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Customs, Excise and Gold Tribunal – Mumbai
Kirloskar Ltd. vs Commissioner Of C. Ex. And Cus. on 14 October, 2000
Equivalent citations: 2001 (127) ELT 805 Tri Mumbai


Gowri Shankar, Member (T)

1. The question for consideration in this appeal is whether the benefit of Notification 213/86 would be available to goods which are captively consumed in the manufacture of goods supplied to export oriented unit without payment of duty under a claim for exemption under Notification 123/81. At the relevant time exemption in the notification did not include goods sent to 100% export oriented unit. The notification was subsequently amended with effect from 1-3-1992 permitting the exemption even in cases where the finished goods were cleared without payment of duty to 100% export oriented units (EOU).

2. The larger bench of the Tribunal in its decision in L & T Limited v. CCE – 2000 (119) E.L.T. 51 had occasion to consider a similar situation with regard to rule 57C. This rule which prohibits taking credit where the final product is exempted or chargeable to nil rate of duty was amended again on 1-3-1992, to exclude the clearances to 100% EOU. The Tribunal has held that this amendment was prospective and not retrospective in effect. For the same reasons the amendment to Notification 123/81 has held to be prospective.

3. The representative of the appellant raises another point. Neither the show cause notice nor the order of the Assistant Collector concluding the proceedings on the notice or the order of the Collector (Appeals) setting aside that order quantified the amount of duty. He relies upon the judgment of the Bombay High Court in JBA Printing Inks Ltd. v. UOI -1980 (6) E.L.T. 121. The facts in the present case are distinguishable. The appellant in reply to letters by the department had not disclosed the details of rate and particulars of goods captively consumed. In that situation, where the facts within the special knowledge of the assessee were not brought to the notice of the department there was no possibility of specifying the duty. The Assistant Collector dropped the proceedings. The order of the Collector (Appeals) does not support the appellant’s claim that relevant details were produced before him and at the hearing before the Assistant Collector.

4. We are unable to hold that the demand for duty is illegal. We however, agree that the correct amount should be indicated to the appellant. Accordingly we hold that the product was liable to duty, notice valid, allow the appeal and set aside the impugned order. The appellant shall produce before the Commissioner (Appeals) the figures in support of its contention that duty payable is less than what has been demanded. The Commissioner shall after considering the material produced and hearing the appellant, pass order quantifying the demand.

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