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1. The appellants filed classification list No. 3/83 dated 3-3-83 claiming approval of classification and rate of duty as shown below –
Sr.No Commodity T.I. No. Rate of Duty Relevant Notifica- BED SED tions ------------------------------------------------------------------------- 1. Plastic emulsion 14I(2)(iv) 18% 5% of 74/78 & 86/83 read paints BED with 219/77 2. Stiff paints 14I(3)(i) 13% -do- -do- 3. R.M. Paints 14I(3)(iii) 13% -do- -do- 4. Varnishes, French 14II(i) 13% -do- -do- Polishes etcetera 5. Bituminous/coaltar 14II(ii) 3% -do- -do- blacks 6. Aluminium paste 14I(1) (i) 8% -do- - 74/78 & 86/83 7. Primers 14I(3)(iii) 8% -do- 74/78 & 86/83 read with 219/77,220/77 -------------------------------------------------------------------------
The Assistant Collector after following usual procedure by order dated 7-4-83 denied benefit of notification No. 219/77 in respect of Serial No. 1 to 5, Notification No. 74/78 dated 1-3-78 and Notification No. 219/77 dated 15-7-77 in respect of primers – Serial No. 7 of the classification list and No. 74/78 in respect of Aluminium paste – Serial No. 6.
2. It would be seen that the Assistant Collector accepted the appellants claim for Serial No. 1 to 5 under Notification No. 74/78 dated 1-3-78 and No. 86/83 dated 1-3-83 but denied the same with respect to Notification No. 219/77 dated 15-7-77. In respect of primers Serial No. 7, he accepted the claim for benefit of Notifications No. 86/83 and No. 220/77 but denied the benefit under Notification Nos. 74/78 and No. 219/77. With respect to Item No. 6, he accepted the claim under Notification No. 86/83 but denied the benefit of Notification No. 74/78.
3. The order was upheld in appeal by the Collector of Central Excise (Appeals) Madras by order dated 23-8-83. Hence this appeal to the Tribunal.
4. At the hearing of the appeal, Sh. Prabhakar Sastry Advocate representing the appellant-manufacturer submitted that the Collector of Central Excise (Appeals) was in error in holding that the expression duty of excise occurring in the notification had to be read with reference only to the schedule and ignoring one exemption notification. He submitted that in the notifications referred to above, there was nothing to show that availing of benefit of exemption under one notification would disentitle the appellant to benefit of the other exemption notification. He argued that in absence of a prohibition to that effect in the notifications stipulating that availing of exemption under a notification would disentitle a manufacturer from benefit of exemption under the other notification, the appellants could simultaneously avail of benefit of more than one notification. Sh. Sastry in support of his arguments besides referring to definition of effective rate of duty in Finance Act 1983 to mean “duty specified in the first schedule read with any exemption notification for the time being in force” also relied on a decision of the Tribunal in Collector of Customs, Madras v. Bharat Heavy Electricals Ltd., Madras -1987 (31) E.L.T. 534 (Tri.). He also drew attention, besides other notifications, to 3rd proviso to the Notification No. 74/78 which provides that nothing contained in the notification shall apply to a manufacturer who avails of the exemption under notification No. 83/83-CE dated 1-3-1983 in respect of the goods to which the notification applies.
5. Shri R. Rajhans defended the impugned order.
6. It is, at this stage, necessary to refer to the material portions of the notifications referred to above. Notification No. 74/78-CE dated 1-3-78 is a concession to small scale manufacturers of pigments, colours, enamels and the like products depending on value of clearances not exceeding Rs. 1 crore and the value of plant and machinery installed in the industrial unit in which the goods are manufactured not exceeding Rs. 20 lakhs. The third proviso to this notification has already been referred to above. The opening para of this notification which is material for the present appeal is reproduced below –
“In exercise of the power conferred by sub-rule (1) of rule 7 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. 218/77-CE dated the 15th July, 1977, the Central Government hereby exempts pigments, colours, paints, enamels, varnishes, blocks and cellulose lacquers manufactured with the aid of power (hereinafter in this notification referred to as “the said goods” and falling under Item No. 14 of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) upto an aggregate value not exceeding rupees one crore cleared for home consumption on or after the 1st day of April in any financial year by or on behalf of a manufacturer from one or more factories, from so much of duty of excise leviable thereon as is equivalent to 2% ad-valorem.”
