ORDER
M. Santhanam, Member (J)
1. Review show cause notice issued under Section 37 36(2) of the Central Excises and Salt Act, by the Government of India has been transferred to the Tribunal and is being treated as an appeal.
2. The review by the Government is against the orders of the Appellate Collector, Central Excise, Calcutta dated 31-7-1981. The entire dispute relates to the demands raised by the Superintendent in the RT 12’s for the months of April, 1975 to July, 1975. The respondents showed payment of duty cleared on electrical grade aluminium manufactured by them at 30% ad valorem availing the benefit of Notification 42/75 dated 1-3-1975 as amended by Notification 111/75 dated 30-4-1975. The demand for duty amounting to Rs. 16,34,250/- was confirmed by the Assistant Collector in his order dated 6-1-1978. The Assistant Collector was of the view that the respondents had not satisfied the conditions of the Notification. The appeal was filed to the Appellate Collector. Before the Appellate Collector (Appeals) respondents produced six documents regarding the allotment of EC Grade Aluminium Ingots for the manufacture of high tension Aluminium Cables. The Appellate Collector was of the view that though the respondents had not filed classification list. On the issue of Notification 42/75, in view of the allotment orders, he extended the benefit of doubt and allowed the appeal. He was of the view that the respondents were entitled to the concessional rate of duty under Notification 42/75.
3. In the review show cause the Government are tentatively of the view that inasmuch as the burden of proof was on the respondents to show that they were governed by the provisions of the Aluminium (Control) Order, the respondents have failed to discharge the onus. When the respondents were not projecting the correct picture and the facts, mere production of some correspondence would hot appear to be sufficient to hold that the-respondents had satisfied all clauses of the orders.
4. Shri H.L. Verma, SDR submitted that the onus was on the respondents to establish that they were eligible for the concessional rate of duty. He drew our attention to the documents filed by the respondents before the Appellate Collector and urged that most of them were regarding the allotment of raw material. He argued that Notification 42/75 required the manufacturers to establish that the aluminium was required by the Central Government, to be supplied and distributed in accordance with the provisions of the Aluminium (Control) Order, 1970. He contended that in the absence of such proof or declaration as contemplated under the Notification the Appellate Collector was not justified in allowing the appeal.
5. Shri D.P. Anand, Consultant appeared for the respondents. He reiterated the contentions raised by him in the reply to the show cause notice issued by the Government. The salient features of his arguments are as follows. The show cause notice issued by the Government was misconceived, unjustified and without any legal basis because the allotment receipt and disposal of the subject goods were all made in terms of the Aluminium (Control) Order, 1970 and the respondents were fully eligible for the concessional rate of duty. The respondents manufacture EC Grade Aluminium Wire Rods from aluminium ingots supplied to them by Primary Producers of aluminium. The ingots used to be supplied to the respondents by the Primary Producers as per the allocations made by the Government of India under Clause 5 and 5A of the Aluminium (Control) Order. The supply and disposal of the goods were as per the directions of the Government of India and as indicated in their orders. In all clearance documents the goods have been declared as Electrical Conductor Grade. Since the supply and distribution was strictly controlled by the Central Government, the respondents are entitled to the concessional rate of duty, under Notification 42/75. The Appellate Collector was satisfied with the documentary evidence produced by the respondents and accepted the fact that the Receipts and Despatches of aluminium products were made as per the provisions of the statute. if the proof produced was inadequate or insufficient, the notice to show cause should indicate the nature and type of evidence required to establish their contentions. The documents produced by the respondents prove the receipt of EC Grade ingots, their manufacture into EC Grade Wire Rods and their disposals were strictly controlled by the provisions of the Control Order. The respondents also have other evidence such as allotment orders issued by the Government of India, Periodical statements, invoices etc. As the Appellate Collector was quite satisfied with the documents referred to in the order, the respondents have not produced the other documents. He, therefore, urged that the respondents have conformed to the requirements of Notification 42/75 and the notice should be quashed.
6. For the purposes of understanding the controversy, it is necessary to reproduce Notification 42/75 dated 1-3-1975.
“In exercise of the powers conferred by sub-rule (i) of rules 8 of the C/Excise Rules, 1944, the C/Government hereby exempts aluminium falling under items No. 27 of the first schedule to the Central Excises and Salt Act, 1944 (1 of 1944) declared by the manufacturer to be of electrical conductor grade and required by the Central Government to be supplied and distributed in accordance with the provision contained in the aluminium (Control) Order, 1970, as in force for the time being read with the notification issued thereunder, from so much of the duty of excise leviable thereon as is excess of 30 per cent ad valorem.”
This notification has been amended by Notification 111/75 dated 30-4-1975. But we notice from the arguments of the respondents that the amended notification will not apply to the facts of the present case because the same dealt with manufacturers not governed by the provisions of the Aluminium (Control) Order, 1970. In this case all the products are stated to be subject to the provisions of the Control Order. Hence suffice to say that notification 111/75 is an extension of the concession in earlier notification to manufacturers of aluminium who are not governed by the provisions of the Control Order. It is a common case that the appellants manufacture aluminium products and claim concession under exemption notification 42/75. This notification contemplates two main conditions:-
(i) The declaration by the manufacturer that the aluminium falling under Item 27 to be of electrical grade; and
(ii) The same was required by the Central Government to be supplied and distributed in accordance with the provisions contained in the Aluminium (Control) Order, 1970.
