1998 (12) TMI 252 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 6/88-C.E., dated 19-1-1988 regarding exemption from additional duty to fents and rags of man-made fabrics based on factory-wise clearances.

Analysis:
The appellant, a division of a company, cleared fents and rags under specific chapters of the Schedule to the CETA 1985, paying duty at 5% ad valorem as per Notification No. 6/88-C.E., dated 19-1-1988. A show cause notice proposed recovery of differential duty due to exceeding the 5% limit based on the total clearances of man-made fabrics from the appellant's factory alone. The Assistant Collector and lower Appellate authority upheld the demand, leading to the appeal. The Tribunal noted the emphasis in the notification on factory-wise clearances and upheld the demand as the aggregate quantity of fents and rags from the appellant's unit exceeded 5% of the total clearances of man-made fabrics, rejecting the appeal.

The appellant contended that the Collector misinterpreted the term "from any factory" in the notification, arguing that it should include clearances from multiple factories of the same manufacturer. They emphasized that the main issue was whether the two factories should be considered as different manufacturers influencing the aggregate quantity of clearances. However, the Tribunal held that the notification's wording, "from any factory," should be strictly construed, and without explicit mention of multiple factories, it refers to the factory from which goods were cleared. The Tribunal rejected the appellant's arguments as hyper-technical, emphasizing the need to interpret the notification language strictly, as supported by relevant case law, and upheld the impugned order, rejecting the appeal.

The Tribunal reiterated the principle of strict construction of notifications, emphasizing the importance of interpreting the actual language used without presuming additional words. The term "from any factory" was deemed to refer to the factory of the appellant from which goods were cleared during the year. The Tribunal agreed with the argument that explicit mention of covering multiple factories of a manufacturer was necessary in the absence of such provision in the notification. Consequently, the Tribunal found no reason to interfere with the impugned order and rejected the appeal based on the strict interpretation of the notification language and relevant case law.