TMI Blog1994 (1) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... cified goods and of complete exemption from duty for other specified goods. We find in this connection that there is a decision by the Special Bench in Kharia Cement Works v. Collector of C. Ex. reported in 1989 (42) E.L.T. 696 (Tri.) = 1989 (24) ECR 37. That was case where the manufacturer had two factories, where different products were manufactured by them. For the goods manufactured and cleared from their Kanpur factory they availed Modvat benefit. They were, on that score, held to be ineligible for full exemption for their goods cleared from the Kharia factory. The relevant paragraphs of this order are extracted below : Shri Bhandare, learned Counsel for the Appellants, drew our" 9. attention to sub-clauses (i) and (ii) of clause (a) of para 1 of Notification No. 175/86 reading as follows : in the case of the first clearances of the specified goods up to an aggregate value not exceeding rupees seven and a half lakhs - in a case where a manufacturer avails of the credit of duty paid on inputs used in the manufacture of the specified goods under Rule 57A of the said Rules, from so much of the duty of excise leviable thereon which is specified in the said Schedule [read wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cale sector. Therefore, submitted the learned counsel, the intention could not have been to deny even the exemptions available prior to the budget. In reply, Shri Sunder Rajan, learned DR, submitted that the10. exemption notification should be construed strictly. The notification in question made a clear distinction between manufacturers and factories. The supposed intentions would not be relevant in construing the terms of the notification. He, further submitted that clauses (a)(i) and (a)(ii) of para 1 of the notification were not mutually exclusive. The option was in respect of the manufacturer and not in respect of the goods. Replying on the reasoning adopted by the Collector, Shri Sunder Rajan prayed that the appeal should be dismissed. We have carefully considered the submissions of both sides and11. perused the record. The relevant portions of the notification in question have12. been already set out. Clause (a) (i) sets out the extent of exemption in the case of a manufacturer who avails himself of the facility of utilisation of input duty credit under Central Excise Rule 57A. Sub-Clause (ii) provides that in any other case (which would necessarily mean in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on sought to be put on the provision by the learned counsel for the appellants is not tenable." We are in respectful agreement with this view. In the present case, the dispute relates to a manufacturer clearing different goods from the same factory. This decision was apparently not brought to the notice of the South Regional Bench when they decided the two cases cited by the learned counsel, Shri Choudhury. The Special Bench order in Faridabad Tools Pvt. Ltd. followed these decisions, their observation therein being that the matters are apparently covered by the two judgments cited by the ld. Counsel. In view of the divergent decisions on the questions involved, we feel that this should be referred to the Hon'ble President of the Tribunal for constituting a larger Bench for resolving the difference." 2.Arguing for the appellants, Sh. K.P. Choudhury, the ld. Counsel, submitted that two decisions of Swaraj Paint Industries v. Collector of Central Excise - 1991 (52) E.L.T. 594 and Abhilash Rubber Products v. Collector of Central Excise - 1991 (56) E.L.T. 168 rendered by the South Regional Bench of the Tribunal, which had been subsequently followed by the Special Bench `B1' in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MODVAT Credit under Rule 57A for one item and he is called upon to pay the price for that by way of payment of higher rate of duty in terms of Notification 175/86 on goods in respect of which he is not claiming any MODVAT Credit, Sub-Clause (a)(i), therefore, has to be read only in the context of the gods for which MODVAT Credit is availed of and not for other goods." 4.On the other hand, the ruling given by the Special Bench in the case of Kharia Cement Works, already extracted (supra), is on the reasoning that Notification has to be read as a whole and sub-clauses (i) (ii) have to be construed harmoniously. The decision in the Kharia Cement Works case is a more reasonable interpretation of the Notification for the reason that the exemption in the Notification envisaged for the specified goods accrues to them through the instrumentality of the manufacturer. The Notification clearly recognised two categories of manufacturers - those who avail of Modvat Credit and those who do not. The level of exemption is clearly fixed at different levels for the manufacturer who avails of Modvat Credit under Rule 57A on inputs and for other manufacturers who do not opt for the Modvat Scheme. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
