ORDER
S.G. Sankaran, Senior Vice-President
1. The dispute in the present “case concerns miniature tyres manufactured and distributed as free gifts by the appellants. On a representation from the appellants, the Central Board of Excise and Customs (hereinafter the “Board” for short), in exercise of its powers under Sub-rule (2) of Rule 8 of the Central Excise Rules, 1944 (hereinafter the “rules”) exempted such tyres from the whole of the excise duty leviable thereon. The Order F.No. 7/20/64-Ex.II dated 27.10.1984, read as follows :-
“I am directed to refer to your letter No. 031/PTJ, dated the 3rd October, 1964 on the above subject and to say that in pursuance of Sub-rule (2) of Rule 8 of the Central Excise Rules, 19W, the Central Board of Excise and Customs grants exemption from whole of the Central Excise duty leviable on miniature tyres proposed to be manufactured and distributed as free gifts.”
(It may be noted that the Board’s order did not say under which item of the Central Excise Tariff Schedule – CET – miniature tyres fell). It appears that the Assistant Collector, Goa, considered that the Board’s order applied to miniature tyres falling under Item No. 16, CET otherwise no purpose would have been served by the Board’s order. According to the Assistant Collector, the subject goods which were not pneumatic tyres but were used as ash trays or show pieces, more appropriately fell under Item No. 68 CET. On this basis, he passed an order on 13.2.1980 rejecting the appellant’s claim for exemption from duty on the miniature tyres manufactured by them. He also passed another order on 3.6.1980 rejecting the claim filed by the appellants for refund of the duty paid on miniature tyres during the period 3.11.1979 to 30.4.1980. In appeal, both these orders were upheld by the Appellate Collector of Central Excise by his order dated 5.4.1982 which is challenged in the present proceedings before us.
2. We have heard Shri S. Ignatius, Manager, Indirect Taxes of the appellant company and Shri K.C. Sachars J.D.R. for the respondent.
3. Shri Ignatius referred to, and relied on, this Tribunal’s decision on a similar issue in another appeal of the same appellants reported in 1987 (29) ELT 732. By a majority of the Bench, it was held therein that miniature tyres manufactured by the appellants and distributed at free gifts (the two requirements in the Board’s order) were entitled to exemption from duty irrespective of whether they fell under Item 16 or 68 CET because the Board’s order did not tie up the exemption with any particular tariff entry).
4. The Bench enquired of Shri Ignatius whether the Board could grant an exemption of a permanent nature under Rule 8(2) when its powers under that sub-rule would appear to relate to specific consignments, Shri Ignatius submitted that the Board’s order was specifically on miniature tyres and the precedent decision of this Tribunal should be applied to the instant case too. However, Shri Sachar, D.R. submitted that an exemption order under Rule 8(2) could only be ad hoc.
5. At this stage, Shri Ignatius sought leave of the Bench to withdraw the appeal. Leave was declined by a majority of the Bench. This was in the light of this Tribunal’s decision in Mahandra Mills Ltd. v. CCE, Baroda – 1987 (31) ELT 295, holding inter-alia that right of withdrawal of appeal is not available to parties and further because it appeared that the appellants were trying (at a belated stage at the end of the hearing) to avoid what they perhaps felt was likely to be an adverse decision. The request did not appear, therefore, to be bona fide reasons.
6. In our view, the powers of the Board under Sub-rule (2) of Rule 8 are limited in nature. Sub-rule (2) reads thus :
“The Central Board of Excise & Customs may by special order in each case, exempt from the payment of duty under circumstances of an exceptional nature, any excisable goods.”
It is clear that the exemption can be only with reference to each case i.e. a specific consignment or lot or for a specific period. An order under Rule 8(2) cannot be of a permanent nature like a notification issued by the Central Government under Rule 8(1). The present order under Rule 8(2) was issued as far back as on 26.10.1964,, It cannot, by any means, be said to be operative as late as in 1979 and 1980 (the period of the present dispute is 3.11.1979 to 30.4.1980). Quite apart from this consideration, the goods fell under Item No. 68 CET with effect from 1.3.197.5 (Shri Ignatius said he was not making any submission on the point of confiscation of the goods) for the cogent reasons set out in the opinion recorded by the learned Judicial Member in his order in the precedent decision. It should be noted that the majority did not go into the question of classification.
7. In the result, we hold that the Board’s order dated 27.10.1964 did not apply to the subject goods during the material period. We uphold the impugned order and dismiss the appeal.
