ORDER
S.K. Bhatnagar, Vice President
1. This is an appeal filed by the Department against the order of Collector of Central Excise (Appeals), Chandigarh dated 21-5-1991.
2. Learned Departmental Representative stated that the respondents had filed three refund claims for Rs. 32,200/-, Rs. 4,29,954/- and Rs. 2,15,628/-in respect of the duty paid by them during the period Feburary, 1986 to March, 1986, to June, 1986 and July, 1986 on Auto Tyres on the ground that they being a new manufacturer of moped tyres, were entitled to exemption from 50% of the duty as provided under Notification No. 231/85, dated 11-11-1985 since their clearances during the preceding financial year were of less than Rs. 50 lakhs. The respondents were issued a show cause notice in de novo adjudication asking them to explain why their claims should not be rejected on the grounds that in para 2 & 3 of Notification No. 231/85, dated 11-11-1985, the expression ‘said goods’ referred to all tyres, tubes and flaps falling under erstwhile Tariff Item 16 of the old CETA, 1985 Notification No. 231/85, dated 11-11-1985. The superseded Notification No. 65/81 which governed the exemption to manufacturer of tyres upto 10-11-1985 and this notification unambiguously mentioned p the terms the ‘said goods’ referred to tyres of motor vehicles only whereas under Notification No. 231/85-C.E., the clearance of all tyres, tubes and flaps falling under erstwhile T.I. 16 or Chapter 40 of the CETA, 1985 are to be taken into account irrespective of chargeability to duty on such goods. In this way, their aggregate clearances during the preceding financial year had exceeded to Rs. 2 crores for the purpose of Notification No. 231 /85, and as such, the refund was not admissible. The A.C. rejected the refund claim on the ground that conditional benefits/concessions as envisaged under Notification No. 231/85- C.E., dated 11-11-1985 were not admissible as the clearances of tyres and tubes were above Rs. 2 crores during the preceding financial year. The Collector (Appeals), however, set aside the order of the A.C. and accepted the appeal with consequential relief.
3. It was also his contention that during the relevant period, the value of clearances of all excisable goods, whether dutiable and non-dutiable, were to be taken into account for the purpose of computing the ‘aggregate’ value of clearances (Rs. 2 crores) under Notification No. 231/85. The appellate authority was wrong in concluding that only the clearances of goods which were charged to duty were to be taken into account and value of cycle tyres and tubes attracting nil rate of duty were not liable to be included for the purpose of Notification 231/85.
4. It was also his submission that Explanation-I to Notification No. 231 /85-C.E. which provided for exclusion of cycle tyres and tubes attracting nil rate of duty for the purpose of computing the ceiling of Rs. 2 crores under the Notification No. 231/85, was inserted only by Notification 42/89 which came into operation with effect from 1-3-1989. Thus, it is clear that the benefit of this Explanation was available only for the prospective period i.e. with effect from 1-4-1989 onwards and was not available to clearances effected during November & December, 1985. The order-in-appeal has provided retrospective benefit of a statutory notification which is not within the competency of Collector (Appeals) or any other departmental authority. It is well-settled that when the words used by the legislature are unambiguous, no intention or meaning not flowing from the plain interpretation of the notification can be adduced or attributed.
5. Learned Counsel drew attention to the order-in-appeal and stated that the Collector has correctly interpreted the provisions and it is well-settled that in calculating the value limit for clearances under such notifications, the value of only dutiable goods is required to be taken into account and those which are non-dutiable in the sense and they were wholly exempt from duty were required to be excluded. It was, therefore, his submission that the amendment was only clarificatory in nature and therefore, the Collector was justified in applying it to the period in question in this case as well.
6. He further pointed out that at the original stage, the respondents had themselves conceded that the assessee was not entitled to the refund of their two claims amounting to Rs. 4,29,954/- and Rs. 2,15,628/- for the period 1986-87 and these claims have been filed only with the expectation that their clearances of the goods i.e. dutiable varieties during the said period were not likely to exceed the limit of 2 crores. But, the value of clearances of said goods actually exceeded the limit of 2 crores during the relevant financial year i.e. 1986-87. However, other claims had been pressed by them as according to them, the words ‘said goods’ cannot said to include these categories of tyres and tubes which are either exempted from whole of the duty of excise or charged to nil rate of duty. It was their contention that the value of such goods was within the prescribed limit of 2 crores and the order of the Collector (Appeals) may be upheld.
