ORDER
K. Sankararaman, Member (T)
1. M/s. Godfrey Phillips (I) Limited, the appellants had claimed before the jurisdictional Assistant Collector refund of Rs. 4,60,568.15 of special excise duty stated to have been paid in excess while clearing the goods, cigarettes, manufactured by them. Their case was that special excise duty was payable as a percentage of the basic excise duty payable by them after taking into account the exemption Notifications 30/79, dated 1-3-1979 as well as Notification 201/79, dated 4-6-1979. The Assistant Collector rejected the refund claims holding that special excise duty had been correctly levied after taking into account the effect of Notification 30/79. Notification 201/79 was not to be applied while determining the quantum of basic excise duty on which special excise duty was to be based. The Assistant Collector referred to the amendment in Section 4(4)(d)(ii) brought about under Finance Act, 1982 and held that as per the said amendment also, the exemption Notification 201/79 was not to be considered while fixing the basic excise duty for determining the special excise duty (sic) leviable. These decisions were upheld by the Collector of Central Excise (Appeals) and thereby the present appeals.
2. Heard Shri R.D. Jaimal, Manager of the appellant company. He referred to Tribunal decision 1981 (21) E.L.T. 730 in the case of Tata Oil Mills Co. Limited v. Collector of Central Excise and the Delhi High Court judgment in Good Year India Limited v. Union of India – 1990 (49) E.L.T. 39.
3. The arguments were rebutted by Shri M.K. Jain, learned Senior Departmental Representative who appeared on behalf of the respondent Collector.
4. We have considered the submissions of both the sides. As pointed out by the learned representative of the appellant company, the Tribunal decision in the Tata Oil Mills case and the Delhi High Court judgment in the Good Year India Limited case are clearly to the effect that special excise duty is calculable (sic) after applying all exemption Notifications including Notification 201/79. The Tribunal decision relates to proceedings drawn up under a show cause notice dated 22-8-1980 while in the latter the directive of the Central Board of Excise & Customs indicating that where an exemption of set off is given under a notification, the special duty of excise is to be calculated first, without applying the exemption notification which is to be applied thereafter. It was held that the clarification given in the directive was not correct and that the exemption by set off was first to be given effect and special excise duty was to be calculated thereafter.
5. The Assistant Collector had referred to the amendment in Section 4(4)(d)(ii) of the Central Excises & Salt Act, 1944 regarding the quantum of the Central Excise duty which is to be arrived at after taking into account the applicable exemption notifications except exemption for giving credit with respect to duty equal to any duty of excise already paid on the raw material or component parts used in the production or manufacture of such goods. In this connection, we find that in Appeal No. 2782/86-D the appellants have relied upon the Tribunal decision in Indian Plywood Manufacturing Company Limited v. Collector of Central Excise, Bangalore reported in 1983 (13) E.L.T. 1243 wherein it was held that the amendment of Section 4(4)(d)(ii) (referred to above) took effect from 1-3-1983 and would have no effect for past period. In the present appeal, the assessments relate to the period [from] June 1980 to February 1982 on the basis of the Tribunal decision in the Indian Plywood case. In addition; we find that the Explanation in 4(4)(d)(ii) with regard to excise duty laying down that Notifications providing for exemptions with reference to the duty paid on the raw material or components used in the manufacture of the excisable goods are to be excluded is only for the purpose of that particular sub-clause. This is clear from the plain language of the said provision. The said Explanation starts with the expression “For the purposes of this sub-clause”. Hence the exclusion of such exemption notifications is not for other purposes viz. calculation of special excise duty. The said duty is authorised by the relevant section of the Finance Act which providfes] for the levy of special excise duty with reference to the amount of excise duty chargeable under the Central Excises & Salt Act read with any notification for the time being in force in relation to the duty chargeable. Since Notification 201/79 is one such exemption Notification in relation to the duty chargeable, the same is to be taken into account while arriving at the duty of excise based on which special excise duty is to be calculated. As already stated, such a finding is there in the Tribunal decision and Delhi High Court judgment which have been referred to earlier.
6. The appeal is allowed accordingly.