V.T. Raghavachari, Member (J)
8. I am writing this separate order since, when a request was made for withdrawal of the appeal (as noted in paragraph 5 of the order prepared by the Sr. V ice-President), I was of the opinion that the same should be permitted but, as noted in the order of the Sr. V ice-President, the majority of the Members were of the contrary view and, therefore, permission for withdrawal of the appeal was declined by the Bench.
9. In his submissions Shri Ignatius mainly relied on the decision of this Tribunal reported in 1987 (29) ELT 732 which dealt with the same manufactured by the same appellants. The only difference between that case and the present case is with reference to the period for which duty was to be paid on the said product. In the circumstances Shri Ignatius, quite rightly in my opinion, relied on the said decision and therefore requested that this Bench should, following the said decision, allow the appeal. Hence, at that stage, Shri Ignatius was perfectly justified in thinking that this Bench would, in the normal circumstances, follow the said decision and allow the appeal.
10. But during the hearing it was the Bench which raised the query whether the letter dated 27.10.1964 relied on by the appellants (and on the basis of winch the earlier decision had been rendered) would in fact be a proper ground for granting relief either in the earlier case, or in the present appeal, since, on a proper reading of the relevant legal provisions, the Central Board would have no jurisdiction to grant any such general exemption from payment of duty in respect of future goods of a particular category. It was, therefore, enquired whether the said letter ought not to be ignored and, therefore, go into the question of the excisability of the product and the item under which it would fall for purpose of levy of duty.
11. It should be remembered that the contention for the appellants has been that except in the case of the Goa Central Excise Collectorate duty was not being demanded on this product by any of the other Collectorates, the reason therefor being the exemption granted under the letter dated 27.10.1964. That is to say, the appellants were being permitted by other Collectorates except the Goa Collectorate to remove this product without payment of duty. In respect of Goa Collectorate the appellants have obtained the order of this Tribunal cited supra upholding their contention for eligibility for exemption. It is in these circumstances that, when posed with the question whether the decision of the Tribunal earlier would not be wrong (on the basis that the letter dated 27.10.1964 could not grant exemption in respect of future removals), Shri Ignatius made the request for withdrawal of the appeal, evidently because he felt that any adverse decision in this appeal may initiate action for demand of duty from other Collectorates also.
12. The decision in 1987 (31) ELT 295 does not lay down that no appellant can in any circumstance be permitted to withdraw his appeal. As regards the observations therein that the Tribunal has powers, in modifying the order appealed against, to so modify it as to enhance the liability of the appellant, I have my own serious doubts. The normal rule is that no person shall be placed in a worse position than he is because he has preferred an appeal. Any exception to this rule will have to be supported by the provisions in the statute (providing for the appeal) containing a suitable provision for enhancement of the liability. Therefore, to read from Section 35-C of the Central Excises and Salt Act a provision to this effect does not appear to be very proper.
13. It is in view of the above considerations that I felt, when the request for withdrawal was made, that this would be a proper case where permission for withdrawal may be given. But since the other two members of the Bench were of the contrary view the permission was declined by the Bench and further hearing was continued.
14. On the merits of the issue I agree with the Sr. Vice-President that the provisions of Rule 8 of the Central Excise Rules could not be construed as conferring on the Central Board a power to grant exemption indefinitely on all future removals but that such a power should be held to be restricted to a particular instance or instances. I, therefore, agree that the letter dated 27.10.1964 relied on by the appellants would not entitle the appellants to claim exemption from payment of duty in the instances in issue. I, therefore, concur with the order of dismissal of the appeal proposed by the Sr. Vice-President.
K. Prakash Anand, Member (T)
15. I wholly concur in the order recorded by my learned brother Shri Sankaran. In view, however, of the comments made by my learned brother Shri Raghavachari, it has become necessary for me to make a small observation.
16. I do not think that brother Sankaran and I felt that in the light of the decision of Mahandra Mills Ltd. v. Collector of Central Excise, Baroda – 1987 (31) ELT 295, no appellant can, in any circumstances, be permitted to withdraw his appeal. Here was a case where the hearing of the matter which had proceeded for quite some time, had nearly concluded and, as it happened, towards the end, it became apparent that the appellant’s appeal was likely to” be dismissed by the Bench. On quick calculation of his interest, Shri Ignatius thereupon sought permission to withdraw the appeal. It is, in these circumstances that we decided that the request could not be granted. If every appellant were to be considered to have a right to withdraw his appeal after he has argued that length, and in the course of arguments, it becomes apparent to him that the consequences of the appeal are going to be adverse to him, this would certainly defeat the ends of justice.
17. Appeal dismissed.
Dated : 26.10.1987 (K. Prakash Anand)
Member
In view of the majority opinion, the impugned order is upheld and the appeal is dismissed.