1989 (2) TMI 286 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 80/80-C.E. regarding excise duty exemption for specified goods.
2. Whether Thinner, exempted under Notification No. 179/77-C.E., falls under the category of excisable goods.
3. Legal precedent on whether excisable goods become non-excisable after exemption by notification.

Analysis:
1. The case involved a dispute over the interpretation of Notification No. 80/80-C.E., which provided for duty-free clearance of specified goods up to a certain value and concessions thereafter. The Collector (Appeals) denied the exemption to the appellants as the value of excisable goods, including Thinner, exceeded the prescribed limit in the previous financial year. The issue was whether Thinner's value should be excluded from the computation of total clearances. The Tribunal upheld the Collector's decision, citing the exclusion rule in Explanation V of the Notification.

2. The appellants argued that Thinner, fully exempted under Notification No. 179/77-C.E., should not be considered excisable goods for computation purposes. They relied on various court decisions and contended that the High Court judgments were binding on the Tribunal. On the other hand, the respondent argued that Thinner, falling under Tariff Item 68 but exempted, should be treated as excisable goods. The Tribunal considered these arguments and previous decisions to determine the status of Thinner.

3. The Tribunal examined conflicting High Court judgments on whether excisable goods lose their excisable status after exemption by notification. While some High Courts held that exemption renders goods non-excisable, others, including Delhi, Karnataka, Madras, and Andhra Pradesh High Courts, opined that excisable goods remain so even after full exemption. The Tribunal aligned with the latter view, citing relevant case laws and its own previous decision. It emphasized that the date of removal is crucial for excise duty levy, as highlighted in a Gujarat High Court case.

4. The Tribunal, in separate orders by different members, concurred on the main conclusion that excisable goods do not lose their excisable status merely due to exemption under a notification. They referred to past judgments and legal principles to support their decision. Consequently, the appeal was dismissed based on the understanding that Thinner's value was correctly included in the computation of total clearances, leading to the denial of the exemption under Notification No. 80/80-C.E.