TMI Blog2015 (6) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the condition that the exemption limit for items falling in one chapter will not exceed ₹ 20 lakhs. The appellant during 1.4.1991 to 28,6.1991 cleared goods falling under Chapter 84 of value of ₹ 19,97,947/- at nil rate of duty. Thereafter they started paying duty on the goods covered by Chapter 84. On 7.7.1991 they had cleared goods falling under Chapter 84. On 7.7.1991 they had cleared goods falling under Chapter 84 worth ₹ 23,10,202/- (both free of excise duty as also on payment of duty) and also goods falling under Chapter 87 worth ₹ 6,65,088/-. Thus, as on 7.7.1991, they had cleared goods of value of ₹ 30 lakhs. The appellant's claim was that they can clear goods free of excise duty upto ₹ 30 lakhs out of which they can clear goods worth ₹ 20 lakhs falling under Chapter 84 and another ₹ 10 lakhs for the goods falling under Chapter 87, even though in between they have cleared goods falling under Chapter 84 on payment of duty. The Revenue's case is that as per the wordings of Notification 175/86, once clearances of the specified goods cross the limit of ₹ 30 lakh, the benefit of Notification 175/86 cannot be exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as specified that if duty was paid on the final product, then all inputs would be free of duty. Subsequently, by Notification No. 164/90-C.E., dated 17th December,1990 the final product was exempted from duty. The Appellants issued a show cause notice dated 21st May, 1991 claiming duty and penalty on the basis that Notification No. 164/90-C.E., dated 17th December, 1990 exempted the final product from duty and therefore, duty was payable on the inputs. By an order dated 1st June, 1992 the Assistant Collector levied duty. This duty was levied not on the ground that the inputs were dutiable as the final product was exempted. The duty was levied on the ground that the clearances exceeded ₹ 30 Lakhs during the relevant period. This was not the basis of the show cause notice. It is well settled law that duty cannot be levied on a basis not set out in the show cause notice. The Collector (Appeals) set aside the duty by following the decision of the Tribunal in the case of Purushotham Goculdas Plywood Company v. CCE reported in 1990 (47) E.L.T. 30 (T). The decision holds that if the total clearance does not exceed ₹ 30 Lakhs then the benefit of the Notification can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944) and in force for the time being] as is equivalent to an amount calculated at the rate of 10% ad valorem; in any other case from the whole of (ii) the duty of excise leviable thereon: Provided that the aggregate value of clearances of the specified goods under sub-clause (ii) of the clause in respect of (any one chapter of the said Schedule), shall not exceed rupees fifteen lakhs; in the case of clearances (being the clearances of (b) the specified goods of an aggregate value not exceeding rupees sixty lakhs) immediately following the said clearances of the value specified in clause (a) from so much of the duty of excise leviable thereon which is specified in the said Schedule (read with any relevant notification issued under sub-rule (1) of Rule 8 of the said Rules) [or sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944) as is equivalent to an amount calculated at the rate of 10% ad valorem : Provided that the amount of duty of excise payable on the specified goods under sub-clause (i) of clause (a), or, as the case may be, under this clause, shall not be less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods which are subjected to concessional rate of duty (other than those specified goods which are wholly exempted from the duty of excise leviable thereon), under this notification, and received on or after the 1st day of April, 1988 in a factory where such goods are used as inputs in or in relation to the manufacture of final products in terms of the provisions of Section AA of Chapter V of the said Rules, the credit in respect of such inputs shall be allowed under Rule 57B of the said Rules, at the rate of duty applicable under this notification plus an amount calculated at the rate of 5% ad valorem, or at the rate of duty otherwise applicable but for this notification, whichever is less : Provided that nothing contained in this paragraph shall apply in respect of the inputs which are received in any factory after the 31st day of March, 1989. Nothing contained in this notification shall apply 6. to the clearances of specified goods for home consumption during the period beginning with the 25th day of March, 1986 and ending with the 31st day of March, 1986 (both days inclusive). The exemption contained in this notification shall 7. not apply to the specified goods whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearances of specified goods under above Clause 3(b) in respect of any chapter under Schedule to the Central Excise Tariff Act shall not exceed ₹ 15 lakhs. In the case of next clearances upto value of Rs. (5) 60 lakhs, the exemption shall be from so much of the duty leviable thereon specified in the Schedule read with any relevant Notification as is equivalent to an amount calculated at the rate of 10% ad valorem. However, the amount of duty payable on specified (6) goods under the above clause shall not be less than an amount calculated at the rate of 5% ad valorem. The same limits will apply to aggregate (7) value of clearances for specified goods for one or more manufacturers in any financial year subject to limit of ₹ 75 lakhs for the aggregate value of clearances from any factory by one or more manufacturers in any financial year. (8) The eligibility criterion is that the aggregate value of clearances of excisable goods for home consumption in the previous financial year should not have exceeded ₹ 150 lakh. The applicability clause is clause 4 of the Notification . 13. The exemption under notification is for specified goods cleared for home c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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