TMI Blog1985 (10) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the Appellate Tribunal was barred under Section 35B(1) proviso of the Central Excises Salt Act, 1944 and as a consequence of which the application lay to the Central Government under Section 35EE ibid. Shri Senthivel submitted that the present appeal did not cover any aspects whereof the jurisdiction of the Tribunal had been barred under the aforesaid provisions of law. The question covered by the present appeal was whether in the case of fabrics and yarn exported without payment of duty under Rule 13, the interest was payable as held by the Asstt. Collector in terms of Rule 49A which defers the liability to payment of duty. Therefore, Shri Senthivel submitted that the matter was within the purview of the Appellate Tribunal. The Respondent s representative Dr. Jois also referred to the proviso to Section 35B(1) and stated that the appeal did not fall within the aforesaid proviso as it did not relate to a claim for rebate of duty on goods exported outside India. The question for consideration was whether the goods could be exported without payment of interest leviable under Rule 49A. Since both the appellants and the respondents agreed that the Appellate Tribunal had the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me consumption. There was no authority under the aforesaid Rule for waiving the interest charges. The Department was only demanding the interest, the payment of which had been defered under Rule 49A. In normal circumstances, the yarn would have been cleared on payment of duty before the same could be woven into fabrics. The postponement of the duty leviable could not therefore justify waiver of interest. Shri Senthivel argued that Rules 9 and 49 had been amended under Government of India Notification No. G.S.R. 74(e), dated 20-2-1982 and an explanation had been added to the aforesaid Rules. Under Section 51 of the Finance Act, this amendment had been given retrospective effect as from 20-8-1944. These rules had been framed by the Central Government under Section 37 of the Act and therefore they had the force of law. Rule 49A was optional and the manufacturer could chose to opt for this procedure or could comply with the normal procedure of paying duty under Rule 9 and 49. For a manufacturer working under Rule 49A, it was not possible to envisage whether the yarn to be woven into fabrics would be ultimately exported or not. But this fact did not affect the liability to pay the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the duty on fabrics at the time of the removal of the fabrics from the mills. The deferment of the duty on yarn did not entail any payment of interest till 18-6-1977. This was the Government s policy till the same was changed by the incorporation of Rule 49A in the Central Excise Rules. Under this Rule, yarn duty was payable along with the duty on cloth. Dr Jois argued that the duty payable was distinguishable from duty leviable. He cited the example of levy of special duty of excise as a percentage of basic duty of excise and the interpretation and administration of the Central Excise officers in respect of special duty which was treated as Nil when the basic duty payable was nil. He also quoted Notification 53/ 85, dated 17-3-1985 in support of his contention. He thus argued that duty leviable is not the same as duty payable. Under Rule 49A, the interest payable was 1 % or 3% of the duty payable on yarn. If therefore the duty payable on yarn was Nil, a percentage of nil amount would also be nil. Dr. Jois submitted that in view of the foregoing facts, the SDR s contention that interest was chargeable was not correct. He submitted that Collector (Appeals) order was accordingly c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpreting Section 35B(1) proviso. While we have authorities which state that the definition of words and phrases under the Parent Act would hold good for defining the same for the purposes of Rules and Notifications issued thereunder, no such authority exists to my knowledge which would show that the words, phrases etc. defined in Rules should be taken for the purposes of interpreting the Act. The Explanation 2 to Rule 13 appears to have been introduced only with a specific purpose of permitting the export of the excisable goods used in the manufacture of goods which are exported without payment of duty on the excisable goods so used. This explanation therefore, gives legal authority for not charging duty in cases of the type under consideration where yarn is removed without payment of duty for the manufacture of cloth which is subsequently exported without payment of duty under Rule 13. Therefore, this explanation used for the special purpose of Rule 13 cannot apply for interpreting Section 35B(1). While Section 2(d) defines Excisable Goods , no definition is available for Goods . However, it is pertinent to consider that after the inclusion of items 68 in the Tariff with effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged and retained by the Central Excise officer as none of these rules authorised the repayment or non-recovery of the interest amount. Shri Senthivel has also relied on the definition of Duty under Rule 2(v) of the Central Excise Rules to urge that Rules 12 and 13 would not cover interest. Examining the aforesaid contentions, it is seen that under Rule 49A, interest is chargeable at the appropriate on the amount of duty on yarn. The method prescribed for paying the duty on yarn and the interest is to pay these along with the duty on the fabrics in the manner prescribed under Rule 52. Rule 52 envisages clearance of the goods on payment of duty for home consumption. When the goods are removed either from the place or premises specified under Rule 9 or from a store room or other place of storage approved under Rule 47, an application has to be made for the aforesaid purpose of clearance of goods on payment of duty. Therefore, in terms of Rule 49A, the duty on the yarn is postponed till the fabrics are removed from the factory under Rule 52. But in case where the goods are not cleared on payment of duty for home consumption, but for export under Rule 13, the recovery of duty on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under this Act. This analogy will therefore hold goods in determining whether interest is chargeable under Rule 49A in the present appeal or not. In my view, since the duty on yarn is Nil, the interest is also Nil. In coming to this conclusion, it is not necessary to refer to the provisions of Rule 12 or 13 of the Central Excise Rules, 1944. The relevant rule is 49A and as construed in the above manner it does not authorise the Department to charge interest where fabrics are exported without payment of duty under Rule 13 by a composite mill who has opted for payment of duty on yarn under Rule 49A. In this view it is not necessary for me to go into the contentions of the Learned SDR that the Department had debited the amount of interest to the bond account maintained by the Respondents with the Department for the export of fabrics under Rule 13. In this way, the definition of duty under Section 2(5) excluding the interest charges as urged by the SDR does not in any way militate against the interpretation of Rule 49A. In view of these facts, I find that the contentions advanced by the Collector of Central Excise, Bombay I in his appeal are not sustainable. Accordingly, I reject the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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