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TMI Blog1995 (8) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... fit under the said Notification. The respondents contested the show cause notice on the round that they rightly availed the benefit under the said notification and further that the demand was time barred. The Collector who adjudicated the case vacated the said show cause notice after usual adjudication. Hence the present appeal by the Revenue. 3. Arguing on behalf of the Revenue Shri Somesh Arora, Ld. JDR submitted that the respondents had filed their classification list No. 18/84-85-C/R. VI effective from 17-3-1985 claiming exemption on tyres and tubes specially designed for use of animal driven vehicles and hand carts on the condition that the marking `ADV' and hand carts will be made on every such tyres and tubes from 17-3-1985. The same was approved. However, it was observed by the visiting officers that the respondents had not been marking `ADV' on the tyres and tubes meant for hand carts as required in the said Notification while they were prominently embossing `ADV' on the tyres and tubes meant for animal driven vehicles. On enquiry the General Manager of the respondent company in his written statement dated 1-4-1986 tendered before the visiting officers stated that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as tyres for Animal Driven Vehicles. That apart, he submitted that the very purpose of the condition laid down in the Notification that there should be a durable prominent marking of the letters "ADV" on every such tyres specifically designed for use of hand carts is that the customer purchasing such tyre may know that the same are meant for either animal drive vehicles or hand carts. The embossing of the letters "For Hand Carts" on such tyres by the respondents served the said purpose as the customers while purchasing such tyres were told that these tyres are meant for use of hand carts and referred to various decisions rendered by this Tribunal, emphasising that a Notification should not be construed in a manner which defeats its very purpose and the benefit cannot be denied on a mere technicalities or on the basis of an insignificant omission. As regards the time bar it was contended by the Ld. Counsel that the respondents were working under physical control during the relevant period and declared in their classification list the prominent marking of the letter `ADV/Hand Carts' has been made on every such tyres and tubes and these classification lists were duly approved by the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emsp; XX Explanation :- (Notification No. 14/86-C.E., dated 7-2-1986.)" 7. After coming into force of new Tariff that is Central Excise Tariff Act, 1985 the Government issued the identical Notification No. 188/86 which so far as relevant reads as follows :- "In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts the goods of the description specified in Column (3) of the Table hereto annexed and falling under the Heading or sub-Heading Nos. of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), as are specified in the corresponding entry in column (2) of the said Table, from so much of the duty of excise leviable thereon under Central Excises and Salt Act, 1944 (1 to 1944), as is in excess of the amount calculated at the rates specified in the corresponding entry in column (4) of the said Table, subject to the conditions, if any, laid down in the corresponding entry in column (5) thereof. TABLE Sl. No. Heading or Sub - heading No. Description of the goods Rate of duty Conditions (1) (2) (3) (4) (5) 1. 4013.99 Inner tubes of rubber for tyres of a kind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons issued under the Central Excises and Salt Act, 1944 are to be interpreted came up before the Apex Court in the case of Union of India v. Wood Papers Ltd. - 1990 (47) E.L.T. 500 (SC) wherein it was held that - "Literally exemption is freedom from liability, tax or duty. Fiscally it may assume varying shapes, specially, in a growing economy. For instance tax holiday to new units concessional rate of tax to goods or persons for limited period or with the specific objective etc. That is why its construction, unlike charging provision, has to be tested on different touchstone. In fact an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative intention or on economic justification of inequitable burden or progressive approach of fiscal provisions intended to augment State revenue. But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly. Truly speaking, liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t quality whereas the tyres and tubes designed for power driven vehicles should be of the highest quality and, therefore, the exemption has been granted under the said Notification to the tyres and tubes which are specially designed for use of animal driven vehicles (ADV) or hand carts and to mark these tyres with a durable prominent letters "ADV" is a procedural requirement to distinguish these tyres and tubes especially designed for use of power driven vehicles. In the instant case there is no dispute that there was a durable prominent marking of the letters "For Hand Carts" on every such tyres and tubes specially designed for use of hand carts instead of the marking with the letters "ADV". These appears to be a sufficient compliance of the said requirement. In this view of the matter we are supported by the ratio of series of judgments rendered by this Tribunal. To name a few, in the case of Krishna Sahakari Sakhar Karkhana Ltd. v. Collector of Central Excise, 1991 (55) E.L.T. 411, it was held that failure to fulfil the condition of Proviso (b)(ii) of the Notification No. 231/87-C.E. providing that credit shall be taken only in respect of such Ethyl Alcohol for which the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise, Bombay-II - 1981 (17) E.L.T. 896. 