1998 (5) TMI 170 - AT - Central Excise

Summary

Issues:
1. Exclusion of export clearances for computing excise duty.
2. Interpretation of Notification No. 175/86 regarding excise duty exemptions.

Issue 1: Exclusion of export clearances for computing excise duty:
The case involved the clearance of excisable products and machinery without payment of Central Excise duty. The Revenue alleged that machinery clearances without duty payment were in violation of the law. The appellants argued that export clearances should be excluded while determining duty exemption under Notification No. 175/86. The lower appellate authority upheld the Revenue's decision, leading to the appeal before the Tribunal.

Issue 2: Interpretation of Notification No. 175/86 regarding excise duty exemptions:
The appellants contended that the clearances mentioned in the notification were for home consumption only, and exports should not be included in the calculation for duty exemption. They highlighted specific paragraphs in the notification indicating exemptions based on the value of clearances for home consumption. The Revenue, however, relied on Explanation II of the notification, which excluded clearances chargeable to nil duty or fully exempted. The Tribunal analyzed the notification and Explanation II, concluding that the latter was meant for determining clearances for home consumption only, not for export clearances.

In its judgment, the Tribunal found that Explanation II of Notification No. 175/86 was to determine the aggregate value of clearances for home consumption only, not for export clearances. The notification clearly indicated exemptions for clearances for home consumption, and export clearances were not mentioned. Therefore, the Tribunal held that the lower appellate authorities erred in applying Explanation II to export clearances. The impugned order was set aside, and the appeal was allowed in favor of the appellants, providing consequential relief.