In regard to the electrical grade of the products, the respondents have themselves noted in the RT 12 that the goods cleared were electrical grade. The assessment also proceeded on the basis that the goods cleared were of EC Grade. If further proof is required, we find from the licence granted to the respondents that they manufacture EC Grade Aluminium WireRods. The Ministry of Steel & Mines have also sent the communication dated 26-5-1972 to that effect. On 13-5-1974 the Government of India, D.G.T.D. (Engineering Export Promotion Cell) have indicated the allotment of 60 tonnes EC Grade of aluminium to the respondents. On 26-6-1974, the Heavy Electrical Directorate has called for detailed statement of pending orders in regard to the electrical grade aluminium to be allocated to the respondents from the primary producers. On 1-8-1974, a communication was sent to the respondents regarding the allocation of EC Grade aluminium for the period 1974-75. On 8-8-1974, the Central Water and Power Commission have addressed the respondents regarding the allocation of 510 M.Tons EC Grade Aluminium reserved specifically for manufacture of conductors. On 9-5-1975 the Government of India have addressed a communication to the respondents alloting a quantity of 1172 tonnes of EC Grade aluminium and also indicate to whom the supply is to be made. From these documents it is seen that the respondents are the manufacturers of EC Grade aluminium products. But the question still arises whether they have given such a declaration as contemplated under Notification 42/75. The second limb of the Notification contemplates supply and distribution as required by the Central Government under the provisions of the Aluminium (Control) Order. Column 5 stipulates that the Central Government may by Notification in the Official Gazette direct the producers or manufacturers or dealers shall sell aluminium only to such person or persons or companies as may be specified by the Controller or such other officers as may be authorised by the Central Government in this behalf. The respondents venture to make out that the documents filed by them would establish that that the supplies and distributions were regulated as per the conditions of the Control Order. But as rightly pointed out by Shri H.L. Verma the six documents relied on by the respondents and produced before the Appellate Collector do not contain adequate proof for the entire quantity of aluminium covered in the RT 12. The documents dated 13-5-1974 speaks only of allocation of raw material to the respondents. The communication dated 26-6-1974 makes mention of a detailed statement to. be furnished. The 3rd document dated 1-8-1974 refers to allocation of EC Grade Aluminium to the respondents. Of course, there is a mention in this document that the quantity of aluminium had been placed at the disposal of the Central Water & Power Commission for release in favour of the respondents. The letter dated 8-8-1974 makes mention of allotment of raw material from certain primary producers. The respondents have been asked to furnish progress reports in regard to quantity of conductors supplied against each order. There is a mention of order placed by Punjab State Electricity Board. On 9/14-5-1975 a communication has been sent indicating specific orders for conductors for priority transmission lines. It is seen that six documents refers to State Electricity Board, Punjab State Electricity Board, West Bengal and Government of Manipur. EC Grade Aluminium for the purpose have been released from Bharat Aluminium Co. Ltd., Hindustan Corporation, Madras Aluminium Co. etc. Para 2 (d) of this letter makes mention of the programme being approved by the Controller of Aluminium and names being approved by the Controller. Prima-facie this document indicates that the respondents have been governed by the provisions of the Aluminium (Control) Order in respect of this supply. Shri D.P. Anand urged that the supplies and distributions of the products of the respondents were regulated under the provisions of the Control Order. But it is a matter of proof by the respondents. They have to satisfy the department that the quantity of EC Grade Aluminium products manufactured by them were supplied and distributed in accordance with the allotment orders’, given by Central Government under the provisions of the Aluminium (Control) Order. In their reply to the review show cause notice (Paragraph 21.3), the respondents have stated that they have plenty of other evidence also in that connection in the form of other allotment orders issued by the relevant Government authorities, periodical statements, bills and invoices and other relevant correspondence apart from the accounts and registers.
7. The Appellate Collector has reached the conclusion that the respondents were entitled to the benefit of Notification 42/75 mainly on the basis of six documents. We are of the view that this finding is not justified because most of the documents are only in regard to the allotment of raw materials and the one or two documents which refer to the supply and distribution, do not cover the entire quantity of aluminium products manufactured. At the same time we cannot ignore that the respondents should have been governed by the provisions of the Aluminium (Control) Order and should by producing relevant allotment orders, invoices and other documents, establish conclusively that the products manufactured by them, were supplied and distributed in accordance with the provisions of the Aluminium (Control) Order and as required by the Central Government.
8. In the circumstances of the case, we are of the view that the impugned order should be set aside. At the same time, in the interest of justice, we remand the matter to the Appellate Collector for re-decision of the matter in the light of the observations contained in this order. The respondents would be at liberty to produce necessary documentary evidence in support of their contentions that they are entitled to the benefit of Notification 42/75. The appeal is disposed of accordingly.