhs and fifty five lakhs respectively:
Provided that the aggregate value of clearances of the specified goods from any factory by one or more manufacturers in any financial year in terms of clause (a) and clause (b) of paragraph 1, taken together, shall not exceed rupees seventy-five lakhs.
3. Nothing contained in this notification shall apply if the aggregate value of clearances of all excisable goods for home consumption, -
(a) by a manufacturer, from one or more factories, or
(b) from any factory, by one or more manufacturers, had exceeded rupees two hundred lakhs in the preceding financial year:
Provided that for the purposes of computing the aggregate value of clearances under this paragraph, the clearances of any excisable goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this notification, shall not be taken into account."
3. The question raised by the Revenue in all the three appeals under consideration is, whether of not the value of the branded goods cleared on payment of duty should be included for the purpose of computing the value of exemption limit under this notification. We have heard Shri G. Sreekumar Menon, SDR, for the appellant/Revenue and S/Shri Kodanda Ram, B. Sreenivas and K.R. Natarajan, Advocates, for the respondents. The learned SDR submitted that in terms of the Explanation II to the Notification under consideration, the value of clearances of goods which are chargeable to nil rate of duty or exempted from duty are not liable to be included for the purpose of computing the aggregate value of clearances under the Notification. It is contended that since the branded goods are neither exempted nor chargeable to nil rate, the same are not excludible in terms of this Explanation. It is further contended that for the purpose of computing the aggregate value of clearances for the proceeding financial year in terms of Clauses 3 of the Notification, a specific provision is made for excluding the value of clearances of branded goods. However, no such provision is available for computing the value of clearances in Clause 1 of the Notification. In support of his contention, the learned SDR relied on the following decisions -
(i) Union of India vs Nandi Printers Pvt. Ltd., 2001 (127) ELT 645 (SC); and
(ii) Ramakrishnan Engg. Works vs CCE, Bolpur, 1996 (83) ELT 346 (T).
4. Shri Kodanda Ram and Shri B. Sreenivas, advocates, appearing for M/s Vijayawada Bottling Co. Ltd., submitted that the Notification under consideration specifically deals with full or partial exemption from excise duty on the specified goods under certain conditions. It cannot, therefore, include in its ambit any goods cleared on payment of full duty. It is contended that the entire quantity for the purpose of arriving at eligibility for the purpose of arriving at eligibility to total or partial exemption can only be of such specified goods which are not cleared on the payment of full duty. It is submitted that by virtue of the provisions under Clause 3 of the Notification (extracted above), the clearances of any specified goods affixed with the brand name or trade name of another person who is not eligible for exemption under this notification shall not be taken into account while computing the upper limit of exemption of Rs 200 lakhs on all excisable goods in the provisions financial year. It is contended that a Clause 7 of Notification, the exemption is not available to the specified goods when a manufacturer affixes goods with a brand name or trade name of another person not eligible to exemption under this Notification. Therefore, such branded goods have to be cleared on payment of duty, even by the assessees who are otherwise availing exemption. Therefore, it is pleaded that the above stated provisions taken together lead to one and only interpretation that the value of the branded specified goods cleared on payment of appropriate duty of excise shall not be taken into consideration while computing the aggregate value of first clearances of the specified goods of Rs 30 lakhs and aggregate value of clearances of Rs 200 lakhs in the preceding financial year. The learned advocates of the respondents relied on the following decisions in support of their contention
(i) CCE vs Power & Control, 1992 (62) ELT 662 (T); and
(ii) CCE, Madras vs Space Foods (P) Ltd. 1999 (112) ELT 416 (T).
