ORDER
Shiben K. Dhar, Member (T)
1. This Revenue Appeal is directed against the Order-in-Appeal dated 23-3-1988. The respondents, manufacturers of electricals storage batteries, had opted for Modvat credit during 1986. Through their letter dated 24-4-1986, however, they opted out of the scheme and claimed small-scale exemption under Notification 175/86 as amended. A show cause notice dated 29-10-1986 was issued to the respondents demanding duty from 1-4-1986 onwards at appropriate rate on the ground that they could not have opted out of the Modvat scheme and claimed exemption. Asstt. Collector held that they were not eligible for the full exemption under the first slab under the Notification 175/86 and as a consequence demanded duty on the clearance of electric storage batteries at appropriate rate indicating the rate as 6.25% ad valorem from 1-4-1986 and 15% ad valorem from 2-4-1986. Collector (Appeals) set aside this order on the question only of non-quantification of the demand. He relied upon the judgment of the Bombay High Court in case of J.B.A. Printing Inks Ltd. v. Union of India & Others – 1980 E.L.T. 121 (Bom.). Revenue have come in appeal against this order of the Collector on the ground that mere non-specification of the amount demanded in show cause notice which otherwise gives details of the basis for raising demand cannot be said to have caused serious hardship to the party so as to render the show cause notice and subsequent order as not-maintainable.
2. Arguing for the Revenue, the ld. DR submits that Division Bench of Delhi High Court in case of Hindustan Aluminium Corporation Ltd. v. Collector of Central Excise – 1981 (8) E.L.T. 642 (Del.) held that the purpose of the show cause notice is to indicate the amount of duty payable by the petitioner and, therefore, if the show cause notice indicates a difference between duty demanded and the duty not paid that would be sufficient compliance of Rule 10. But in case the amount of duty is not specified, the petitioner should enquire the amount of duty payable from the Department before giving a suitable reply to the show cause notice. The show cause notice indicated basis for demanding the duty, and therefore, mere non-quantification of the amount cannot vitiate the proceedings.
3. Arguing for the respondents, the ld. Advocate submits that the basic question of law is already settled. Tribunal andd the Courts have held that a assessee can opt out of Modvat during the financial year and opt for an exemption which is beneficial to him. In this connection, he cites the Order No. 202/93-C of Tribunal in case of Collector of Central Excise, New Delhi v. Goela Enterprises which relied upon the judgment of Calcutta High Court in case of Bengal Cardboard Ind. & Printers (P) Ltd. v. Asstt. Collector of Central Excise – 1992 (62) E.L.T. 684 (Cal.). He, therefore, submits that even if it is admitted that mere non-quantification of demand would not vitiate the proceedings, the basic question of law is already in their favour and even if the matter is remanded, it will be a futile exercise since Collector (Appeals) while examining the case would necessarily have to follow the Tribunal’s orders cited earlier.
4. We have heard both sides. The show cause notice clearly indicates that the assessee opted for Modvat scheme for the financial year 1986-87 and filed a classification list dated 31-3-1986. Vide their letter dated 24-4-1986, however, they have opted out of Modvat scheme and filed a revised classification list dated 24-4-1986 to avail fullexemption under Notification 175/86 as amended. The show cause notice alleges that Notification 175/86 as amended by Notification 216/86, dated 2-4-1986 provides for an integrated method of computation of value of clearances made in a financial year and if a manufacturer availed Modvat already at the beginning of the financial year in respect of the specified goods, he will have the option to go out of the Modvat and avail full exemption only in the next financial year. The respondent, it was alleged, have to pay duty from 1-4-1986 onwards at appropriate rate for the clearance.
5. In case of Hindustan Aluminium Corporation Ltd. supra, Delhi High Court held that the purpose of the show cause notice is to indicate the amount of duty payable by the assessee, and therefore, if the show cause notice indicates the difference between the duty demanded and the duty not paid that would be sufficient compliance of Rule 10. In such cases, where amount is not specified, the petitioner can enquire the amount of duty payable from the department before giving a suitable reply to the show cause notice.
5.2. Here we find that a clear basis was indicated in the show cause notice to put the respondents on notice as to why the difference in duty payable and not paid ought to be paid. In this view of the matter, we are of the view that this would not vitiate the proceedings.
6. Coming now, however, on the merits of the case, we find that Calcutta High Court in case of Bengal Cardboard Ind. & Printers Pvt. Ltd. v. Asstt. Collector – 1992 (62) E.L.T. 684 (Cal.) held that the question where the petitioner could enjoy benefit as small-scale industry or enjoy benefit in Modvat scheme is purely a matter for assessee to decide. The Calcutta High Court judgment has been based on the earlier decision of the Tribunal in case of Brooks Industries v. Collector of Central Excise -1989 (41) E.L.T. 183 (Tribunal). Tribunal in its Final Order No. 202/93-C in case of Goela Enterprises followed the ratio of the judgment in case of Bengal Cardboard Ind: & Printers (P) Ltd. supra while discussing similar issue under Notification 216/86, dated 2-4-1986 and held that it will be permissible for the assessee to opt out of the Modvat Scheme.
7. Since on merits, the case is already covered against the Revenue, we agree that even if we hold that non-quantification of the demand would not vitiate the proceedings, no useful purpose will be served by merely remanding it on that ground since Collector is bound by the precedent decision on the subject. We also find that so far as Asstt. Collector’s order goes, it arrived at a finding that the respondents are not eligible for full exemption under the first slab of Notification 175/86 and as a consequence duty is demanded on the clearances of electric storage batteries from 1-4-1986 to the relevant period. Since we have held that respondents are eligible to opt out of Modvat scheme, the quantification as such would not be relevant factor. In making these observations, however, we are leaving open the question of adding clearances while working under Modvat Scheme to clearances made while claiming exemption under Notification 175/86 as amended. In other words, the manner how first slab is to be determined is left to the authorities below who shall pass suitable orders, if considered necessary.
8. In the result, the Revenue (Appeal) is dismissed.