7. We have considered the above submissions. We observe that the language of the notification is important and there are several conditions which are required to be satisfied. For better appreciation, the Notification 231 /85-C.E., dated 11-11-1985 is reproduced below :
“In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 65/81- Central Excise, dated the 25th March, 1981, the Central Government hereby exempts tyres, tubes and flaps, falling under Chapter 40 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), (hereinafter referred to as “the said goods”), from so much of the duty of excise leviable thereon Under Section 3 of the Central Excises and Salt Act, 1944 (1 of 1944), as is in excess of the amount calculated at the rate of 50% of the rate of duty leviable on the said goods under the said Schedule, read with any other notification issued under Sub-rule (1) of Rule 8 of the said rules and in force for the time being:
Provided that the aggregate value of first clearances of the said goods, for home consumption at the concessional rate of duty in terms of notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 65/81-Central Excises, dated the 25th March, 1981, and at the reduced rate of duty as specified in this notification –
(i) by or on behalf of a manufacturer, from one or more factories; or
(ii) from any factory, by or on behalf of one or more manufacturers, shall not exceed, in either case, rupees fifty lakhs in any financial year:
Provided further that the exemption contained in this notification shall be applicable, –
(i) to a manufacturer if the aggregate value of clearances of tyres, tubes and flaps, falling under the said Chapter 40, for home consumption, by him or on his behalf, from one or more factories, during the preceding financial year, had exceeded rupees two crores;
(ii) if the aggregate value of clearances of the tyres, tubes and flaps, falling under the said Chapter 40, from any factory, for home consumption, by or on behalf of one or more manufacturers during the preceding financial year, had exceeded rupees two crores:
2. Where a manufacturer has not cleared the said goods in the preceding financial year or has cleared the said goods for the first time on or after the first day of August in the preceding financial year, the exemption contained in this notification shall be applicable to such manufacturer if he makes a declaration with the Assistant Collector of Central Excise that the aggregate value of clearances of the said goods by him or on his behalf, for home consumption, from one or more factories, during the financial year, is not likely to exceed rupees two crores and the aggregate value of clearances of the said goods cleared during the financial year does not exceed rupees two crores.
3. Where the said goods have not been cleared from any factory in the preceding financial year or have been cleared for the first time on or after the first date of August in the preceding financial year, the exemption contained in this notification shall not be applicable, if the aggregate value of clearances of the said goods from such factory, for home consumption, by or on behalf of one or more manufacturer exceeds rupees two crores during the financial year.”
8. It would be seen from the above that the first para itself requires this notification to be read with any other exemption notification; and, the first proviso specifically refers to the need for calculating the aggregate value with reference to Notification No. 65/81 as well as this notification (taken together). Therefore, monitory limits prescribed in the second proviso are required to be seen in the above context and calculated accordingly.
9. (The same is true of para 2 & 3 but, we are not concerned with the same here). It is clear from a plain reading of the above provision that insofar as this particular notification is concerned, the value of all excisable goods, whether dutiable or exempted, are required to be taken into account particularly in view of a specific mention of other exemption notifications and the explicit requirement to take them into account.
10. In view of the above clear position which is evident ex facie, the case law cited by the learned Counsel does not advance their cause and the cases are even otherwise distinguishable. .
11. Learned DR’s contentions have, therefore, strong force. He has rightly pointed out that Notification No. 42/89, dated 1-3-1989 being a fresh notification, was prospective in character and therefore, the benefit of the explanation was available only with prospective effect and was not available to clearances of the preceding period (November & December, 1985). The case law cited by him buttresses the Department’s case and insofar as prospective character of notification is concerned, the Hon’ble Supreme Court’s judgment reported in 1995 (77) E.L.T. 32 (S.C.) has been rightly relied upon. Therefore, learned Collector has erred in giving retrospective effect in this regard.
12. Before parting, we may make it clear that the term ‘clearance’ in Central Excise refers to removal of the goods from approved premises in accordance with law and it is immaterial whether the goods were dutiable or not during a particular period. There is no warrant for considering that the term ‘clearance’ refers to removal of only dutiable goods and not exempted goods, as inter alia, even exempted goods remain excisable goods even though by virtue of a particular notification, no duty may be payable during a particular period and in fact, Excise provisions contain rules and procedures not only in respect of declaration, storage and removal of dutiable or exempted goods but even other goods. Therefore, learned Collector’s order is apparently based on a mis-conception about ‘clearance’. In any eventuality, in a notification which specifically covers exemption to excisable goods and thereafter prescribes the limit referring explicitly to other notifications as well, all Excisable goods are required to be taken into consideration for the purpose of seeing whether the conditions prescribed therein were duly fulfilled. Similarly, clearance has nothing to do with sale or, for any consideration and refers to physical removal for whatever purpose and whatever consideration irrespective of whether sale was involved or not.
13. The impugned order is, therefore, set aside and the appeal is accepted.