5. We have carefully considered the submissions made before us. At the very outset, it may be observed that the proposition under consideration stands fully settled in favour of the respondents by the above stated decisions of the Tribunal in the case of CCE vs Power & Control, supra, and CCE, Madras vs Space Foods (P) Ltd., supra. In the first cited decision, it is held that the value of the goods cleared on full rate of the duty with the brand name need not be taken into consideration for the purpose of computing the aggregate value of first clearances of Rs 15 lakhs (the upper limit of the aggregate value of clearances provided in para 1(a) and 1(b) of this Notification at the relevant time). In the second cited decision also, it is held that the value of goods affixed with the brand name of another person who is not entitled to the benefit of notification no. 175/86-CE and these being cleared on payment of duty in terms of para 7 of the said Notification is not to be taken into account in computing the aggregate clearances of Rs 20 lakhs or Rs 30 lakhs in terms of clauses (a) & (b) of para 1 of this Notification. Following the ratio of these decisions, the Revenue appeals would merit dismissal. However, the Revenue has also cited some other decisions before us. The first one of these is the Lager Bench decision of the Tribunal in the case of Ramakrihsna Engg. Works vs CCE, Bolpur, supra, and in this decision it is observed that the limit of Rs 30 lakhs is placed on the aggregate value of first clearances on specified goods. It is observed that the stress on the reckoning of clearances in any financial year and the qualification of clearances by the word 'first' would clearly indicate the first clearances means clearances in a chronological order upto a limit of Rs 30 lakhs. If within the first clearances of Rs 30 lakhs, any goods are cleared on payment of duty, the same cannot be excluded from reckoning. Similarly, if out of the first clearances of Rs 75 lakhs (the ceiling of eligibility for exemption under this Notification at the relevant time), any goods have been cleared on payment of duty, the same cannot be excluded from the reckoning. In the judgment of the Hon'ble Supreme Court in the case of Union of India vs Nandi Printers Pvt. Ltd., supra, the Notification under consideration was Notification No. 80/80 dated 19.6.1980. This Notification provided exemption to a manufacturer in respect of the clearances of the specified goods subject to certain conditions, if the clearances of such goods during the preceding financial year had not exceeded Rs 15 lakhs. This Notification further provided that the exemption would not be available if the manufacturer had exceeded the clearances of Rs 20 lakhs for all excisable goods during the preceding financial year. The Apex Court in its judgement observed that though the goods in question viz. Printed Cartons were cleared by the respondents at nil rate of duty by availing exemption under notification no. 89/79 but by reason of an exemption Notification would not make printed cartons non-excisable goods. It was, therefore, held that since by included the value of clearances of printed cartons, the assessee had exceeded the value of Rs 20 lakhs; as specified in para 2 of the notification, they were not eligible to exemption under it and hence the Revenue's appeal was allowed.
6. On careful consideration of the above decisions, it is observed that the Proviso under para 3 of Notification No. 175/86-CE specifically states that for the purpose of computing the ceiling limit of the clearances of Rs 200 lakhs on all excisable goods in the preceding financial year, the clearances of any excisable goods where a manufacture affixes the specified goods with a brand name or trade name of another person who is not eligible for exemption shall not be taken into account. In view of these specific provisions, we are of the view that such goods cleared on payment of duty under Clause 7 of this Notification are outside the purview of this exemption Notification. Therefore, they are not to be reckoned for the purpose of computing the first clearances of specified goods upto Rs 30 lakhs for the purpose of exemption or the limit of Rs 200 lakhs in the previous financial year. The Larger Bench of the Tribunal in the case of Ramakrishna Engg. Works vs CCE, Bolpur, supra, while considering, while considering the question of inclusion of the value of the specified goods cleared on payment of duty in the ceiling limit of Rs 30 lakhs/Rs 75 lakhs was not seized or with the specific clauses in the exemption notification relating to the exclusion of the value of the goods bearing the trade name/brand name of another person and cleared on payment of duty. Therefore, the ration of this decision has no application to the facts of the present case. Similarly, the judgment of the Apex Court in the case of Union of India vs Nandi Printers Pvt. Ltd., supra, is also on the different set of facts and altogether different provisions in another exemption notification. Therefore, the ratio of this judgment is also not applicable to the facts of the present case.
7. In view of the above analysis, all the Revenue appeals fail and the same are accordingly dismissed. One of the respondents viz. M/s K.N. Chari Rubber & Plastics (P) Ltd. in Appeal No. E/1555/94-C have also filed the cross objections. These are only comments of the respondents. They are not otherwise aggrieved with any part of the order appealed against. The respondents have themselves stated in their written submissions that though the memorandum of cross-objections are not legally required from them as the earlier decisions are entirely in their favour, yet in all such cases written arguments by way of counter to the grounds of Departmental appeal will be necessary for rendering justice. The cross-objections are, therefore, misconceived.
8. The Revenue appeals and the cross-objections are accordingly dismissed.
Pronounced in the Court on.