7. Notification No. 219/77 dated 15-7-77 is an exemption relatable to mode and manner of packing of goods as specified therein as would be seen from the Notification reproduced below –
“In exercise of the powers conferred by Sub-rule (1) of rule B of the Central Excise Rules, 1944 the Central Government hereby exempts oil bound distemper, plastic emulsion paints, stiff paints, ready-mixed paints and enamels, varnishes, bituminous and coal-tar blocks and cellulose lacquers falling under Item No. 14 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and cleared in packing, each containing less than five kilograms in respect of oil bound distemper and stiff paints, four litres in respect of plastic emulsion paints and ready-mixed paints and enamels, three litres in respect of varnish and bituminous and coaltar blocks and one litre or one kilogram in respect of cellulose lacquers depending upon whether they are sold on the basis of value or weight, as the case may be, from so much of the duty of excise leviable thereon as is in excess of the duty proportionately leviable thereon on the value of said products contained in a five kilogram or four litres or three litres or one litre or one kilogram packing, as the case may be.”
8. Notification No. 220/77 dated 15-7-77, material portion of which is reproduced below, would shows that the exemption under the notification is available to all manufacturers in respect of the goods specified in the table irrespective of the manufacturer being in the small scale sector or large scale sector –
“In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excises Rules, 1944, the Central Government hereby exempts the goods mentioned in the Table below and falling under Item No. 14 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) from so much of the duty of excise leviable thereon as in excess of ten per cent ad valorem.
Table * * * * * * 9. Notification No. 86/83 dated 1-3-83 is an exemption in respect of special duty of excise leviable in respect of goods specified in the notification. The material portion of the notification reads as under -
“In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, read with sub-clause (4) of clause 55 of the Finance Bill, 1983, which clause has, by virtue of the declaration made in the said Bill under the provisional Collection of Taxes Act, 1981 (16 of 1981) the force of law, the Central Govt. hereby exempts goods, falling under Item Nos. 1, IA…of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) hereinafter referred to as the Central Excises Act, from so much of the special duty of excise leviable thereon under sub-clause (1) of the said clause as is in excess of five per cent of the amount of duty of excise chargeable on such goods under time being in force issued by the Central Govt. in relation to the duty of excise so chargeable.”
…The Explanation to the Notification is reproduced below –
“For the purpose of this notification providing for any exemption for giving credit with respect to, or reduction of duty of excise under the Central Excise Act, on such goods equal to, any duty of excise under the Central Excises Act or the additional duty under Section 3 of the Customs Tariff Act, 1975 (1 of 1975) already paid on raw material or component parts used in the production or manufacturer of such goods shall not be taken into account for determining the amount of duty of excise chargeable on such goods under the Central Excises Act.”
10. We find nothing in these notifications (except for the notification No. 83/83 which is not material for the present appeal) that availing of exemption under one notification would disentitle a manufacturer from availing of exemption under other notification should the same be applicable to the goods in question. We are fortified in our view by a decision of the Tribunal on which Sh. Sastry has placed reliance – Collector of Central Excise, Madras v. Bharat Heavy Electrical Ltd., Madras 1987 (31) ELT 534 (Tri.) . In this decision, it was held that there is no bar to availing of more than one benefit unless it is barred categorically. We find nothing in the notification pointing or suggesting that the notification is inherently such that availing of benefit under one would disentitle the parties to benefit of exemption under the other notification – the same being applicable to the goods in question.
11. As a result of the aforesaid discussion, we modify the impugned order and hold that the appellants would be eligible to benefit of exemption which was denied to them in respect of the goods as setout in para one above. The appeal is thus allowed.