14. In the light of the above discussions we hold that the respondents were rightly entitled for the benefit of the said Notification. 15. Besides, we find that show cause notice dated 27-5-1986 demanding duty from 13-3-1985 to 31-3-1986 was issued to the appellants invoking the larger period of 5 years. From the record we find that in all the relevant classification lists it was specifically mentioned that permanent marking of the letter `ADV'/`Hand Carts' had been made on every such tyre and tube specifically designed for use of animal driven vehicles or hand carts. These classification lists were duly approved by the authorities concerned. On these facts the Collector has held that the facts alleged to be suppressed by the appellants in the show cause notice were in the knowledge of the Department and, therefore, the demand was time barred. These findings have not been seriously challenged in the Memorandum of Appeal or during the hearing. What was vehemently contended was that even though the extended period of 5 years cannot be invoked, the Collector's decision that the show cause notice is time barred is not sustainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax payers is within the plain term of the exemption it cannot be denied its benefit by claiming in aid any supposed intention of the exempting authority." 20. Even if it is assumed that the language of the notification is deficient, in the facts of the case it would not be permissible for the Tribunal to take a view favourable to the assessee since in the case of Assistant Collector of Central Excise & Customs, Pondichery v. New Horizon Sugar Mills (P) Ltd., reported in 1980 (6) E.L.T. 10 (Madras), the Madras High Court has held that "If the lang- uage of the notification is deficient to bring out the real intention of the authors who issue the notification it is not for the court to supply the deficiency." 21. On the question of limitation I agree with the findings of the learned Member (Judicial). 22. The appeal is disposed of in the above terms. Dated 3rd January, 1994 Sd/- (P.K. Kapoor) Member (T) DIFFERENCE OF OPINION 23. Since there is a difference of opinion between the Hon'ble Members comprising the Bench, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that the condition for specific marking on the tyres and tubes was stipulated in the exemption notification itself, and it was very much a substantial requirement for eligibility of the exemption. The exemption notifications had to be construed strictly. In the circumstances of the case, the benefit for exemption could not be given to the respondent company. The learned JDR pleaded for the order proposed by the learned Member (T). 28. I have carefully considered the matter. The respondent had clarified that the specifications for the two type of tyres - one for the hand carts and the other for the animal drawn vehicles (ADV), were different. They were engaged in the manufacture of tyres/tubes both for hand carts and for the animal drawn vehicles. For ADV tyres, there was a durable prominent marking of the letters "ADV" on each such tyre. The tyres for hand carts were durably and prominently marked as "For Hand Cart" so that the tyres for ADV may not find their way to the users of hand carts, or vice versa. it is seen that there is no allegation that the tyres and tubes under dispute were not specifically designed for use of hand carts. There is nothing to show that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full un-conditional exemption from duty. To deny the exemption in the present case only on the ground that the tyres/tubes were marked `for hand cart' in place of requirement of marking `ADV', although technically right, may not be reasonable, and in the present case will lead to un-just results and discrimination. The demand of central excise duty for past clearances in such a situation could hardly be justified, particularly, when the initial clearances were made with the approval of the Department. In this connection reference may also be made to the Supreme Court's decision in the case of Formica India Division v. Collector of Central Excise, 1995 (77) E.L.T. 511 (SC). 32. The Central Excise Exemption Notification No. 16/41-C.E., dated 1-4-1941, which provided exemption to tyres specially designed for use on hand carts was issued when tyres were brought under excise control w.e.f. 1-4-1941. It appears from the amending Notification No. 153/80-C.E., dated 11-10-1980 that the provision regarding marking was not there initially and was added only w.e.f. 1-4-1981. 33. In the case of Hansraj Gordhandas v. Asstt. Collector of Central Excise, Surat - 1978 (2) E.L.T. (J 35 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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