ORDER
G.R. Sharma, Member (T)
1. Arguing the stay application, Shri Harbans Singh, the ld. Advocate submitted that duty amounting to Rs. 17,75,904/- has been held payable as additional excise duty on goods exported during the period December 1994 to April 1995 under Bond without payment of duty in terms of the provisions of Rule 13 of the Central Excise Rules and that Commissioner has also imposed a penalty of Rs. 5.0 lacs. The ld. Counsel submitted that the applicants had exported yarn manufactured in their factory under provisions of Rule 13 of the Central Excise Rules, 1994; that the Central Excise Officers allowed removal of yarn and the Customs Authorities also allowed export therein without any objection. The ld. Counsel submitted that the Department has alleged that the provisions of Rule 13 are applicable only to duty of excise chargeable under the CESA, 1944 and are inapplicable to Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. He submits that Section 3(1) of the 1978 Act clearly provides that additional duty of excise is chargeable if duty of excise is assessed on the textile and textile articles under the Central Excises and Salt Act, 1944; that the rate of additional duty of excise is 15% of the amount of duty chargeable under the CESA, 1944; that if the goods are exported under Bond in accordance with the provisions of Rule 13 and no duty is chargeable under the Central Excises and Salt Act, 1944 read with any notification in relation to the said duty, no additional duty of excise under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 could be chargeable; that by virtue of Section 3(1) of the Additional Duties of Excise Act, 1978, the provisions of the Central Excises and Salt Act and the rules made thereunder get incorporated in the former Act and are applicable to the levy and collection of additional excise duty under the Additional Duties of Excise Act, 1978. The ld. Counsel submits that the issue in their case is squarely covered by the judgment of the Apex Court in the case of Ujagar Prints v. U.O.I. and Ors. reported in 1988 (38) E.L.T. 535 and the judgment of the Hon’ble Gujarat High Court in the case of Maheshwari Mills reported in 1992 (58) E.L.T. 9 and also the judgment of the Hon’ble High Court of Calcutta in the case of Webel Video Devices Ltd. v. C.C.E. reported in 1993 (63) E.L.T. 63. The ld. Counsel also cited and relied upon the decisions in the cases reported in 1988 (35) E.L.T. 252 (Guj.) : 1994 (71) E.L.T. 1049 (Tribunal) : 1994 (73) E.L.T. 660 (Tribunal) : 1996 (81) E.L.T. 563 (Tribunal). Summing up his arguments, the ld. Counsel submitted that their case was fully covered by the ratio of the judgment of the Hon’ble Calcutta High Court specifically and by the ratio of the other judgment in general and therefore, prayed that pre-deposit of duty and penalty may be waived.
2. Shri Satnam Singh, the ld. SDR appearing for the respondent Commissioner submits that additional duty is charged under 1978 Act; that in the instant case, yarn was exported under the provisions of Rule 13 of the Central Excise Rules, 1944; that Rule 13 is a part of the Rules framed under the Central Excise Act, 1944; that Rule 13 does not speak about additional duties of excise which are levied under a different Act. He submits that since additional duties on yarn are leviable under the 1978 Act and since there is no specific provision in 1978 Act for exempting the additional duties on yarn therefore, he submits that the lower authorities have rightly demanded a duty and imposed a penalty. Reiterating the findings of the lower authorities, the ld. DR prays that the stay petition may be dismissed.
3. Heard the submissions of both sides. The [controversy] is about Section 3 of the Additional Duties of Excise Act, 1978. The relevant Section reads as under :
“3. Levy and collection of additional duties of excise on certain textiles and textile articles :- (1) When goods of the description mentioned in the Schedule chargeable with a duty of excise under the Central Excises and Salt Act, 1944 (1 of 1944), read with any notification for the time being in force issued by the Central Govt. in relation to the duty so chargeable (not being a notification providing for any exemption for giving credit with respect to, or reduction of duty of excise under the said Act on such goods equal to, any duty of excise under the Customs Tariff Act, 1975 (51 of 1975) already paid on the raw materials used in the production or manufacture of such good), are assessed to duty, there shall be levied and collected a duty of excise equal to fifteen per cent of the total amount so chargeable on such goods.
(2) The duties of excise referred to in Sub-section (1) in respect of the goods specified in the Schedule shall be in addition to the duties of excise chargeable on such goods under the Central Excises and Salt Act, 1944 (1 of 1944), or any other law for the time being in force and shall be levied for the purpose of Union and the proceeds thereof shall not be distributed among the States.
(3) The provisions of the Central Excises and Salt Act, 1944 (1 of 1944), and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, so far as may be, apply in relation to the levy and collection of the duties of excise leviable under this Section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules.”
We find that the issue of additional duties was discussed in the Maheswari Mills Ltd. by the Hon’ble Calcutta High Court in the case of Webel Video Devices Ltd. v. C.C.E. reported in 1993 (63) E.L.T. 63. Since the case of Webel Video Devices is identical to the case before us, we would like to reproduce the observations of the Hon’ble Calcutta High Court in Paras 2, 4 and 12.
2. The Central Excise Act was amended by inserting Section 49, which is to the following effect :
’49. Additional duties of Excise (Television Sets). – (1) In the case of goods specified in the Fifth Schedule, being goods manufactured in India, there shall be levied and collected as an additional duty of excise an amount calculated at the rate set forth in the said Schedule.
(2) The additional duties of excise referred to in Sub-section (1) shall be in addition to any other duties of excise chargeable on such goods under the Central Excise Act or any other law for the time being in force.
(3) The provisions of the Central Excise Act and the rules made thereunder, including those relating to refunds and exemptions from duties shall as far as may be, apply in relation to the levy and collection of the additional duties of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of duties of excise on such goods under that Act or those rules, as the case may be.
(4) The additional duties of excise leviable under Sub-section (1) shall be for the purpose of the Union and proceeds thereof, shall not be distributed among the States.’
4. The case of the petitioner is that under the aforesaid Rule.13 of the Rules, goods can be exported without payment of duty against execution of bond. In case such goods cleared for export are not in fact exported then full duty becomes payable thereon. Rule 13 of the Rules, therefore, provides that duty would not be levied and/or collected in respect of the goods actually exported. The petitioner has stated that in any event the said Rule 13 provides for exemption from duty in respect of the goods actually exported. Rule 14 of the Rules is in aid of Rule 13 and provides for execution of the general bond. In the circumstances, the provisions of Rules 13 and 14 of the Rules are also applicable in respect of additional duties of excise leviable under Section 49(3) of the Act.
12. Section 49(3) of the Act itself makes it clear that the provisions of the Act and Rules relating, inter alia, to exemption of Central Excise will apply to additional duty of excise which was being levied. Therefore, if there is any Rule exempting imposition of Central Excise, then such rule should also apply to levy of additional excise. The exemption should also be granted to manufacturer from payment of additional duty of excise.”
4. We find that the provisions of the 1978 Act are identical to the provisions of Section 49 of the Finance Act, 1985. We also observe that in the instant case, the goods were exported under the provisions of Rule 13 of the Central Excise Rules, 1944 without payment of duty against the execution of Bond. It the goods are cleared for export and are not, in fact, exported, then full duty was payable thereon. Rule 13 of the Rules, therefore, provides that full duty would be levied and collected in respect of the goods actually not exported. We also observe that Rule 13 provides for exemption from duty in respect of goods actually exported. Rule 14 of the Central Excise Rules is in aid of Rule 13 and provides for execution of a general Bond. In the circumstances, the provisions of Rule 13 of the Rules are applicable in respect of additional duties under the 1978 Act. We also observe that Section 3(3) of the Act itself makes it clear that the provisions of the Act and the Rules inter alia relating to exemption of Central Excise will apply to additional duty of excise under the 1978 Act. If therefore, there is any rule exempting the imposition of Central Excise duty then such rule should also apply to levy of additional excise under the 1978 Act. In this view of the matter, we find that there is prima facie a strong case in favour of the applicants. In this view of the matter, pre-deposit of duty and penalty is waived.
The stay petition is therefore, allowed.